How Does Sam’s Club Travel Compare to its Rivals?

How will Wal-Mart's wholesale club set itself apart from Costco, Orbitz, and vacation-home rental services?

Jun 27, 2014 at 9:16AM

Wal-Mart (NYSE:WMT) subsidiary Sam's Club launched its new travel portal this week. The wholesale club has partnered with Tourico Holidays, an international wholesale travel broker based in Florida, to serve up vacation packages, flight and hotel bookings, and other travel services to its members.

The move puts Sam's Club in competition with travel booking sites such as Expedia (NASDAQ:EXPE) and Orbitz (NYSE:OWW), as well as with competing wholesale club Costco's (NASDAQ:COST) long-standing travel service for its members. American leisure travelers are expected to take some 1.6 billion domestic trips this year, and international travel is seeing growth as well. The vacation package and travel booking market is large, but it's also crowded.

What does Sam's Club Travel bring to the booking game?
The first thing visitors to the new site will notice is that Sam's Club Travel can be browsed only by club members -- a setup that prevents non-members from searching for travel deals and comparison shopping. Visitors do have the option to buy a Sam's Club membership online. While Costco's getaway deals are only open to members, anyone can browse the site to see what's available. (Full disclosure: This reporter is a Costco member.)

Shoppers who can access the Sam's Club site -- which The Motley Fool browsed with a company-provided temporary ID -- will find a blend of club and mass-market travel-site features:

  • Reviews: Sam's Club Travel integrates TripAdvisor (NASDAQ:TRIP) reviews for hotels and resorts. Costco's site offers a star rating system but no user reviews.
  • Travel booking rewards: The site's Triple Dip program, similar to Expedia Rewards, awards a point for each dollar spent on most services offered through the travel portal, including flights, hotels, cruises, and more.
  • Hotel-only and flight-only options: This is similar to mass-market booking sites like Expedia and Orbitz. Costco offers package deals, cruises, and rental cars, but it does not offer hotel-only or flight-only options.
  • Vacation home and villa rentals: Sam's Club Travel really sets itself apart with offerings similar to HomeAway (NASDAQ: AWAY). Expedia and Orbitz group vacation rentals into their hotels category, while Costco doesn't offer separate vacation-rental deals.
  • A stronger focus on price than on premium deals: This is typical of the different markets targeted by Sam's and Costco. It also means Sam's Club Travel has a smaller, more curated selection than mass-market sites like Expedia and Orbitz.

In practical terms, how does this all sift out? We searched Sam's Club Travel, Orbitz, and Costco Travel for a holiday trip: airfare and lodging for two adults departing from Dallas for three nights in San Juan, Puerto Rico, over the July 4 weekend. Here's what we found:

Orbitz returned a total of 83 packages for two, ranging in price from $1,174 to $13,207. The results included budget hotels, the Ritz-Carlton in San Juan, and the priciest option, the Ritz-Carlton Reserve Residences at Dorado Beach.

Costco Travel yielded 14 flight and hotel packages, three of which were sold out, leaving 11 deals at hotels and resorts in San Juan and on nearby Vieques Island. Hotels included the Gran Melia Golf Resort and, as with Orbitz, the Ritz-Carlton. Package prices ranged from $2,525 to $3,480, typically with extras like activity passes or resort credits included.

Sam's Club Vacations, meanwhile, offered 15 results in the San Juan area, including the Gran Melia we saw on Costco Travel and a range of chain options from Comfort Inn to Sheraton's and Radisson's hotel/casino options. Package prices for two ranged from $1,756 to $2,740.

Sam's Club Travel's niche
Apart from being a service that adds value to its wholesale-club memberships, Sam's has carved out its own spot in the travel-booking ecosystem, somewhere between the all-possible-options approach taken by big booking names like Orbitz and the higher-priced packages offered by Costco. By offering a curated selection to people who get overwhelmed by Expedia and Orbitz, but at lower price points than Costco, Sam's seems poised to court travelers who are careful with both their browsing time and their money.

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Casey Kelly Barton has no position in any stocks mentioned. The Motley Fool recommends Costco Wholesale and HomeAway. The Motley Fool owns shares of Costco Wholesale. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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