Travel Weeklys Technology E-letter: Oct. 20, 2004

PCS AND MAINFRAMES: The rivalry continues, although most techies would concede that PCs leapfrogged ahead of mainframes years ago. At any rate, IBM revealed that it will give a makeover to its Transaction Processing Facility [TPF] program, which is the heart and soul of legacy GDS reservations processing in mainframes. IBM and its clients recognized that a more open-standards system was needed to enable better connections between the computing systems of TPF users -- including airlines, hotels, rental car companies and travel agents, an IBM spokesperson said. New versions of TPF, according to IBM, will work with programmers using Linux and will enable developers to create new res systems and applications related to fares and pricing.

TRAVELOCITY will become the exclusive travel provider for AARP. Travelocity and AARP in the spring expect to launch AARP Passport Powered by Travelocity, a co-branded site where AARPs 35 million members can book the online agencys full selection of offerings, from cruises and tours, to packages, hotels and airline tickets. AARP members also will be able to phone Travelocity for reservations. In reaching the partnership, Travelocity becomes AARPs exclusive travel provider. When purchasing travel today through the AARP Web site at www.aarp.org, members must link to supplier Web sites or phone them to access travel discounts.

GALILEO secured a Web-fare deal with Air Canada that differs from the agreement that Sabre cut with the airline in the summer. One clear difference is that Sabres distribution agreement applies to agents in Canada only, while Galileos is for its subscribers worldwide. Regarding the comparative costs to agents, that remains to be seen. In exchange for giving Galileo agencies worldwide access to all its published fares, Air Canada gets a reduced booking fee in an amended four-year distribution agreement. The agreement, which was to be implemented Oct. 15, also gives all Galileo agencies access to Tango, Fun and Latitude fares. In Sabres Air Canada program, if agencies choose to participate, they lose $0.50 in incentive payments from Sabre per segment. Sabre had an initial period, though, when there was no incentive loss. Galileos press statement unveiling the Air Canada agreement states: For the first 90 days, there will be no added booking fees or opt-in requirements for Galileo subscribers to receive access to Air Canada content. A Galileo spokeswoman said the GDS company will evaluate the programs progress and determine if any changes are called for. Our goal is not to charge them [agencies] and to bring Air Canada bookings back into Galileo, the spokeswoman said, adding it is too early to comment on whether there will be changes to the program or not.

CENDANT SUBSIDIARY WIZCOM INTERNATIONAL now enables hotels, if they opt into the program, to display their total prices, including a breakdown of room rates and mandatory charges, in Sabre and Amadeus. Wizcom serves as a switch -- primarily for hotels and car-rental companies -- to the GDSs and Internet travel sellers. WizCom signed on representation company Supranational Hotels for WizComs total pricing solution. The technology enables hotels to send total pricing information, including taxes and mandatory service charges, from the hotels central reservations systems to the GDSs, where travel agencies can view it for more accurate pricing information. WizCom said it is developing integration for total pricing in Galileo and Worldspan, and it will be introduced soon.

TRAVELZOO, the online advertising vehicle for suppliers and agencies, increased its net profit in the third quarter 240% over the same period last year and notched its 25th consecutive quarter of revenue growth. Travelzoo, the only public company among the screen-scrapers and aggregators that make up the evolving meta-search or comparative shopping sector, gets all of its revenue from online advertising. Elizabeth Rose, Travelzoos senior vice president of strategy, said its growth in revenue [$9.5 million in the third quarter versus almost $4.8 million a year earlier] was driven by an increased number of advertisers -- 317 versus 206 -- and increased advertising rates. The companys sequential quarterly revenue grew 32% in the third quarter, from $7.2 million in the second quarter. Rose attributed much of the sequential increase to the launch of SuperSearch, where companies like Priceline, CheapTickets, Hotwire, 1800 CheapSeats, American, Delta and Pleasant Holidays pay Travelzoo on a cost-per-click basis when consumers opt to use their search engines, which Travelzoo displays.  Travelzoos net profit in the third quarter was $2.1 million, a 240% increase. The companys pre-tax profit margin was 37.4%.

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