Travel Weeklys Technology E-letter: Aug. 25, 2004

INTERCONTINENTAL HOTELS GROUP took its first action to enforce an online distribution standard unveiled in April, vowing to cease selling all inventory, whether merchant or agency, through Expedia and sister company in 30 to 90 days. At the same time, InterContinental, which has InterContinental, Holiday Inn and Holiday Inn Express among the brands in its portfolio, embraced and certified Travelocity as an online agency whose business practices mesh with its core values. The hotel chain gets about 2% of its room revenue from online distributors and about half of that, about $100 million annually, comes from Expedia and Until now, InterContinental had an umbrella contract with Expedia, and InterContinental franchisees were free to negotiate their own merchant agreements with the online agency. That kind of freelancing led to widespread discounting and a lack of pricing control for InterContinental. The chain intends to kill these side agreements.

INTERCONTINENTAL CRITICIZED EXPEDIA for bundling service fees and taxes [a practice that disguises the distributors margins]; designating properties as sold out when only Expedias wholesale inventory is depleted and properties can still be booked through InterContinental; costly, manual and inefficient processes for availability, reservations and settlement. InterContinental said Travelocity exhibited much more flexibility and its business practices mesh well with the chains core values. As InterContinental continues to evaluate third-party Web distributors, it also certified Priceline and said the hotel chain will also continue selling through Hotwire and Mark Travel Web sites.

SABRE, as expected, introduced its Hotel Spotlight program, which enables hotels to pay for placement   at or near the top of hotel availability displays. In addition, participating hotels -- and they are not identified as advertisers at this stage -- pledge to make available to Sabre all rates, including Internet rates. Launch partners include Fairmont Hotels & Resorts, Hyatt Hotels & Resorts and Melrose Hotels, Sabre said. More than 1,000 properties, including several independents, are available in Hotel Spotlight. In the future, Sabre added, travel agents will be able identify and search for Hotel Spotlight participants so agents can book their Web rates.

TQ3NAVIGANT will use a single back-office system, Amadeus Global MAX, for all its business divisions. TQ3Navigant began using the Amadeus product for some business units five years ago. One reason for the consolidation is TQ3Navigants acquisition of SatoTravel, with its large government and U.S. Armed Services business and their requirements for fast, accurate, flexible and detailed reporting, TQ3 Navigant said. Global MAX is robust and meets our expectations for handling large-scale enterprise applications, TQ3Navigant chief accounting officer John Coffman said in a statement. With our recent acquisition of SatoTravel, we expect to realize costs savings and productivity improvements by implementing Global MAX for that divisions operations. Global MAX handles large transaction volumes and its functions include quality control, credit card reconciliation, reporting, customer statements and commission tracking.  

TRAVELOCITY will pay some $33 million to acquire most of the 50% of Travelocity Europe, a joint venture with Otto Freizeit und Turistik (OFT), that Travelocity didnt already own. This includes operations in the U.K., France, Norway, Sweden, Denmark and the sole rights between the partners to new operations in any other European country, except Germany. The acquisition, which is subject to regulatory approvals, does not impact the Travelocity/OFT joint venture in Germany, which takes in,, Travel Overland and With the transaction, Travelocity plans to expand its dynamic packaging and merchant hotel programs across its European businesses. Travelocity Europes businesses include in the U.K.; and Box Office in Sweden; and Arte Udland in Denmark; and Ticket Service in Norway; and Boomerang in France.

AMERICAN EXPRESS BUSINESS TRAVEL said the first half of the year has been pretty good, bringing its newly named corporate travel unit some $1 billion in new business. Among Amexs new clients are CUNA Mutual Group (U.S.); EADS (Europe), KPMG (Brazil), Real Foundations (U.S.), Ridley (Australia), Sara Lee DE (Europe) and Tuesday Morning (U.S.). Without providing specifics, Amex said it continues to best online travel agencies in the battle for new contracts, picking up 50 new clients.


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