Fly.com, the travel meta-search engine operated by the travel deals publishing company, Travelzoo (NASDAQ:TZOO), recently announced that it started displaying fares from Orbitz, giving users the ability to compare prices from all the major U.S. online travel agencies. Fly.com, which already compares fares from airlines, Expedia (NASDAQ:EXPE), Priceline.com (NASDAQ:PCLN), Travelocity, Hotwire and CheapOair, is the first airfare search engine to show results from all major online travel agencies in one view, making it the most comprehensive airfare search engine in the United States. Fly.com directly competes with the travel meta-search engine providers such as Kayak.
While the breadth of search results and features like fare calendars, easy-to-use filters that help sort results, baggage fee information, and real-time Twitter fare alerts continue to attract visitors to Fly.com, the site generates additional traffic from the synergies that accrue from Travelzoo’s core travel deals business. We discuss the nature of the synergies between the two businesses in more detail below.
We have a Trefis price estimate of $30.38 for Travelzoo, which represents at least 20% premium to the market price on the last close.
Travelzoo recognizes Fly.com as a meta-search opportunity with attractive economics and is creating synergies with its own travel business offerings like the Top 20 newsletter. The company sees particular opportunity in cross promoting deal content between Travelzoo and Fly.com that will help improve deal content. Additionally, the company is placing Fly.com widgets on Travelzoo websites to leverage its user base to boost traffic at Fly.com.
Last year in July, Fly.com received record 5 million searches, a y-o-y increase of 46%. Warren Chang, general manager of Fly.com, notes that the traffic increase occurred despite the fact that Fly.com ran TV ads around July 2010 and has no such ongoing campaign now. He attributed the increased searches in part to more Fly.com widgets on Travelzoo hotel pages and increased direct traffic.