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 Lastminute.com,
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 Kayak.com, 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 Kayak.com 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 BudgetTravelOnline.com 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.