These Are the 5 Things That Killed Travelocity

Forgive Travelocity's Roaming Gnome if it screws up its lines one day because it can hardly recognize the once-proud brand that it still represents. Founded in 1996 and for several years the king of the hill among online travel agencies, Travelocity saw competitors -- first Expedia and Hotels.com around 2001 and 2002, and then Priceline and Booking.com a few years later -- pass it by as it utterly failed to reinvigorate itself. Lately it has been subject to parent and IPO-bound Sabre's serial asset sales, and has become a fraction of its former whole-number self. To get a feeling for how far Travelocity has fallen, consider that competitors moaned in the early 2000s that Travelocity wielded a near-monopolistic grip on the all-important Internet powerhouses of the day -- the AOL, Yahoo, and Microsoft travel portals. And that when Continental, Delta, Northwest, United and eventually American airlines founded what was to become Orbitz in 2000, the secret codeword for the startup was T2 -- Travelocity Terminator. Well, Travelocity has essentially been terminated all these years later, although a pulse of the brand, along with a small marketing arm, still beats away, largely in the service of Expedia as Sabre cut its losses and focuses on larger opportunities. Here are five sometimes-overlapping factors behind Travelocity's demise (and below them you can also read further analysis from several travel industry observers, including Expedia founder Rich Barton and others): 1. Distribution System Ownership No online travel agencies, whether Travelocity, owned by Sabre; Orbitz Worldwide, until recently controlled by the private equity owners of Travelport; or Europe's Opodo, formerly owned by Amadeus, have thrived with a global distribution system company as a parent. In Travelocity's case, as the progeny of historically airline-centric Sabre, the Southlake, Texas-based online travel agency failed to grasp that the opportunities dangled before it by the global hotel business were existential priorities, and investment decisions often lay elsewhere. Especially in the early days, Sabre had problems balancing its supposed nurturing of an online travel agency because its main business was distributing travel content to rival travel agencies. 2. Hotels, Expedia and Booking.com In researching this article, several people pointed out that Travelocity repeatedly