Flying High on the Web

Sorry, InterActiveCorp (Nasdaq: IACI  ) . Bummer, Sabre (NYSE: TSG  ) . Tough break, Cendant (NYSE: CD  ) . Your Expedia, Travelocity, and Orbitz online travel agencies apparently haven't hit home with the jet set. Though they seem to like your digs well enough, business travelers still go elsewhere to spend their moolah. Or so says new research from e-commerce services firm Keynote.

The study of 1,500 travelers found that 60% began their shopping at either one of the online agencies -- Expedia was the most popular -- or at a search engine such as Google (Nasdaq: GOOG  ) or Yahoo! (Nasdaq: YHOO  ) . But many of those browsers aren't buying. Indeed, agencies only hold a slim edge over corporate sites in booking airfares (32% vs. 29%) while business travelers show a strong preference (36% vs. 30%) for going direct when shopping for hotels.

Yeah, I know. You're skeptical. You should be. After all, Delta (NYSE: DAL  ) has been on the brink of bankruptcy. AMR's (NYSE: AMR  ) American Airlines has danced at the precipice of disaster. And we're all too familiar with the ugliness that has plagued UAL Corp's United and barely breathingUS Airways. Not even Motley Fool Stock Advisor pick JetBluehas been spared from the downturn in the airline industry.

But is this study really all that hard to believe? It shouldn't be. Remember, when Northwesthiked ticket fees in August, missing from the list of places where you'd have to pay more for booking a flight was -- yep, that's right -- the Web. The airlines and lodging chains such as Hilton and Starwood want their customers paying them a digital visit. And some, such as JetBlue and Southwest, pretty much strong-arm travelers into booking fares at their sites or through their call centers.

Apparently, business travelers don't mind. Though that's bad news for the online travel agencies, it's probably the best news the airlines have gotten in months. It seems they've actually found a profit center they can control by themselves. Now if they can just hold on to it.

For related Foolishness:

  • It won't get any easier for the online agencies when Time Warner's AOL unit launches its own travel portal next year.
  • Does anyone really getTravelzoo?
  • It may be too late for you to enjoy a Four Seasonshoneymoon, though your European vacation might include a jackpot at 30,000 feet.

Has your portfolio been grounded for too long? Not to worry, we're here to help. Try any of our investing newsletters free for 30 days.

Fool contributor Tim Beyers doesn't own shares in any of the companies mentioned, but he has family members who are retired from United Airlines. You can view his Fool profile and stock holdings here.


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