By David Cogswell
GARDEN CITY, N.Y. -- In a move the parties called "redefining
leisure travel distribution," Amadeus acquired Vacation.com for
$57.3 million in cash, plus warrants to purchase 1.8 million Class
A shares in Amadeus. In addition, Amadeus will assume $27.7 million
of Vacation.com's debt.
It is the first time a major CRS has purchased a retail agency
consortium. With 8,400 members in the U.S. and Canada, Vacation.com
claims to be the largest consortium.
Calling the joining of retail agencies with Amadeus a "clicks
and mortar" design, David Jones, executive vice
president-commercial of Amadeus, said suppliers that have tried to
bypass agencies have failed in the attempt. "While Amadeus has
always been committed to the travel agent community, everyone who
has decided to bypass agents has come to the same conclusion:
Electronic distribution is not enough."
Jones said research by Forrester, Jupiter and others establishes
that consumers will want to consult with someone when they make a
purchase. The "new paradigm," he said, is that consumers will
"browse on line and purchase through agents."
Amadeus, the fourth-ranked GDS in North America, claims to be
the largest internationally based on number of travel agency
locations. Jones called the acquisition "a great opportunity for
investment" for Amadeus because Vacation.com is profitable.
In addition, it will build Amadeus' presence in the U.S. market
because it brings to Amadeus an additional 7,000 prospective
agencies who are not now subscribers.
McKinnnon said Vacation.com members who are not subscribers to
Amadeus will not have to convert, though he said the advantages of
doing so will eventually convince them to. "Agents will recognize
who their friends are and who is supporting them," he said.
For Vacation.com, the purchase will enable it to speed up
development of new technologies and will provide buying power and
marketing support. Vacation.com will continue to operate as a
separate entity with one exception: Its technology division will be
integrated with Amadeus'.
As part of the transaction, Tony McKinnon, chief executive
officer of Vacation.com, assumed the additional role of president
and chief executive officer of Amadeus' North American operations.
That job has been filled on an interim basis by Jones, who will now
return to Europe and resume his duties there.