Expedia Purchases Travelocity for $280 Million

In a deal that was a little under two years in the making upon close inspection, Expedia has agreed to purchase competing travel website Travelocity for $280 million from its parent company Sabre Corp., Mashable is reporting. This sale comes at a time with the online travel industry has become populated with startups and big Internet players like Google trying to get in on the act, forcing the old guard to either adapt or consolidate.

Travelocity was founded in 1996 as an extension of American Airlines before it was spun off in 2000 as its own stand-alone company. In 2013, Expedia agreed in a partnership to handle Travelocity’s bookings, combining Expedia’s connections with Travelocity’s recognizable branding.

“Evolving this relationship strengthens the Expedia Inc. family’s ability to continue to innovate and deliver the very best travel experiences to the widest set of travelers, all over the world.” said Dara Khosrowshahi, the president and CEO  of Expedia in a company press release from Jan. 23.

The news of this merger comes at a time when Orbitz, the smaller of the mainstream online travel agencies, is also reportedly “exploring a sale” according to Bloomberg. The $1.1 billion company shot up to $9.95 per share in Jan. 23 trading as shareholders expect a move in the wake of the Expedia-Travelocity deal.

Combining companies in this space is also a clear indication of the fiercely competitive world that online travel has become thanks to startups like Kayak and Hipmunk, as well as Google’s licensing deal with hotel booking startup Room 77 Inc. A possible merger would make them less “crowded,” and strengthen existing players as they try to stay competitive against the tide of new entrants into the multibillion dollar business.