All the attention has been on the Continental-United merger, but that’s not the only M&A action in the travel space. To wit:
- Hertz made an offer to buy Dollar/Thrifty for $41/share. Avis subsequently signaled interest in making a higher bid. Bottom line: The car rental market is about to shrink.
- Google is reportedly in talks to buy ITA Software, which provides much of the functionality for sites like Orbitz, Kayak, TripAdvisor Flights, and others. You can’t just google a ticket today, but you may do so soon.
The battle for Dollar/Thrifty between Hertz and Avis is largely about consolidation and elimination of the competition (much like the “Continited” merger). At the same time, buying Dollar/Thrifty would give Hertz or Avis a larger presence in the comparatively “downmarket” leisure travel segment.
The speculated deal for ITA Software is perhaps more interesting. What will Google do if it gains the technology and software engineering human resources to run better fare searches? Will they offer a search-of-searches, pushing traffic to airlines and online travel agencies, but putting Kayak and their metasearch ilk out of business? Will Google challenge Expedia, Orbitz, Travelocity, et al. themselves and build a Google travel agency? Will Google continue to sell the powerful ITA engine (which ITA lets anyone test drive on their beta site — login as guest) or will they let contracts expire and keep the technology for itself? Plenty of theories, but no answers.
So in the past week, the competitive landscapes for flying, driving, and booking travel have all potentially changed, with minimal visible benefits to the consumer. After all, less competition breeds higher prices.
All we’re missing is a hotel deal and a cruise line merger, and we’ll be all set. (The week is young.)