Travel Weekly's Technology E-letter: Aug. 11, 2004

THREE BIG NAMES IN TRAVEL DISTRIBUTION -- IAC Travel, Amadeus and Orbitz -- reported revenue growth and rising profits in the second quarter. Expedia and its corporate cousins sold $3.4 billion worth of travel in the period; Expedia accounted for $2.6 billion, the company said. At IAC Travel, which includes Expedia, and Hotwire, total revenue rose 34%, to $556 million. Operating income rose 46%, to $129 million. On the downside, the corporate parents operating profit was flat at $110 million on revenue of $1.5 billion and corporate net income fell 25%, to $70 million. The company also scaled back its forecast. The initial reaction on Wall Street was disappointment, and the stock price plunged.

ORBITZ said it boosted revenue 30%, to $75.6 million, in the second quarter and generated net income of $10.4 million, reversing a net loss of $2.9 million a year ago. Gross travel bookings rose 21% and topped $1 billion. Air revenue rose 12%, to $44.2 million, and all other travel revenue rose 96%, to $22 million. Orbitzs merchant hotel program is in the latter category and sold 327,000 room nights in the period, a 600% increase.

AMADEUS also had a good quarter: Revenue rose 10.2%, to $620.9 million. Net income was up a much heftier 47.7%, to $68.8 million. Total bookings on Amadeus for the period rose 9.8% year over year to 114.7 million, with air bookings rising a little faster at 11.9% and hotels growing still faster at 16%. Revenue from supplier booking fees grew 10.4%, and nonbooking fee revenue, which is approximately 25% of the total, increased by 9.5%. The latter included a 54% hike in e-commerce revenue.

IN OTHER ORBITZ DEVELOPMENTS, it is inviting agents to join its affiliate program, which pays a flat affiliate transaction fee of $5 for air, $6 for retail hotel, $12 for merchant hotel, $2 for car, $22 for cruise and $16 for packages. Orbitzs existing affiliate program had been off-limits to agents because of GDS-regulation issues. Orbitz will try to leverage its policy of providing unbiased displays to reach agents -- particularly home-based retailers -- who do not participate in preferred-supplier relationships. After becoming a registered affiliate, agents would book travel on, and activity would be tracked through their e-mail address, ARC or IATA number.

AMERICAN EXPRESS GLOBAL INFORMATION SERVICES in December will introduce a reporting product, Variance Report -- Billed vs. Booked, which will detail the gap between what travelers booked and actually spent. Anre Williams, executive vp, U.S. commercial card, said the tool will identify the mavericks who think theyre helping their company by booking a lower fare but may be unaware of things such as overrides from preferred carriers, which sometimes are paid to the corporation by the agency. In a separate development, American Express Commercial Card doubled the countries for which it provides detailed expense data. It is adding 41 countries, all in Latin America and the Caribbean, bringing the total to 80. 

WORLDSPAN AND UNITED closed the loop on fare-data access, striking a deal that brings all United publicly available fares to Worldspans online agency retail partners. Worldspans traditional agency subscribers already had access to the United inventory, which includes Web fares. The agreement applies to online and traditional agencies in North America and the Caribbean. Worldspan also has Web-fare deals in place through late 2005 or 2006 with Continental, US Airways, Northwest and Delta.


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