Orbitz Enters Business Travel Fray

Not to be outdone by rival travel site Expedia, the airline-backed site
Orbitz rolled out Orbitz for Business Monday, offering
online corporate booking and tracking tool that the company said can save
companies of all sizes “up to 75 percent” on transaction costs.

The move follows Bellevue, Wash.-based Expedia’s launch into
the corporate travel arena
last week with its acquisition of
Seattle-based business travel firm Metropolitan Travel.

Orbitz, which has an IPO pending (pricing is expected late this month), said its corporate service offers
corporate travelers access to Orbitz’ widest selection of low fares and a
simpler booking process in which both corporate negotiated fares and rates
are combined in one display with Orbitz’ other listings.

And despite government
about Web fares and unfair competition that have put Orbitz on
the defensive, the company minced no words about travel agency fees.

“Orbitz for Business was created to offer corporate travelers the same
ease-of-use our leisure site is known for, while at the same time addressing
the need for companies to reduce travel management costs caused by rising
agency transaction fees,” Rick Weber, vice president of business services at
Orbitz, said in the news release announcing the launch.

In fact, the site itself boasts the slogan: “Suddenly, the rest of the travel
industry looks like it’s in a holding pattern.”

The travel agency industry has complained strongly about airline ticket sales
practices, and American Society of Travel Agents
Executive Vice President and COO William A. Maloney told a federal panel last month that “airline activity threatens consumer access to price and
schedule information, preventing optimal choice-making in the purchase of air

Orbitz has, however, been moving to let travel
agents have direct access
to its Web-based search engine and its
inventory of low-fare ticket prices.

Orbitz said its business service will allow corporations and their preferred
suppliers to integrate negotiated rates into the Orbitz flight and fare
display, so that customers from participating corporations have the option to
view and select among corporate, published and
web fares for flights, hotels and cars. Companies will also be able to
designate a third-party as “travel arranger” to manage bookings for multiple

On the fee front, Orbitz said it will charge as little as $5 per ticket for
online corporate bookings, and full customer service capabilities will be
available for $15 to $20. Orbitz said its transaction fees “are expected to
be on average 75 percent less than the $40 to$60 fees currently charged by
off-line corporate travel agencies.”

Orbitz will charge a setup fee to load a company’s negotiated rates and
become the designated travel agency as part of its Travel Builder service,
which will be available in late August.

Meanwhile, another Washington hearing is on tap this week — a House
subcommittee will hold a hearing Thursday to air concerns about competitive
practices at Orbitz. The hearing, before a subcommittee of the House Energy
and Commerce Committee, was billed as “an examination of supplier-owned
online travel sites.”

Orbitz’ contract with a number of airlines includes a provision that the
airlines must always provide their best fares to the Chicago-based company.

The most recent Department of Transportation report on Orbitz fails to reach
any conclusions or recommend any action regarding the operation and in fact
says that has Orbitz has had “some pro-competitive effects in the market
place and has brought some benefit to consumers.”

However, the Justice Department is still looking into the matter and the DOT
report in late June said that the venture still could potentially have a
negative effect on airline competition.

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