Orbitz/Expedia Deal Could Be Bad News For Hospitality Industry, Hopes For Its Agency Model
The Orbitz buyout by Expedia means there is one less player in the industry that acts as a storefront for hotels. This industry is made up of companies like Expedia called Online Travel Agencies, or OTAs. There are multiple models that OTAs can use when negotiating with hotels. My thesis is that this merger could give more power to Expedia and cement the model they use, the "Merchant Model" for the majority of the industry. This could mean shrinking margins for hotel giants such as Marriott International, Hilton Hotels and Starwood.