Orbitz President: Expedia-Travelocity Deal Removes Clutter in the Marketplace
Is Orbitz’s hotel supply really differentiated enough from Expedia’s and Travelocity’s that consumers will notice the difference when Travelocity fades away as a competitor in 2014? That’s doubtful, although Orbitz may have some tricks up its sleeve.
And although Orbitz still uses Kayak a lot as a marketing vehicle despite a frayed relationship, Orton says Orbitz is placing a lot of bets and would “aggressively” use a new metasearch partner if it allows Orbitz to show its differentiation — and isn’t all about price.
Orton visited Skift’s New York City office today, and discussed these and other issues.
Skift: There’s been lots of big news with Expedia and Travelocity. How does that deal change things for Orbitz and Cheaptickets in the U.S.?
Orton: When we look at it in some ways it is sad to see a competitor that we’ve been competing with for years effectively throw in the towel. I think for us we look at it and say gosh, we’ve achieved a lot. We’ve gotten to a unique market position. We think it actually stands up even better now relative to Travelocity when they are going to be showing someone else’s inventory. It’s just a different way to buy the same inventory. We’ve got our own. If anything, it puts us in a more unique position.
Skift: Does it make it harder to compete against Expedia or do you see it as an opportunity for Orbitz?
Orton: You know I think it is an opportunity. We want to highlight the fact that we have unique inventory. We have properties that nobody else has. We’ve got properties with unique values that nobody else has. Actually, I think in a way, it kicks some of the clutter out of the marketplace. It’s going to be pretty clear there’s only a few sources of supply out there. We have one of them.
Skift: You mentioned that the majority of Orbitz bookers still go to Orbitz for flights. Why is it so hard to make the transition to hotels and how is that going?
Orton: I would say the transition is going great. One of the statistics we have is our standalone hotel room nights going up 40% percent in Q2, which is the last number we talked about. So I’d say the transition is going very well. We just want to throw more gasoline on the fire. I can tell you we are seeing a really nice acceleration in our share on the hotel side. For us we view air as a critical part of our business. For us it’s a huge luxury on our side. We know all these consumers — where they want to go, when they want to go. All we’ve got to do is help them see all the great values we have on the hotel side.
Skift: All of the other online travel agencies have a favorite metasearch company these days. Expedia has Trivago, Priceline has Kayak. You guys used to be best buddies with Kayak. How does this all fit in for Orbitz these days?
Orton: To be candid with you, we are still sorting that all out. It is tricky. When you look at the relationships that are upstream and downstream from the meta players, it is hard to figure out where do we want to play, where don’t we want to play. So I think what I’d say is that we are being very thoughtful about our relationships that we are going to have going forward, and we are going to figure out where are they going to actually reinforce our consumer value proposition.
We want partners that will help people understand what is different about Orbitz. It is not all just about price. I think when you look at a lot of the meta players, they reduce it to price, price, price. There are all these other dimensions. When we find partners who are willing to work with us on these sorts of things, we are going to work really aggressively with them. When they reduce it to a single dimension, it becomes a lot less interesting for us.
Skift: Where are the main places that Orbitz plays in metasearch these days? Is it still Kayak or are there others?
Orton: I don’t know if I can give you the specific order, but I can tell you that we still have a pretty significant relationship with Kayak. We work with TripAdvisor. We work a little bit with smaller players, Room77, those kinds of places. So I think we are placing a lot of bets. I think at this point we view it as a much more commoditzed space. We want to see who is really going to break through and allow us to highlight the value proposition that we have.
Skift: Are you seeing the same kinds of difficulties that Expedia has been seeing in that TripAdvisor metasearch has been slow to take off as far as working for you?
Orton: Let’s put it this way: They (Expedia) have a very different historic relationship with TripAdvisor than we did. We weren’t encumbered by the historical relationship. So I think we have navigated it a little differently.