Driven by an increasingly fickle, demanding and connected customer the coming year will be one that sees the savviest and most strategic brands thrive.

In 2016 – surprise, surprise – expect ongoing consolidation across the travel industry in all corners of the world. It goes without saying, of course, that the battle between the ‘big two’ – Priceline and Expedia – is expected to intensify with both players continuing to snap up assets in the US, where together they dominate 90% of the market, as well as internationally. On this latter score, given where most outbound growth (most notably Asia) is coming from, Priceline appears to have the edge. Priceline-owned Agoda is one of Asia’s top hotel booking sites.

In 2015 Expedia, however, was certainly the most cash flush, acquiring big names Travelocity, Orbitz, and HomeAway for $280m, $1.6bn and $3.9bn respectively. That said, while thriftier – and perhaps less headline grabbing – Priceline’s acquisitions of Rocketmiles for $20m and PriceMatch and AS Digital for undisclosed sums in 2015 were carefully considered. Rocketmiles, for example, an OTA that includes airline miles with each hotel booking, saw Priceline taking a swipe at hotel loyalty programmes – one area where hotels have been able to hold ground.

So while on the surface, Expedia today looks better value for investors, Priceline’s more organic hotel strategy, and international focus, bodes well for the longer term. Indeed, one has to wonder if Expedia’s decision to invest millions into new flight products could be seen as an acknowledgement that it’s losing the hotel-booking battle?

Speaking of hotel-booking battles, with average daily rates rising throughout 2015, but direct bookings continuing to face pressure on all fronts, acquisitions were seen as a way to up the ante. Intent on pursuing a focused digital strategy towards direct bookings, among those was Accor’s purchase of Fastbooking earlier in the year. Later, in November, after much speculation Marriott pounced on rival Starwood to create the world biggest hotel company. And to end the year on a consolidating note, Accor then added added FRHI Hotels & Resorts, which owns luxury hotel brands Fairmont, Raffles and Swissôtel, to its stable for a mere $3bn. Rumours of an IHG takeover continue, and consolidation – of big players and the best innovators – remains swirling in the crystal ball.

Co-opetition will be the name of the 2016 game

But if you can’t beat or buy them, then the next best thing is, well, a strategic alliance – probably between one or other of the serious contenders in the travel distribution! Among the most significant alliances of 2015 was one between Priceline and TripAdvisor – aside from Google, of course, the review giant is one that is best positioned to break the OTA duopoly.

Priceline was arguably quicker off the mark than Expedia to recognise the impact of the review giant’s Instant Booking programme (which, significantly Marriott also signed up to). Considered a game-changer of 2015, Instant Booking was hailed as further proof of the blurring lines between the OTAs and metasearch.

Meanwhile, though Google insists that it’s no OTA, improvements to hotel search last year with the launch of Google’s Hotel Ad’s and ‘Book on Google’ took the search giant a step closer to cutting out OTA middlemen.

Read rest of article at: Eye for Travel