CHICAGO (Reuters) - Fees charged by the four U.S. online travel agencies to book most flights could be a thing of the past as the companies, hungry for market share, try to make their offerings more appealing to the traveling public.
Orbitz Worldwide on Monday said it has permanently removed airline ticket booking fees on domestic and international flights. Travelocity said on Monday it would continue to waive flight booking fees. Expedia Inc said the same thing last week.
The fee waivers at those companies began this year as promotions. Priceline.com has not charged fees for published price airline bookings since 2007.
While the new fee waivers could stimulate travel bookings, they also threaten to erode revenue for the companies, which have been suffering as the recession takes its toll on spending for business and leisure trips.
“To be honest, when they say permanent, I don’t know how truthful that really is,” said Morningstar analyst Warren Miller.
“I can’t see them not coming back at some point. That’s how they make money,” he said.
Miller noted that online travel agencies typically make about 15 percent of their total bookings value in fees.
Of the three publicly traded online travel agencies — Expedia, Priceline and Orbitz — only Priceline saw bookings growth in the first quarter.
The companies have been hit hard by economic woes and also by airline capacity cuts that reduce the number of tickets the travel agencies can sell.
Reporting by Kyle Peterson, editing by Dave Zimmerman