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Orbitz Doesn't Soar


A year ago, casual observers thought online travel agencies such as Expedia.com (EXPE) and Travelocity.com (TVLY) were going to crash and burn. They were dot-coms, no? But instead, both have positive operating cash flow. There is, however, a new threat on the horizon: Orbitz.com, the month-old site owned by five U.S. airlines that has vowed to discount its way into consumers' hearts. Will Web travel soon orbit around Orbitz?

To dope out Orbitz' impact, we dispatched a crack research team--me--to scout 15 fantasy trips of BusinessWeek staffers, from Steve Hamm's Alaskan fishing reverie to Heather Green's jaunt to Zanzibar. Oh yes: My boss, Kathy Rebello, asked me to send her to Fiji. (Uh, how long would you like to stay there, Bosseroo?) The idea was to get a sampling that would cover all the things a full-service travel site should do well.

The verdict: Orbitz does some things well some of the time, but has significant disadvantages, too. It's very competitive if you want cheap flights, à la carte. It has most of the basics you want from an online travel site: airlines, hotels, cruises, and rental cars. But if you want a full-service travel agency with a full range of package trips and savvy advice, it lags.

Let's start with the good part. When I just wanted flights at the lowest prices, Orbitz did fine. In most comparisons, it was cheaper than the competition. Kathy's flight from San Francisco to Fiji came up at $1,392, vs. $1,406 on Expedia and $1,541 on Travelocity. Heather's flight to Zanzibar came up at $3,262 on Orbitz and $3,924 on Expedia. My flight from Newark, N.J., to Jacksonville, Fla., to visit in-laws who want to see a lot of my new son, came up at $172 on Orbitz, $171 on Expedia, and $171.50 on Travelocity.

I found Orbitz pretty bad for the vacation packages so favored by bargain-hunters. It offers some standard deals for established tourist havens in the U.S., Europe, and the Caribbean, but it stumbles when it comes to anything off the beaten track. Expedia has far more options--thanks partly to its alliance with adventure-travel specialist Away.com Inc. (Tip: Look under adventure travel on Expedia or Travelocity, rather than under "packages," if you want trips that are at all unusual). Consider Kathy's trip to Fiji: For $3,385, all expenses included, Expedia could send her on an all-women tour of Fiji and nearby New Zealand that would have her singing native songs with the Maori people. Orbitz doesn't offer packages in Africa or even Alaska, leaving Steve out in the...uh, cold.

Orbitz also falls well short in helping people sift the vacation options out there. When my wife and I last went to the Caribbean, my travel agent asked a simple question: Do you want nightlife, or someplace quiet? Quiet, we said. Off we went to Grand Cayman, which is nothing if not quiet, for a price so low it should be illegal. Travelocity and Expedia also gather very basic information from you about the trip you want. Despite all that Web personalization software can do, it's curious that Orbitz doesn't help you craft a trip to even such simple specifications. Recommendations are what travel agents do.

Like its rivals, Orbitz does little to book activities in cities you visit. BusinessWeek's Digital Lifestyle columnist, Joan Hamilton, can get a package to take pals to Chicago in August but can't buy Cubs-Giants tickets on Orbitz or the other travel sites. None offers Broadway tickets, hampering my show-weekend package. A travel agent can take care of these things.

Orbitz has enough virtues to be competitive, though, and that's a good thing. You and I will benefit from extra competition through better service and lower prices. By Timothy J. Mullaney


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