Travel Weeklys Technology E-letter: March 8, 2006

WORLDSPANS revenue and transactions from electronic distribution in the fourth quarter declined for the first time in the companys history, and volume from traditional agencies fell as well. Those trends, along with an additional interest expense of $6.6 million related to the companys refinancing in February 2005, contributed to a fourth-quarter net loss of $3.2 million. With the ending of relationships with European online agencies ebookers, acquired by Cendant, and, purchased by Travelocity, and lower volumes from Orbitz, Worldspans revenue from electronic distribution fell 2% to $189.7 million in the fourth quarter. Rakesh Gangwal, Worldspans chairman, president and CEO, said Orbitz contributed to the revenue and volume decline because the transactions it funneled through Worldspan in 2005 were just higher than the minimum contract level. That contrasted with previous years, when Orbitzs volumes were significantly higher, he said. Meanwhile, Cendant declined to say whether its Galileo unit was picking up these bookings from sister company Orbitz.


THE TRENDS in Worldspans electronic distribution business dont bode well. Priceline, which accounts for 9% to 10% of Worldspans volumes, signed an agreement with Sabre to diversify its GDS relationships. And Expedia, which also uses Worldspans GDS services, has agreements to branch out by using Sabre and Amadeus, if Expedia chooses to throw the implementation switch. In the fourth quarter, Worldspans transaction volumes from online agencies declined 4% to 22.4 million, and bookings from traditional agencies fell 5% to 20.2 million. However, Gangwal characterized 2005 as an excellent year and labeled the fourth quarter good. He pointed to an increase in operating income of 108% to $10.5 million in the fourth quarter, and a rise of 31% to $116.1 million in 2005. For 2005, Worldspans net income declined 102% to a loss of $675,000 on a 1% revenue increase to $954 million. The 2005 loss, which followed a profit of $41.9 million in 2004, largely was tied to a $55.6 million charge related to Worldspans 2005 refinancing.


TRAVELOCITY rolled out an alert system to tip off clients to such issues as closed hotel swimming pools and airports experiencing extensive delays. The online agency, which marked a decade in business this month, kicked off the program in January but began publicizing it Feb. 28. From mid-January to mid-February, Travelocity e-mailed more than 1,000 customers before their trips to advise them of hotel pool closings, the agency said. Travelocity spokesman Joel Frey noted that these communications were not e-mail blasts but individual e-mails to consumers with reservations at the affected properties. Orbitz pioneered care alerts in 2003 and transmitted more than 25 million of them in 2005. They were delivered to customers cell phones, desktops, pagers, Blackberrys and other devices, informing travelers of gate changes, flight delays and cancellations, weather issues and other travel issues, including New Yorks transit strike.


KAYAK figured out a way to cash in on the community trend, including user-generated reviews of destinations. Kayak users can click on the Fare Buzz tab on, create or view a review of a destination penned by a consumer or third-party Web site and then enter a departure airport into the Kayak Buzz toolbar to access fares to the selected destination. For example, selecting Best Nude Beaches under Most Popular Trip Ideas on pulls up a TravelChannel review of nude beaches, and a list of sample air fares to clothing-optional venues in such places as Ocho Rios and Little Beach on Maui. When consumers enter a departure airport in the Kayak Buzz toolbar, they will access the best fares to these destinations and, after several steps, can book the flights on an airline or agency Web site. Kayak views this Trip Ideas functionality as an improvement over static lists or reviews, saying it produces real-time fares and the ability to book them for each destination. Kayak imports destination information for Trip Ideas from Travel Channel, Travel & Leisure, Golf Digest, Lonely Planet and and gets referral fees if consumers book the flights on airline or agency Web sites.


CARLSON WAGONLIT TRAVEL signed a reseller agreement with Sabres GetThere to offer the online booking tool to clients in North America, Europe, the Asia-Pacific region and Latin America. CWT has supported clients who used GetThere since 1998 but now will offer it as an additional CWT service offering. The GetThere tool will supplement the travel management companys proprietary online booking tool, CWT Horizon, which is available in North America. CWT supports other booking tools, as well, including KDS, Arnold, Cliqbook, RESX, and e-Travel.


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