The answer to that question is very simple. Brick and mortar - physical - travel agencies typically have to charge higher prices for vacations to cover their operating expenses and to pay their travel agents. Online travel sites have access to all of the same travel providers that brick and mortar agencies use. Because of lower overhead, the prices that are charged are lower resulting in better prices for the traveller.
The most common and more successful travel portals are Expedia, Travelocity and Orbitz. Simply speaking, these sites have replaced the travel agent. What they are
actually doing is purchasing “travel†at wholesale from a consolidator, marking the price up, then selling to you.
Without the need for a traditional business location, and with the sales of paid advertising on their websites, allows them to pass on greater savings than the “brick and mortarâ€
agents or the smaller offline and online travel agencies who simply cannot compete.
What is a travel consolidator?
At any given time, the travel industry, that being airlines, hotels, resorts, cruises, timeshares and so on, is operating at a 30-40% vacancy rate. Rather than let this “inventory†of rooms and seats sit idle, travel and tour providers offer
their “vacancies†to what are known as “consolidators†or “wholesale†travel distributors. These “consolidators’ then make this discounted inventory available to insider travel
agents and portals such as Expedia, who then offer “marked up†deals.
Hope this answer helps.
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