The Mystery behind Momondo

 

Need to know:
  1. Momondo doesn’t always have the most up to date pricing information. There are times when you may book and the fare will already be gone.
  2. Customer service through Momondo is generally less than stellar, and most vendors don’t offer 24 hour cancellation policies.
  3. Avoid booking through Momondo if there is only a small difference from booking directly with the airline. Booking direct is always best!
  4. The largest price savings will be found with Star Alliance carriers (specifically Air Canada & United).
  5. 99% of the time there are no issues when booking through Momondo, and it can be an easy way to save on your next flight.

 

Many Thrifty Traveler readers ask, “What’s the deal with Momondo? You say it’s one of the best ways to book the cheapest flight possible, but why does it always find the cheapest prices for flights? And…is it safe?” These are both simple and complex questions so I’ll try to answer as clearly as possible.

 

First, it’s worth understanding what Momondo is, a bit of its history and how it fits into the travel industry.

Most of us think of Momondo as a travel search engine and that’s true, but it’s a particular type of a search engine known in the travel world as a “metasearch” engine. In layman’s terms – they don’t sell any travel. They find offers from online travel agencies (OTAs) such as Expedia and Priceline, and also directly from airlines, hotels, etc., then aggregate them, pass them on to would-be-travelers. Sounds familiar, right? There’s a whole host of these guys out there: Kayak, Skyscanner, Trivago, and yes, Google. Kayak is the most familiar in the travel industry as they were the pioneers in this space back in 2004 and are U.S. based. Momondo started a couple of years later in 2006, but in the far away land of Denmark where they grew and evolved to become a household name in Europe.

Some of us may wonder why these metasearch sites are necessary when there are big OTAs such as Priceline and Expedia. BUT! (1) There are some airlines that don’t sell through OTAs, Southwest being the biggest; (2) some airlines will choose to offer the cheapest fares directly from their own websites; and (3) there are some OTAs that will find a way to sell a fare that undercuts airline websites and all other OTAs. It is the grey space between all of these scenarios where Momondo lives and why they capture our attention.

The concept was valuable enough that the big boys have invested in these metasearch engines. Priceline first bought Kayak who, in turn, bought Momondo just this past year. Google bought a lesser known company known as ITA which subsequently powered their indispensable Google Flights service. So while all of these entities are separately branded services, they each bring a valuable link to the chain of travel distribution. This is where we start getting into the question, “why does Momondo seem to always find the cheapest options?” But…first we need to understand how they make money.

Many of us know that travel agencies earn a commission for selling any type of travel service. That holds true in the online space as well where the OTAs bread and butter are sales commissions. Momondo, per their own site, only requires 25% of the commission pie which they claim to be amongst the best commission rates in the industry. In other words, OTAs get to keep 75% of their commission and Momondo only gets 25%. Not bad and this is a reason why they can offer lower rates.

Given that Momondo offers one of the best commission rates in the industry, just about every OTA out there wants to sign-up as an affiliate. This is why you see such a lovely array of OTA names such as TravelMerry, Fareboom, and DoHop. And wouldn’t the odds have it that these less than recognized OTAs offer the lowest fares?! While commissions are one source of revenue for travel agencies, “mark-ups” are another. Airlines put together special “unpublished” fare deals for travel agencies, but typically set conditions that must be met in order to receive those fares such as: (1) sell to a specific demographic like students, for example, and most importantly (2) do not undercut what is sold on the airline’s website so they can fulfill their best fare guarantees for their website.

Some OTAs satisfy these conditions by “marking-up” the discounted fare to equal what would be published on the airline’s site and earn some extra profit. Other OTAs bundle the air fare into packages along with hotel, car, or cruise services where the consumer can’t see what the actual fare paid is. Student OTAs like Student Universe, require students to register an account along with verifiable student status in order to have access to discounted fares. And, of course, some OTAs disregard those conditions and pass on the discounted fares to the public…or maybe they have special permission to do this…hard to say.

Airlines typically enforce their best fare guarantees but with Momondo’s smaller OTAs, it’s like the wild west. SkyTeam airlines such as Air France and Delta typically only offer a small savings with Momondo, but Star Alliance carriers such as Air Canada and United typically offer the greatest savings using Momondo

So are these miraculous deal providers safe? They are by-and-large safe. They sell legitimate tickets and are subject to regulations required by IATA – the United Nations of the travel world who governs the industry. Momondo is also likely to have checks in place to ensure they are viable agencies.

What we at Thrifty Traveler would caution about, however, is the customer service support that may be required before or during your trip. Given that these agencies are not as large, established, or financed as Priceline or Expedia, their customer service is likely less staffed by comparison. It is important to know when you travel that the agency that issues your ticket may be responsible for any required changes. That said, many many people book with the lesser known OTAs and have no issues.

We here at Thrifty Traveler want you to have the travel experience for the best price, and we simply encourage you to consider your priorities from price to comfort. We wouldn’t encourage deal finding through the likes of Momondo and its affiliates if it weren’t safe. We hope that this article provided some valuable background to help make better travel decisions!

 

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  • DoTheMathAlready

    Always wanted to know how this game was played. Thanks for providing a valuable update.