endant's new strategy to offer
automation and travel agency services directly to corporations rang
a familiar chord for many agents -- the supplier as competitor.
And the tune is not necessarily a welcome one.
"We're not thrilled with the idea," said Rob Turk, executive
vice president of Professional Travel in Cleveland. "We're a fairly
large subscriber of Galileo, and we license the Travelport
[self-booking tool].
"Do I want to put my clients' information into Cendant's hands
when Cendant now is competing against me?"
Before Cendant announced last month its intention to launch a
full-service corporate agency, Turk said he had "surface
discussions" with Cendant about using a low-cost fulfillment center
for Travelport bookings, which Cendant plans to open by
first-quarter 2004.
Because Cendant now is a competitor, Turk said he is more wary.
"You have to view Cendant as a travel entity that is a partner as
well as a competitor, just like the airlines," he said.
Global Travel in Boise, Idaho, isn't as worried about being a
customer and competitor of Cendant, said executive vice president
and general manager Cindi Michalski.
She said competing with and buying services from the same
company is "nothing new."
Furthermore, Michalski said she's not overly concerned because
Cendant informed Global Travel that it will pursue companies with
travel budgets over $8 million. Global Travel's niche is
corporations that spend less than $5 million, she said.
Jim Pekins, president of Gateway Travel Management in
Pittsburgh, didn't get that kind of assurance from Cendant. He said
he found it "bothersome" that Cendant didn't inform Gateway it was
entering the travel management business.
Pekins said Cendant's pursuit of corporations "certainly raises
a red flag."
"We've got two-and-a-half years left on our Galileo contract,"
he said. "We could [go to another GDS vendor], depending on how
things play out."
But Pekins said he understands why Cendant wants to pursue
corporations directly.
"They're fighting for survival, just like everyone," he said,
adding that, "I think Cendant is playing catch-up for the most
part," compared with Expedia Corporate Travel and Orbitz for
Business.
"It doesn't seem like Galileo has been as successful with its
self-booking tool [Travelport] as it had hoped," Pekins said.
Even though Gateway is a Galileo subscriber, the agency does not
market Travelport to clients. Gateway offers GetThere -- which is
owned by Galileo's rival, Sabre.
Gateway isn't the only Galileo-wired agency in that situation,
which likely is a factor in why Cendant is making a bigger push to
market directly to corporations.
"There's only so much business out there and everyone's fighting
for it," said John Lewis, president and CEO of Travel Management
Partners in Raleigh, N.C. "I have no qualms with competing with
Cendant.
"Cendant put a lot of money in Travelport. Going directly to
corporations is a natural step that Cendant had to take. If I was
CEO of Cendant, I would have made the same decision."
To contact reporter Jerry Limone, send e-mail to [email protected].