If Travel is Down, Why Are Travel Web Sites Doing Well?

(MoneyWatch)  Both Priceline and Orbitz reported higher revenue and profits than expected in the third quarter, despite a travel industry-wide lull. So, why are the online travel agencies doing well when other aspects of travel are flailing?

Some say it's because the leisure travel market is recovering faster than business travel, but I also think that an online travel agency has far less risks than a major airline or hotel chain. In fact, from previous reports, we know that such Web sites are muscling lower hotel prices when possible and can be seen as competitors more than collaborators. In several scenarios, OTAs gain profits while their member hotels lose them. Many critics of the Web sites say it's the price hotels and airlines are paying for not offering great deals directly to consumers.

The trouble with the OTAs is that for many consumers, they cease to have an identity. While William Shatner is probably the highest-profile spokesman (although he's probably on par with the Travelocity gnome) many consumers have little or no recognition of each Web site or loyalty to it. As reported on Medill:

Orbitz, Travelocity, Expedia, I feel like they all give you the same options, with results from multiple airlines, kind of giving you a slew of what fits that criteria," said Johnson & Johnson customer business analyst Hannah Chi, 29, who flies once per month for work and personal travels. "Each doesn't give me anything that another travel engine wouldn't give me."

The only saving grace for hotels and airlines is to realize that consumers will go wherever they find the best deal. That could also mean a hotel or airline's Web site if it's easy to use, easy to book and provides information easily available on other travel Web sites. So why haven't they done that?