A month or two ago, Orbitz began charging a service fee of $5 for one ticket, $10 for 2 to 4 tickets - presumably a response to recent cuts in fees paid by airlines to online agents. Now they're waiving the fee for first-time buyers...I'm guessing that's an indication of the impact the fee has had on sales.

But here is my question: Why would anybody buy from them?

I like their search engine, but of course I'm going to find the fare there and then buy it elsewhere. Who wouldn't? Are they gonna make any money with this move?

[This message has been edited by Paulo (edited 01-14-2002).]

it's not about making money, IMHO. it's about squeezing out anyone else who sells airline tickets.

before the internet, the airlines relied on the travel agent to distribute their product. the major carriers each owned at least part of one of the major computer systems used by travel agents. SABRE, owned by AMR (the pAArent of AA) was more profitable than airline!

during the slowdown of the early 90's the airlines looked for a way to cut distribution costs. the couldn't get fees reduced by the computer systems they owned because of the profits those systems generated. so they started cutting commissions to travel agents. had the travel agents been smart, they would have shut their services down, and let the airlines get swamped, as travel agents still issue 70 to 80% of all tickets.

in the mid-90's the internet was in its infancy, and a few travel agents decided to see if they could make money there. most didn't until well financed sites like expedia and travelocity were born.

the airlines, thinking they had fixed the problem of distribution costs by reducing travel agent commissions, suddenly had a new problem. internet travel agents were taking the place in the distribution channel that the airlines had wanted for their phone sales. it meant building their own websites, and a lower commission structure, designed to make it harder for online, non-airline sites to compete. CO and NW have reduced commissions for tickets bought on-line to 0. brick and mortar travel agents earn 5%, capped at $20 on domestic tickets.

my own travel agent tells me that air sales were 75% of his sales 10 years ago, and are 15% today. i pay a service fee to my travel agent for the tickets i buy, but i feel i get something in return for the money. i don't see what i'd get for the money from travelocity or orbitz.

orbitz is designed to squeeze anybody but an airline or airline site out of the ticket selling business. my hunch is that the business model is losing money, more than projected. also, the airlines than own orbitz cannot afford the losses they budgeted for when they created the site, much less the current slow state of travel in general.

so orbitz sees that 70-80% of tickets are still issued by travel agents, and most travel agents change service fees. so they thought they'd try to get the same fee. personally, i don't mind paying a service fee, when i'm receiving a service. but on orbitz, or any other website, i'm doing the leg work! why should i pay more?

No way will I even book a hotel through Orbitz. If you look at the hotel listings, you will notice they do not provide numbers to the individual hotels. I assume this is so nobody will call hotel reservations directly to book a room. But quite often, I need additional info on a hotel, particularly if I've never stayed there before. So instead, I end up going to the hotel web site for the number. Then, as long as I'm there, I book the room.

I too, can't imagine why anyone would pay to book an airline ticket at their site. I bet they won't be around for the long haul.

they'll be around long enough to push everyone else out of the online airline ticket sales. then you'll see them start pushing customers towards individual websites, where it's difficult to compare prices, if not impossible.

an informed consumer is a dangerous thing to a company that relies on its best customer paying 2 to 3 times what the occassional customer pays for the same seat. the race to embrace the cost savings offered by the internet has completely destroyed the business model the airlines rely upon. it's the whole goose or golden egg story all over.

personally i think the airlines did it wrong. they were smart to embrace the internet, but foolish to destroy the travel agent distribution channel. smart thing would have been to eliminate general telephone sales. if a travel agent doesn't sell, the airline doesn't pay. but an airline still has to pay salary, benefits, overhead, etc. to a res agent. website and travel agents would have been a smarter solution. they could've eliminated a huge piece of their labor that way...

Why does everybody have so much trouble understanding why people book with Orbitz or any of the others? Simply put, at least for me, it's price.

If Orbitz is offering me flights I want for less then that same flights at the airline (and sometimes it's only $30 less, other times it's a 50% savings), then I'm going to book it. I don't care about a $5 fee (though it's always waived for me, something else I don't understand). The fee can be $200 per ticket for all I care, if in the end the total cost is less then I can get from the airline or Travelocity, etc, and sometimes it is and sometimes it isn't, then I'll book it through them.

I don't care about anything other then the final price, I can do the Hotel and flight research from other sites and come here to book. There are a zillion other places to look for the telephone numbers of the hotel if I have a question.

That is why people use Orbitz, and why people pay the fee, because in the end they are still saving money.

[This message has been edited by cordelli (edited 01-14-2002).]

I've seen fares on orbitz that I cannot get to come up on other websites and for that reason I have purchased tickets on orbitz. I'm not a first time customer and it still says the fee is waived if I try to purchase a ticket.

I am trying to book a ticket IAD-ATL with the maximum mileage. I've used the CO & NW websites, Expedia, and Orbitz.

I'm not keen on the $5 fee but it will be waived for a first time purchase. I have purchased from them before but prior to the fee. I do love their website and schedules and in this particular interest, Orbitz is the one giving me not only the best price (albeit by a small amount) but more importantly the most miles about 20% more than I can find anywhere else. I'm going with Orbitz b/c even with the $5 fee they are the best bang for the buck.

I do have a few questions as to how to beat the fee; If I re-register using the same credit card but a different email address, can I avoid this fee?

How about if I use a diff cc and/or diff mail address (i.e. work) and combinations thereof?

My sentiments, exactly. I always consult Orbitz during fare research. If I'm able to get a price <= Orbitz from another source, then I book with the other source. Otherwise, I suck up the $5 (which does seem to get waived fairly often) and consider myself fortunate to have snagged a lower fare. When you're saving hundreds of dollars, $5 is rather insignificant.

Well, so far, I have yet to see a fare on Orbitz that I could not replicate on the airline's own site - except for once, when the fare was, in fact, not valid and I received an error when I tried to book it on Orbitz.

So i agree with the theory here...I just don't think it occurs very often in practice.

i have two trips upcoming that i booked on orbitz that i was simply unable to replicate on any other web site. one was on klm. i went to klm's site (which is handled through nwa.com in the US) and the fare was dramatically higher. another was on delta. again, orbitz was better than delta.com or any other web site that i checked for that matter. so, its worth the annoying $5.

I'm also ticked off re Orbitz using pop ups like X-10. Its becomming just as annoying.

Just as with X-10, I would never use Orbitz because of this.

So even though you may be able to save $300 or $400 on a flight (or even $30 or $40), you will spend the extra money because you can't click one window shut? One mouse click on the X or one Alt F4 is worth that kind of money to you? Sometimes you can't help but be amazed as to how people are willing to waste money to make a statement.

it's about customer respect. from the sheer number of pop-ups, i get the impression that orbitz doesn't think much of me.

hey if AT&T called you every 20 minutes, offering you 3 cents/minute, would you take it? sounds like you would... and they wouldn't stop calling either.....

Maybe they hear you:

Orbitz Expands Travel Alerts

Orbitz, trying to distinguish itself in the eyes of customers amid a cutthroat online travel market, is expanding a system that warns travelers of impending flight delays before they get to the gate.

The system, called Orbitz Traveler Care Alerts, sends messages to travelers via Web-enabled handhelds and cell phones, e-mail or telephone. Orbitz is experimenting with notifying customers of flight changes by e-mail even when they don't ask to receive alerts. Orbitz plans this quarter to let users cancel and exchange tickets via the Web, interactive voice response or e-mail.

http://www.internetweek.com/customer...mers010702.htm

While I usually book on the US Air site, I booked my Christmas trip on Orbitz because it was significantly cheaper that what they wanted for it on usairways.com.