Travelocity is holding onto its brand. But the guts of the online travel agency, which is owned by travel giant Sabre, are being outsourced to longtime rival Expedia.
In a deal that was announced today, Bellevue-based Expedia said that it will power Travelocity’s Web sites in North America, providing the back-end technology. It’s an interesting arrangement between the two entities, and some are saying that it amounts to an admission of defeat by Travelocity.
“This announcement stands as a true testament to the advanced capabilities that our significant technology investments over the past several years enabled us to build. We believe volume generated through the agreement will add further scale to Expedia’s global supply and customer service capabilities,” said Expedia CEO Dara Khosrowshahi in a statement.
Writing in Skift, reporters Rafat Ali and Dennis Schaal note that Expedia essentially has taken over its one-time rival, and as part of the deal may be able to acquire assets outright in the future. Travel analyst Henry Harteveldt tells Skift that the deal marks “the evisceration of the Travelocity product and a great win for Expedia.”
Earlier this year, Skift noted that Travelocity, which started in 1996, might actually be for sale, perhaps in advance of a Sabre Holdings IPO.
Shares of Expedia, which have lost nearly 25 percent of their value this year, rose 1.6 percent today to $46.47.