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Mercator LabsThe Evolution of Travel Technology | Mercator Labs

The Evolution of Travel Technology

On Friday, travel company Expedia agreed to acquire Travelocity for $280 million, adding another popular travel site under the Expedia brand portfolio, which includes Hotwire and Hotels.com. Before the acquisition, Expedia was already operating as the backend platform for Travelocity’s site, as well as managing the customer service program, leaving the importance of this acquisition not with the companies themselves, but the larger trend of travel technology consolidation.

Over the past decade or so there have been dozens of major travel mergers and acquisitions as legacy tech players look to gain a foothold in new markets or to help win over trending consumer habits (on-demand mobile hotel booking, for example). Here’s a look at some of the major travel technology acquisition in the past 15 years, some of them by both Expedia and Travelocity:

GetThere acquired by Sabre Holdings for $757 million in 2000

Travelocity acquired by Sabre Holding for $420 million in 2002

Hotwire acquired by Expedia (InterActiveCorp) for $685 million in 2003

TripAdvisor acquired by Expedia (later spun off in IPO) for $212 million in 2004

Orbitz Inc. acquired by Cedant Corp for $1.1 billion in 2004

ActiveHotels acquired by Priceline for $161 million in 2004

Venere acquired by Expedia for $475 million in 2008

Hostelworld.com acquired by Hellman & Friedman for $450 million in 2009

Opodo acquired by ODIGEO for $614 million in 2011

Kayak acquired by Priceline for $1.8 billion in 2012

Trivago acquired by Expedia for $632 million in 2012

Travelocity acquired by Expedia for $280 million in 2015

A more complex ecosystem:

Up until a few years ago, a majority of the movers and shakers were looking to gain market share and slowly expand on new functionality but the pace of evolution has recently sped up with the likes of Hipmunk, AirBnB, HomeAway and HotelTonight. These companies are tapping into new user behavior such as mobile-first on-demand hotel booking and house rental (supply & demand side). The legacy travel companies that were pioneers in the online booking and travel space and attempting to play catch up or include themselves more so in the changing ecosystem with better quality applications that were better and relate more to today’s travelers.

Before we get lost in a sea of travel companies defining and disrupting the travel industry, it’s important to take a step back and break down the categories that comprise the space and how they’re interconnected: Booking travel (flights, hotels, activities) and exploration (local tourism) is one way to initially compartmentalize the travel industry at a high level, creating a consumer psyche of “pre-planning” and “real-time planning” on trips. Each component of a trip can be thought of in a linear way from research to execution of the trip to posting reviews after the fact but that doesn’t mean a travel technology company needs to control the whole experience.

The acquisition of Travelocity by Expedia is a continued sign of consolidated market share but that isn’t the main headline in the evolution of travel technology. It’s adapting to the new consumer travel habits and other younger companies who are native to those niches have a strong foothold that are only getting stronger.

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