Expedia and Orbitz fee cuts could become permanent

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Online travel agencies, based in the US, and looking to improve business performance in the current downturn, may either extend their booking fee cuts and waivers or make the changes permanent.

Companies such as Orbitz and Expedia reduced or temporarily eliminated some of booking fees recently, aiming to boost demand over the peak summer season.

The moves made by these two companies lagged behind the waiver of airline booking fees by Priceline.com by almost two years, and were only intended to be temporary. Industry experts and leaders are now saying that it is possible the changes may become permanent as the competition for customers heats up.

“The combination of measures that we’ve taken … certainly give us the flexibility to sustain the actions if we choose to do so,” said Orbitz Chief Executive Barney Harford in comments to Reuters last week, referring to measures implemented to boost revenues and cut costs.

Expedia, Orbitz and Travelocity all waived fees on airline bookings in promotions that extend through May. Hotel booking fees were also cut by Expedia and Orbitz.

Priceline.com eliminated published-price airline booking fees in 2007, and in 2008 reduced its published-price hotel booking fees. For the online agency’s name-your-own-price auction fees remained unchanged.

“Our competition has cut fees on a promotional basis this spring, and all are matching, resulting in a material hit to our competitors’ profitability,” said Priceline.com CEO Jeffery Boyd on a conference call with analysts and the media early this week.

Thanks to www.reuters.com for the above quotes, for more information on this article please visit their website.

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