Although it’s too early to know if this is a significant trend, American Airlines decision to pull all their Kayak.com listings – reported here by TechCrunch – should be cause for great concern among the online flight ticking agencies like Orbitz, Kayak, Farecast, and more.
The power of services like Kayak lies in the ability to consolidate most of a buyers options on a single screen. Even quality competitors like OneTime.com suffer from having too many screens in the mix, diminishing your ability to find the best fares. As Airlines drop these services users will find it harder to offer the best pricing, and we will be forced back into the “old web” nightmare of screening dozens of sites to find the best pricing and availability.
Hotels leaving these services could doom them to failure. Hotels.com is not all that popular among hotels but many feel the volume provided by Hotels.com makes it an essential part of their marketing plan. However many online shoppers do not realize that their booking often includes fees as high as 20% and sometimes more to the online service. Currently this generally comes out of the hotel’s profits, but as systems improve and streamline hotels are looking to book directly and avoid those middle man fees. Consolidators like Kayak and Hotels.com should be very aware that their prosperity hinges on a strong and positive balance of participation by consumers and providers. AA is throwing a small wrench into the cogs but there are many more to come.
Joe Duck 
I think the root of the problem stems from poor pricing of the product be it either hotel rooms or airplane seats.
Its basically, We will try to sell at high prices and when things don’t sell to well, we will wholesale out our empty room or empty airplane seat to a service that rips off its customers and annoys the hell out of them.
What hotel or airline will profit from annoying its customers to such a degree. Its the inefficiency of selling the original product and trying to price it too high to begin with.
I don’t see how these ticket consolidators have a sensible pricing plan either. If you buy a ticket from Kayak but do NOT take the flight, you pay more? I think thats the way it works. Its absurd.
It all stems from the basic premise: a hotel or an airline thinks they will make more money overall … and will never have to pay for annoying their own customers with these “sticker priced” rooms or airline seats.
I recall one Hotline ticket customer who sat at an airport watching plane after plane to his destination take off with empty seats while the airline waiting for his specific flight refused to put him on an earlier flight because he had a Hotline ticket.
Yet there have been people who walk up to a hotel desk and get a room quote then log onto the internet from the lobby and get an even lower quote.
Hotels seem to see profit in wholesaling their rooms out rather than giving their customers a pleasant stay, pricing their rooms sensibly and refusing to deal with places like Hotel.com.
The solution is to start with sensible prices and have a hotel sell its room to travellers or else not sell it at all. Just as an airline would have to sell its tickets to travellers or not at all.
Perhaps we should look at this as the drawback of converting everything to a commodity and its price.
Look what happened to the credit markets when we abolished the relationship between a banker and a mortgage. Look at what happened to Wall Street when first-day pops of over 100 percent became the expected norm instead of a disgrace.
Consider these magazine publishers who are faced with third party hustlers who try to sell magazine subscriptions using child labor and aggressive tactics. The magazines don’t just accept the income and mail out the magazines, they refuse to deal with such ‘aggregators’.
But along comes ‘The Web’ and ‘price scrapers’ and suddenly airlines and hotels are willing to deal with aggregators and wholesale off their seating capacity or room capacity. If it hasn’t sold at the “sticker price” the hotel/airline is willing to sell to the hustlers at a steep discount even though they know the hustler will turn around and screw his customers.
I’ve never particularly liked those websites that go thru all the zillions of permutations and combinations of flights and then present me with a humungous list of those that go to absurd layovers no where near a direct route to my ultimate destination. It may be nice that I can fly from Los Angeles to San Francico via O’Hare but who would want to do that? So I have no love for those travel sites. And hotels that sell rooms with “sticker prices” aren’t particularly high on my list either.
FG lots of interesting points above. If this keeps up you may get your with and we’ll see consolitation sites die in favor of more consistent pricing models. In a way the internet may be *too effective* at allowing price to be the driver. I was told that our hotel in Shanghai in April was doing well because they were the *first listing* when you searched by price at Hotels.com. Other similar places may have been willing to match them in price but I never even tried. It *was* a good hotel, but the internet focused a lot of folks exclusively on that property. (Hengsheng Peninsula Hotel). It was not on the Bund as I had expected though I have not gone back to see if I was misled or just misread.
I just got some very interesting new information about this from Edelman, Kayak’s Advertising Agency – posting that soon here and at the Airports Blog http://blog.quickaid.com
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