NEW YORK -- Travelocity.com and Preview Travel announced the
formation of a marketing alliance with Priceline.com to
sell air tickets.
Through Web site links, Travelocity and Preview Travel members
will be able to name their own air ticket prices through Priceline,
whose customers will have access to the retail fares on the other
two sites, the companies said.
The alliance provides that the services will "generate
incremental revenue each time they facilitate the sale of each
others' products under certain conditions," the announcement
said.
Terrell Jones, president of Travelocity, said that by offering
convenient access to complementary styles of buying air tickets,
the Web travel services can boost their ratios of
bookers-to-lookers.
The name-your-own price crowd "is a part of the market we're not
serving," Jones said. "There may be a percentage of people we don't
satisfy who might be satisfied in a Priceline environment."
Daniel H. Schulman, Priceline president and chief operating
officer, said, "In the past, if you wanted the best travel deal it
meant surfing from site to site spending precious time.
"This alliance will make it possible to go to our own sites or
many of the nation's largest search engines, Internet service
providers and on-line services to buy travel products at the price
you want. This convenience is what the Internet was intended to
deliver. Now it will."
None of the three Web services has turned a profit. As reported,
Travelocity and Preview, which booked combined sales of $900
million in the first nine months of 1999, plan to merge next year
into a new Travelocity.
Their archrival, Expedia.com, already has a name-your-price
service for hotel rooms but is being sued by Priceline over it.
Travelocity, Preview and Priceline said their alliance will
leverage a combined user base of more than 20 million travelers.
Priceline claims to sell 2% of all leisure tickets sold in the
U.S.]
"Air is most of what all of us sell," Travelocity's Jones
said.
As to how much overlap there is in the customer base of the
three Web travel services, he said, "We don't know," but said he
believes Travelocity and Preview satisfy different groups of people
than Priceline.
The plans for the agreement are contained in a memorandum of
understanding, and the alliance will be finalized "promptly,"
according to the companies.
Jones said the alliance does not require antitrust
clearance.