ome of lodging's biggest brand names
have been looking at the idea of an Internet joint venture for two
years now, and they've come up with something called HDS that's a
little like Orbitz.
In fact, the company has already signed an agreement with Orbitz
to make its hotel inventory available on the airline-owned
Unlike Orbitz, however, the hotel joint venture claims it will not
restrict the ability of its participants to offer lower rates to
other outlets, as Orbitz does.
Joe Humphry, interim chief of HDS, said he is prepared to
negotiate distribution deals with other Web sites, including agency
sites if they are sufficiently large -- which could mean
opportunities for mega-agencies and consortia.
But he also said, "What we're not prepared to do is work with
10,000 individual agents and send each one a commission check."
As an Internet distribution company, HDS has every reason to
think in those terms, but we hope nobody confuses that kind of
thinking with the retail marketing strategies of its individual
An apparent goal of HDS is to bypass CRS systems and provide
Internet sites with direct connections to hotel reservations
systems. Let's not bypass travel agents in the process. We believe
it is in the best interests of the hotels to stay connected with
travel agents any way they can.
• • •
ravelocity's aspiration to be a
tour packager and Disney wholesaler is pretty big news. Expedia's
intention to acquire Classic Custom Vacations was pretty big news,
You can read into these events many things, but one revelation
keeps reminding us that the worlds of online travel and offline
travel may not be so very far apart after all. The two online
giants are seeking to increase their margins, just like everybody
Buried in Expedia's recent earnings report was the disclosure
that Classic "sold approximately $300 million in vacation packages
to travel agents in 2001." Expedia, of course, does 10 times that
volume in a year, but the online game isn't just about volume
Travelocity and Expedia figured out a while ago that retailing
travel on the Web is no get-rich scheme. Both of these behemoths
lost gobs of money doing it, which is why the public statements of
the Big Two have increasingly been peppered with words like cruise,
tour, customer service and merchant model.
Travelocity's average transaction in the fourth quarter was
$281, and two-thirds of its business was everybody's favorite
If you were a brick-and-mortar travel agent doing two-thirds air
with an average transaction of $281, you might be saying things
like cruise and tour, too.