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With general public access to the Internet since the mid-1990s, many airlines and other travel companies began to sell directly to passengers. As a consequence, airlines no longer needed to pay the commissions to travel agents on each ticket sold. Since 1997, travel agencies have gradually been disintermediated, by the reduction in costs caused by removing layers from the package holiday distribution network. However, travel agents remain dominant in some areas such as cruise vacations where they represent 77% of bookings and 73% of packaged travel. In 2009, the market size for travel agencies experienced a sharp decline, dropping from $17 billion the previous year to $14.5 billion.
In response, travel agencies have developed an internet presence of their own by creating travel websites, with detailed information and online booking capabilities. Travel agencies also use the services of the major computer reservations systems companies, also known as Global Distribution Systems (GDS), including: Amadeus CRS, Galileo CRS, SABRE, and Worldspan, which is a subsidiary of Travelport, allowing them to book and sell airline tickets, car rentals, hotels, and other travel related services. Some online travel websites allow visitors to compare hotel and flight rates with multiple companies for free; they often allow visitors to sort the travel packages by amenities, price, and proximity to a city or landmark.
Travel agents have applied dynamic packaging tools to provide fully bonded (full financial protection) travel at prices equal to or lower than a member of the public can book online. As such, the agencies' financial assets are protected in addition to professional travel agency advice.
All travel sites that sell hotels online work together with GDS, suppliers, and hotels directly to search for room inventory. Once the travel site sells a hotel, the site will try to get a confirmation for this hotel. Once confirmed or not, the customer is contacted with the result. This means that booking a hotel on a travel website will not necessarily result in an instant confirmation. Only some hotels on a travel website can be confirmed instantly (which is normally marked as such on each site). As different travel websites work with different suppliers, each site has different hotels that it can confirm instantly. Some examples of such online travel websites that sell hotel rooms are Expedia, Orbitz, and Priceline.
The comparison sites, such as Kayak.com and TripAdvisor, search the resellers sites all at once to save time searching. None of these sites actually sells hotel rooms.
Often tour operators have hotel contracts, allotments, and free sell agreements which allow for the immediate confirmation of hotel rooms for vacation bookings.
Mainline service providers are those that actually produce the direct service, like various hotels chains or airlines that have a website for online bookings.
Portals serve as a consolidator of various airlines and hotels on the internet. They work on a commission from these hotels and airlines. Often, they provide cheaper rates than the mainline service providers, as these sites get bulk deals from the service providers.
A meta search engine, on the other hand, simply scrapes data from the internet on real time rates for various search queries and diverts traffic to the mainline service providers for an online booking. These websites usually do not have their own booking engine
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