AOL AND
TRAVELOCITY renewed and expanded their partnership April 1
for two years, with an optional third year. Although Travelocity has
been the exclusive reservations engine for AOL Travel since 1999,
the new agreement was somewhat of a surprise. Thats because AOL invested $2
million in metasearch engine Kayak in 2004, taking a minority stake, and has been
promoting Pinpoint Travel, the Kayak-powered comparison-shopping
engine that Travelocity shuns. But, with the new agreement, AOL
claims that the partnership has deepened. The new agreement has the
relationship evolving from an exclusive distribution partnership to
a strategic technology relationship, said Jeffrey DeKorte, vice
president and general manager of AOL Travel.
TRAVELOCITY will continue to be AOLs
exclusive, integrated online travel agency, the air, car, hotel,
package and cruise provider for AOL properties, according to
DeKorte, but, the new pact will have Travelocity using its travel
and technology expertise to make AOL Travel more comprehensive,
integrating editorial content and user-generated reviews and blogs,
personalization features, MapQuest maps, RSS (Really Simple
Syndication) alerts and video. AOL also gets the right to integrate
Pinpoint Travel beyond AOL search functionality and into AOL
Travel, officials said. We want to make a way bigger bet on the
travel category, and some of the things that you need to make that
bigger bet are really innovative products that Travelocity has
added into their mix, said David Lebow, the executive vice
president and general manager of AOL Media Networks.
THE CITY OF
ATLANTA joined the ranks of several other big U.S. cities
and sued the major online travel agencies for allegedly unpaid city
hotel taxes. The civil suit, filed March 29 in the Superior Court
of Fulton County, seeks to collect the allegedly unpaid taxes as
well as damages, penalties and interest. The suit doesnt estimate
the amount of taxes owed because it alleges that the defendants
have not filed required reports on their sales. The litigation
seeks an accurate accounting of the amount of taxes allegedly owed,
the establishment of a trust to cover the liability and the
granting of a preliminary and permanent injunction requiring
defendants to collect and remit occupancy tax on the full
consideration that is paid by customers for the right to occupy
rooms in the city. The defendants are Cendant Travel Distribution
Services, Expedia Inc., Priceline.com, OneTravel Holdings, Travelocity.com,
Site59 and some
of their affiliates.
THE SUIT
ALLEGES that the defendants act as hotel operators or
agents of the hotel when they sell rooms on a merchant basis and
that they improperly collect, or should be responsible for, taxes
on the retail rate but only remit taxes on the wholesale rate they
get from the hotels. Seeking to show that it is appropriate to sue
the online agencies together, the suit alleges that the defendants
acted in concert and jointly in their industry-wide failure to
remit applicable taxes under shared business models. To back up
that claim of collusion, the suit cites the defendants numerous
partnerships, common practices and technology, communications with
one another and membership in the Interactive Travel Services
Association. Other Georgia municipalities as well as Los Angeles,
San Diego, Chicago and Philadelphia, among others, have filed
similar suits. The online agencies counter that they are following
local tax laws in paying taxes on the net rate because they do not
control hotel inventory and thus are not hotel operators or agents
of the hotel and thus are not liable for taxes on the retail rate
that consumers pay.
CONTINENTAL, following an earlier warning
by American, said it may not participate in all GDSs in the future
and cautioned agencies in a letter to consider using alternative
companies to access its flights. Continental, which is negotiating
new GDS contracts, noted that it may consider introducing an extra
distribution charge if agencies book their flights through
higher-cost channels. Continental has contracts in place today with
Sabre and Amadeus that do not allow them to share fare, schedule
and inventory information between them, Dave Hilfman, Continentals
senior vice president of worldwide sales, wrote in a letter to
travel professionals March 28 about the Sabre-Amadeus
content-sharing agreement. We will take the appropriate actions to
protect our content if it is used by any GDS company without our
permission. Separately, American signed a five-year content
distribution agreement with Worldspan that begins Aug. 1 and gives
agencies the opportunity to access Americans inventory. American
and Worldspan have been particularly coy about their agreement,
which may be the first major airline opt-in agreement, where travel
agents would be charged to access certain content, in the U.S.
market.
Technology
Editor:
Dennis
Schaal
Phone: (201) 902-1904
[email protected]
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