Orbitz Worldwide, Inc. (OWW), Priceline.com Inc (PCLN), Expedia Inc (EXPE): Can This Travel Agency Crack the Top Tier?

Looking into the crystal ball

The online travel agents are one of the internet’s great success stories, as consumers have shifted their purchases away from traditional travel agents.  However, the space is getting increasingly crowded as search engines, like Google Inc (NASDAQ:GOOG) and Microsoft Corporation (NASDAQ:MSFT)’s Bing, move into the business.  For its part, Google has created a flight search tool that often sends users directly to travel providers’ websites, completely bypassing the online travel agents.  In addition, consumers are gravitating toward travel research websites that provide information and recommendations, rather than just the ability to cheaply book travel plans.

The bottom line

Despite its name recognition, Orbitz Worldwide, Inc. (NYSE:OWW) has a rough road ahead as better-funded competitors try to encroach on the online travel business.  Both Priceline.com Inc (NASDAQ:PCLN) and Expedia Inc (NASDAQ:EXPE) have recognized the risks posed by the search engines, which has led to recent acquisitions in the search area.  Priceline acquired meta-search provider Kayak in 2012 and Expedia has agreed to buy a majority stake in search provider Trivago.  With consumers looking for more guidance and ideas in their travel planning, Orbitz needs to improve its search capabilities if it wants to improve its position and enhance its growth opportunities.  With $400 million in debt, investors should let this one pass and stick with the top two players.

Robert Hanley owns shares of Priceline and Expedia. The Motley Fool recommends Priceline.com. The Motley Fool owns shares of Priceline.com.