Web travel bookings cut out middlemen

It is really no surprise that Web travel bookings cut out middlemen. After all the web is all about reducing friction and making markets more transparent. The online travel agencies were the first to offer web based purchasing options for travel services, way before suppliers even had websites. This was followed by what can now be considered an unusual period of after the collapse of the dot.com bubble and 9/11 when travel declined. This made suppliers even more reliant on the online travel agency intermediaries to produce large amounts of business for them. This is when the merchant model was predominant. In the meantime the pendulum has shifted back to more supplier power.

This shift, combined with technologies that enable suppliers to sell complementary services to their own, i.e. airlines selling hotel rooms, hotels selling airline tickets and both selling car rentals, lead to the market share decline by intermediaries selling those same services.

The way forward, and this runs like a thread throughout many of these postings, requires intermediaries to offer added value and a move away from selling commodity products to bundled offerings at competitive prices. Only a true one-stop shopping experience for the entire vacation product will keep them profitably in the game.