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Feb. 26, 2013 at 8:59 AM ET
Facing increasing competition from startups and search engines and mired in a relatively stagnant user experience, online travel agencies Expedia, Orbitz, Travelocity and Priceline got dinged in a recent major customer satisfaction report.
Released Tuesday, the American Consumer Satisfaction Index (ACSI) rated overall satisfaction with the online travel agencies, also known as OTAs, at 76 on a 100-point scale for 2012. That's a drop of 2.6 percent from the year prior.
In fact, travel was the only focus area in ACSI’s latest e-commerce report to post a decline; satisfaction with the other two sectors — online retail and online brokerage — were up 1.2 percent and 2.6 percent, respectively.
The online travel industry has seen a 15.2 percent increase in its ACSI scores since 2000, the first year they were measured. Back then, the Index only tracked Priceline. The biggest gain for online travel came in 2002, going from 69 to 77, when ACSI began measuring players like Expedia, Orbitz and Travelocity as well. However, overall industry performance has stuck to being within two points of that score ever since.
“There’s been a lack of innovation in the category,” said Larry Freed, CEO at ForeSee, which helps produce the Index. “Consumers are saying that the value they’re getting hasn’t kept up with how their expectations are evolving.”
According to Freed, those heightened expectations are being driven by innovative approaches being adopted by others in the industry, be they suppliers, new players, or Google.
In December, for example, American Airlines rolled out a new fare system that lets travelers bundle multiple services and amenities based on their personal preferences. On the start-up side, Pintrips, now in beta, borrows from Pinterest.com and applies "pinning" to airfares.
Search giant Google continues to roll out and refine its own travel-specific search products. These days, it’s the rare search for a flight or hotel that doesn’t return results from the company’s Flight or Hotel Finder, complete with prices from a variety of third-party sites.
Nor is the trend limited to travel. “Consumers are seeing the impact of smarter technologies in their everyday shopping experiences,” said Carroll Rheem, director of research at PhoCusWright. “Companies like Amazon and eBay are able to process the context of an individual’s history to build a much more relevant experience.”
Travel comparison sites, on the other hand, tend to focus on deals designed to appeal to as large an audience as possible. “It works a lot of the time,” said Rheem, “but we’re now at a crossroads where people are expecting something a bit more personal.”
Without that personalization, it also becomes more difficult for the sites to differentiate themselves in the marketplace. All four players were within two points of each other with Expedia and Orbitz at 76, Travelocity at 75 and Priceline at 74.
Each posted declines from the year before, except Orbitz, which was unchanged. The sharpest decline was posted by Travelocity, which led the category last year with a score of 79 but dropped 5.1 percent this time around.
One reason, says Freed, may be the website redesign the company unveiled in June 2011, which uses a four-step process that emphasizes trip segments over the larger experience.
“Consumers are more focused on where they’re going as opposed to whether they’re looking for a flight or a hotel,” he told NBC News.
The biggest challenge facing the online travel agencies, however, are search alternatives chipping away at their price-comparison prowess, and hotels and airlines promoting efforts to get travelers to book directly on their proprietary sites. Sometimes the best deals with the most options can be found booking directly from the airline.
But for those looking to maximize their options and are ready to look beyond the four brand-name booking behemoths, here's a few highlighted options:
- Kayak - Still the leading meta-search site for just-the-facts comparisons between providers.
- HotelTonight - The trick to this last-minute hotel discount site is that it only allows for mobile access, ensuring that you're "in-market."
- GetGoing - Steep discounts on airfares for the truly adventurous. You narrow your choices to two destinations and the site gets to pick which one you go to.
Rob Lovitt is a longtime travel writer who still believes the journey is as important as the destination. Follow him on Twitter.
