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PhoCusWright FYI

Expedia Steps it Up

Updated March 17, 2009

Carroll Rheem, PhoCusWright's director, research, comments from PhoCusWright@ITB in Berlin, Germany on the March 11 announcement of Expedia's "free nights and no fee flights" promotion. To view this video interview, click on the image below or view it on PhoCusWright's YouTube channel.

On Wednesday, March 11, Expedia announced their "Free Nights and No Fee Flights" promotion, offering travelers their last night free on stays of three, four or five nights at over 700 participating hotels worldwide. As part of this promotion, Expedia is also waiving booking fees on all flights booked on or before May 31, 2009. In response to this news, PhoCusWright's Carroll Rheem relates the news to past growth patterns of online travel agencies in travel industry down-cycles and discusses what the future holds for this segment.

PhoCusWright analysts continually monitor the travel industry for news and trends that impact how travel suppliers and intermediaries connect with consumers.

March 17, 2009 Update:

Travelocity has already countered Expedia's "free nights and no fee flights" with their "fee-free, worry free travel" promo. In addition to waiving airline fees, they're introducing Travelocity PriceGuardian on a promotional basis. PriceGuardian refunds the difference if another person books the same package for less on Travelocity. It's essentially like Orbitz's Price Assurance program for airline tickets, but for packages, which would likely make the odds for an actual refund only slightly better than winning the lottery. Will consumers fall for it? Is Orbitz going to give in and waive its fees (can it afford not to)?

Stay tuned for the latest from our analysts and join the debate on our Facebook discussion board or on YouTube as we track the furious pace of change in today’s travel marketplace.