INTERCONTINENTAL HOTELS GROUP has a very
special relationship with Travelocity. TravelWeekly.com learned
that Travelocity charges consumers lower service fees when they
book merchant inventory from IHG brands than for any other chain or
property. It seems that IHG demanded that third-party Web sites
break out their taxes and service fees for consumers -- but only if
those service fees push the total charge to consumers higher than
booking a room on the IHG Web site. So, Travelocity still takes a
service fee on IHG bookings and bundles the disclosure in taxes and
fees, but it charges consumers less in service fees for IHG
bookings than it does for non-IHG properties. That arrangement is
fine with IHG, which recently certified another distributor,
Travelweb, now wholly owned by Priceline. Priceline and Travelweb
are considering how to disclose their taxes and fees, with
IHG-endorsed options including breaking out the charges in a
confirmation email or a pop-up at the time of booking. Travelocity,
meanwhile, doesnt plan to market the idea to consumers that when
the room rates are equal, they will pay less for IHG brands on Travelocity.com.
TIERED PRICING
TWEAKS: Now that Amadeus re-upped and introduced a tiered
pricing formula for airlines in 2005, following the launch of its
first Value-Based Pricing plan in 2004, Sabre, Galileo and
Worldspan will soon introduce their own plans. One analyst, Jerry
Galant of Huberman Financial, believes Amadeus competitors
eventually will settle on modified forms of tiered pricing. Galant,
who formerly was a finance director at Sabre, also believes that
GDSs may package tiered pricing with preferential screen displays.
For example, a GDS might display Lufthansa flights above KLM
flights on destinations where they compete like Chicago to Istanbul
via Frankfurt for Lufthansa, or Amsterdam via KLM, Galant said. Who
said GDS booking fees arent interesting?
REGARDING
AMADEUS new plan, the Madrid-headquartered companys basic
formula pegs the airline booking fee to the point of sale, and
whether flights are short-haul or long-haul, international or
domestic. For the still-regulated markets of Europe, the Middle
East and Africa, Amadeus added a Web fare program called the Full
Content Option. However, Amadeus -- the global leading GDS in
revenue and bookings in 2003 -- declined to offer a general
low-fare distribution program for airlines in North America.
Instead, Amadeus, which owns Vacation.com, negotiated individual
full-content pacts with Continental, Northwest, US Airways, Delta
and United. An agreement with American is said to be
close.
JETBLUE said it will pull out of Sabre at
the end of this year, citing the costs of the GDS, the early
success of the airlines new corporate booking tool and the growing
number of alternatives for distribution. The decision comes even as
another low-cost carrier, Independence Air, took the opposite
stance. Independence just joined Sabre -- the third GDS it has
joined since Nov. 1 -- after altering its original plan to rely
solely on direct bookings.
SABRE, meanwhile, agreed to acquire SynXis,
a hotel distributor and technology company, for $40 million in
cash. The transaction, which is expected to close in first-quarter
2005, gives Sabre a presence throughout the hotel distribution
chain, from point-of-sale to travel agents and consumers. McLean,
Va.-headquartered SynXis, which will retain its brand, has
relationships with 6,000 properties, covering reservation
management, technology and distribution services. SynXis
distributes through Sabre and other GDSs, as well as more than
1,200 Web sites, Sabre said.
ONE HOTEL
BUSINESS that Sabre will not pursue any longer is its
merchant hotel program, Sabre Exclusives, which the company quietly
dropped at the end of October. The merchant hotel program, which
gave Sabre access to net rates for agents, never gained traction
because agents were wary of prepayment and other restrictions, said
Scott Brodows, vice president of car and hotel distribution. At a
panel discussion at the Hotel Electronic Distribution Network
Association conference in Los Angeles, Brodows mused, Why is it
that customers will accept prepayment for air and not
hotels?