Will Travelers Feel The Pain From Online Travel Consolidation?

The online travel industry has consolidated even further, with Expedia emerging as the 500-pound gorilla after its acquisition of Travelocity from Sabre Corp. for $280 million. The deal is just the latest for the Bellevue, Washington-based company, as Expedia owns nearly a dozen travel sites, including Hotwire and Hotels.com.

Sabre, meanwhile, will focus on its back-end system for selling airline tickets, hotel rooms and rental cars, the company said. Sabre is one of three companies worldwide that handles ticket sales for travel agencies and online booking sites like Expedia.

Travelocity’s customer base, which numbers about 20 million per month, will see no noticeable change following the acquisition, as Expedia has been powering Travelocity’s websites and giving it access to Expedia’s hotel listings since 2013.

Expedia will retain the Travelocity brand, the company said, and Travelocity will continue to operate out of its Dallas headquarters. Its key officers will remain, the company said.

Expedia’s shares rose $1.53 to $87.24 following the announcement.

The acquisition of Travelocity is just the latest activity in the online retail travel business. Orbitz has hired investment bankers to find buyers for the company, but both Expedia and Priceline already have said they were not interested in acquiring Orbitz. That leaves Orbitz as the smallest player in the field, with little hope of scaling up without an investor. Google, Amazon and Alibaba have been rumored to have interest in acquiring Orbitz, which would give the company deep pockets and major platform for more growth, but so far the three Internet giants have not gone public with their interest.

The news that Orbitz was looking for bidders helped its stock price to spike, reaching $10.07.

Meanwhile, Kohlberg Kravis Roberts, a New York-based investment bank, announced it has agreed to acquire Thetrainonline.com, a booking website for train travel within Great Britain. The price was not disclosed.

Virgin Rail Group established Thetrainonline.com in 1997; in 2006, Exponent Private Equity of Britain acquired a controlling stake for $247 million. Thetrainonline.com had planned to take Thetrainonline.com public before agreeing to sell itself to KKR.

The company said its website and mobile app had received an average of 20.8 million visitors a month in 2014.