Online travel company Expedia announced that it will purchase Orbitz for $1.33 billion. This follows its earlier purchase of Travelocity for $280 million.
Expedia’s Chief Executive Officer, Dara Khosrowshahi, explained that, “[Expedia believes that] Orbitz can add to scale and add to [their] ability to run a more efficient machine.”
It is believed that Expedia’s latest moves were made for the group to stay competitive with the Priceline Group, which owns Priceline, Booking.com, Kayak and OpenTable.
The online travel agency business is constantly changing and longstanding groups like Priceline and Expedia are facing the challenge of staying competitive in the face of the proliferation of various new online travel agencies. A high level of investment is needed for these groups to stay relevant and to hold on to a significant portion of the market share.