The online travel agencies' one-upmanship tactics went into high gear last week as Expedia.com made permanent its decision to drop booking fees on flights.
The fee-free offer applies to product booked online; beginning June 1 Expedia will increase its fee for booking standalone flights via phone to $20.
The phone and online booking fee for flights, both of which had been around $7 to $11, had been temporarily eliminated during a promotion that began in March.
Both Travelocity and Orbitz have matched the cuts on air fees on a temporary basis; Orbitz also later lowered its hotel booking fees on a temporary basis, a move then matched by Expedia.
Expedia also won't charge consumers change- and cancellation fees, which ranged from $25 to $50, on most flights and on all cruise, hotel and car products. However, consumers still will be subject to change and cancellation fees levied by individual suppliers.
Tom Botts, a partner in the strategic advisory firm Hudson Crossing, called Expedia's decision to make the fee cuts permanent "a smart move" and a consumer win.
"While $7 doesn't seem like a lot, it might be enough to make a difference," he said. "There is a reason that airlines match each others' prices relentlessly."
The decision to drop fees for air bookings will cost Expedia Inc. about $3 million in revenue a month, according to statements previously made by executives.
Although Expedia kicked off the air-fee competition this year, the fee-cutting binge began in 2007 when Priceline removed air booking fees. Priceline then lowered its hotel-booking fees and eliminated change and cancellation fees on hotel reservations in July 2008.