WORLDSPAN'S AIRLINE OWNERS--Delta, Northwest and
American--completed the sale of the GDS company to Travel
Transaction Processing Corp., a firm newly formed by Citigroup
Venture Capital Equity and Teachers' Merchant Bank. The deal, which
was announced in March, is worth about $1 billion. However,
Worldspan's new owners are paying about 75% of the sale price in
cash. Delta, which owned 40% of Worldspan, said it received $285
million in cash, $125 million in credits for Worldspan services
over nine years and a $45 million subordinated promissory note that
matures in 2012. Northwest, which had a 34% stake in the GDS firm,
said it received $280 million in cash, in addition to credits for
future services. American said it received $180 million in cash and
a $39 million promissory note for its 26% stake in Worldspan.
American had acquired its stake in Worldspan as part of its 2001
purchase of TWA's assets. Madrid-based Amadeus is now the only
airline-owned GDS.
CENDANT AND STARWOOD struck a deal in which the
hotel chain will distribute preferred rates and inventory through
Cendant channels, including Galileo and Cheap Tickets. The
multiyear agreement encompasses all Starwood brands--including
Sheraton and Westin. Cendant said these Starwood preferred rates
will gradually become available to travel sellers and consumers
over the next four to six weeks. Michael McCormick, senior
vp-hospitality and leisure for Cendant's distribution services
division, said Starwood is providing a mix of published and net
rates. Cendant businesses Cheap Tickets, Lodging.com and Neat
Group--whose technology packages net hotel rates with air and car
components-- will have access to net rates from Starwood, said
McCormick.
TRAVELOCITY, trying to keep pace with rival
Expedia, launched its own dynamic packaging tool, TotalTrip. The
technology enables consumers to book air and hotel components
together and allows Travelocity to conceal its markup. The
Sabre-owned company said it will add a car component later.
Travelocity said it had been using a third-party packaging
tool--from Contour--before implementing TotalTrip. Expedia launched
its own dynamic packaging tool last year and has dramatically
increased its sales of vacation packages. TotalTrip features
airline seat maps, the ability to choose a specific room type
(smoking or non-smoking, for example) and the option to book the
hotel or airline first.
ORBITZ LAUNCHED Orbitz Meeting Services, which
will be marketed to corporations already using Orbitz for Business,
the company's online corporate travel service. Orbitz said the new
meetings service offers pricing up to 25% lower than "standard
marketplace fees." Orbitz Meeting Services is available through a
partnership with David Green Interactive, a subsidiary of the David
Green Organization, a Chicago-headquartered provider of meetings
services. Unlike booking travel on Orbitz, the new meetings service
is not a do-it-yourself endeavor. David Green Interactive performs
all services, including site research, pre-event planning,
registration/housing and cost tracking.
TRADITIONAL TRAVEL AGENCIES will lose
significant cruise sales to supplier-direct initiatives and online
agencies in the next three years, according to a white paper
published by Credit Suisse First Boston for investors. CSFB
forecasts that traditional agencies' share of the cruise market
will shrink from 90% to 60% by 2006, while supplier-direct sales
(Web and phone) will reach 25% by that time. CSFB projects online
agencies will be selling 15% of cruises by 2006. In its thesis,
titled "Changing the Channel: A White Paper on Shifting Cruise
Industry Dynamics," CSFB said traditional agencies "have served
more as a transaction-processing function than a retail sales
force." CSFB suggested agencies should be performing better
considering cruising's high satisfaction level among consumers.