Tourism Industry News
Orbitz Joins Others in Waiving Booking Fees
Orbitz Worldwide Inc. said it will waive booking fees on most flights booked on Orbitz.com and Cheaptickets.com through May, making it the last of the big online travel agencies to concede the valuable fee revenue -- at least through spring.
Last month, Expedia Inc. announced it would drop booking fees on airline-ticket purchases until May 31, matching a long-term program already in place at Priceline.com and Expedia Inc.'s Hotwire.com. Later in the month, Travelocity.com, which is a unit of Sabre Holdings Corp., dropped booking fees, also through May 31.
Analysts say the loss of airline booking-fees will eat into online travel agents' revenue, especially Orbitz, which relies more heavily on airline ticket sales. Citigroup analyst Mark S. Mahaney said he believes the fees account for as much as 60% of Orbitz's operating profit.
Barney Harford, president and chief executive of Orbitz since January, said there are a "number of things we can do on the cost side to make sure business is right-sized." He declined to give specific examples, ahead of the company's first-quarter earnings announcement.
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