Digital Booking Sites

Orbitz Gets Friendly With TripAdvisor After Kayak Relationship Ends

@denschaal

Mar 20, 2014 9:00 am

Skift Take

Alliances are shifting in online travel as Orbitz cozies up to TripAdvisor after several years of bad blood between Kayak and Orbitz. TripAdvisor may have found a partner in Orbitz for help in booking hotels directly within TripAdvisor’s mobile apps.

— Dennis Schaal

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TripAdvisor

TripAdvisor says "Orbitz came on strong" in the fourth quarter as a participant in Tripadvisor's hotel metasearch feature. TripAdvisor


Kayak broke the heart of Orbitz Worldwide, and now TripAdvisor has stepped up as the Orbitz rebound guy.

And all of this is taking place as Orbitz saw its stock price fall more than 9% to $8.13 per share on March 19 as a Goldman Sachs analyst downgraded the stock to “sell,” from “neutral,” with the end of Orbitz’s exclusive 5-year relationship with Kayak cited as one of several factors behind the revision.

Orbitz and Kayak had an exclusive promotional relationship for five years, and Orbitz was generating meaningful air ticket revenue from the relationship until the duo had a falling out, and ended the relationship December 31.

Enter TripAdvisor, which has provided Orbitz with a shoulder to cry on.

TripAdvisor CFO Julie Bradley spoke at an investor conference this month, saying Orbitz hadn’t participated in TripAdvisor in awhile, but in the fourth quarter the Chicago-based online travel agency started taking part in TripAdvisor’s hotel metasearch.

“Orbitz has come on strong,” Bradley said at a Morgan Stanley investor conference on March 3. “They are highly motivated in our auction in putting price pressure across all to capture those leads.”

To be sure, Orbitz doesn’t have an exclusive relationship with TripAdvisor as it did with Kayak, and plenty of other online travel agencies, including Booking.com, Expedia and Travelocity, are participating in TripAdvisor hotel metasearch, as well.

And TripAdvisor hotel metasearch doesn’t help Orbitz recoup the airline ticket revenue it lost when the Kayak relationship died.

But, Orbitz clearly has a new friend in TripAdvisor, and there are strong signals that ties will get even closer.

TripAdvisor is putting a lot of resources into launching an “assisted booking” option in 2014 for its mobile products where travelers would be able to book a hotel within the app without having to navigate to a third-party site for booking.

TripAdvisor believes that such bookings within its apps would increase monetization and turning lookers into bookers who wouldn’t drop off when handed off to another site for the booking.

But, TripAdvisor needs a major online travel agency partner to handle those Book Tripadvisor transactions in the background, and has faced a lot of opposition from online travel agencies who don’t want to make TripAdvisor even stronger at the expense of their own brands.

Enter Orbitz.

A financial analyst at the Morgan Stanley conference asked Bradley the following question: “And then just in terms of direct bookings on your mobile app, if you can’t convince Priceline or Expedia to join, but someone like Orbitz would, would you be willing to launch it without the selection you mentioned, so having three OTAs and just launch with one of them?

Bradley replied: “So, on instant book, the question is would we launch with a smaller subset of partners? That’s definitely a possibility. We haven’t ruled that out.”

“We do look to have the best user experience,” Bradley added. “So we are looking for commerce coverage. However, we firmly believe that instant book on smartphone is a better user experience, reducing the friction, so we are looking to get that out as quickly as possible.”

Neither Orbitz nor TripAdvisor has many any public commitments on working together to enable TripAdvisor to take hotel bookings within its mobile apps.

But, many long-term relationships have started out slowly and secretly before the coming out party.

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