Chris McGinnis
Cesar Millan
Sam Lowe
Jason Fogelson
Bryson Forbes
Amy Graff
Karla Henriquez
Consolidation Blues
May 4 2010 by Chris McGinnis
In what appears to be the waning days of the current recession, the travel industry is finally moving toward consolidation, something that travel experts have been forecasting for years.
Recently, frequent travelers have seen Delta Air Lines merge with Northwest, Frontier merge with Midwest and the beginning of what looks like a United /Continental merger.
On the car rental front, we've recently watched Avis combine with Budget, Enterprise snap up National and Alamo, and most recently, Hertz announced its intention to buy Dollar-Thrifty for $1.2 billion. Last year, Hertz bought Advantage.
What does all this mean for business travelers? In the long run, basic economics tells me that fewer competitors will eventually lead to higher prices. This is something that's already come home to roost in the car rental industry, where prices have increased in recent years despite the economic slowdown.
The upside of consolidation is a healthier travel industry. As merged companies earn higher rates, they'll be able to plow those new profits into better products.
Airlines will be able to buy new planes, invest in new technology and spiff up their airport facilities. Car rental companies will be able to get rid of their clunkers and improve airport rental facilities, resulting in shorter lines and waits for shuttles.
Despite consolidation, there will still be plenty of competition in many markets. Merged major airlines will still have to compete on price with low-cost carriers such as Southwest, AirTran and jetBlue. Road warriors still have the option to choose from several smaller, low cost rental car options such as Fox, Payless and smaller locally-owned options. However, in markets where there is little or no competition from low-cost providers, rising prices could sting business travelers on tight budgets.
As The World's Biggest Hotel Family®, we know it is a big world out there
with lots of places to see and experience. Best Western's You Must Be
Trippin' travel blog offers travel tips, ideas and feature destinations
to make your next trip a success. We are also interested in where
you've been trippin' and invite you to share your travel ideas, tips
and destinations with us.
Please wait while my tweets load 
Follow Us
