OTA booking-fee cuts lead to more converts for some, fewer converts for othersNewsBy Dennis Schaal | November 4, 2009Share This article was originally published on A half year after major U.S. online travel agencies eliminated consumer booking fees for flights, the sky has not fallen, as some among us predicted.PhoCusWright, with an assist from Compete, studied the fallout, and found that in the intervening months, traffic to airline websites increased, but their conversion rates declined.Conversely, traffic to OTA websites decreased, but their conversion rates increased.Speaking of conversions, Jake Fuller, PhoCusWright's senior research analyst for finance and analytics, conceded last summer that initially he was overly pessimistic about Orbitz Worldwide's chances of weathering the booking-fee elimination given the fees' strong contribution to profits and the company's substanial debt obligations.Fuller now feels that the two OTA weak sisters -- Orbitz and Travelocity -- as well as Expedia and Priceline can survive without the fees as viable organizations because of the incremental volume they picked up by gutting the fees. Fuller explains his thinking here.Which doesn't mean that all four OTAs would remain independent companies. Consolidation still is a possibility.In the play-for-keeps faceoff between airline.com and ota.com, the OTAs' air-fee eliminations have not stemmed the defection of unique -- we all think we're unique, don't we? -- visitors to airline websites, according to PhoCusWright, despite the fact that the playing field was leveled because neither sector charges an air-booking fee now."With the removal of booking fees becoming permanent and standard, both OTAs and supplier sites will have to invest more to differentiate their offerings—a tall order with the razor-thin margins that characterize air distribution," PhoCusWright states.And, there's the rub -- and the perennial, uphill challenge.