ELECTRONIC RESERVATION DISTRIBUTION in today

1
ELECTRONIC RESERVATION DISTRIBUTIONin todays
Worldand where does it fit
What exactly is it?
2
EDS

• The EDS is composed of two major components
• The GDS or Global Distribution System. A means of
  electronic booking airlines seats, car hire hotel
  rooms and ship cruises only by Travel
  Professionals (mostly agents)
• The IDS or Internet Distribution System. A means
  of booking the above services by chanelling
  potential end user bookers (self bookers) via the
  existing GDS or directly through the Internet
  system.

3
Graphic overview of the EDS
Partners include AOL, Yahoo,Verizon, Delta,
100 Convention Bureaus, 40 Hotel Lodging
Assocsand 30 StateTourism Bureaus.
Direct Connect
Next Generation Seamless GDS Connectivity
INCLUDING Automatic Rate, Availability, and HOD
Content Updates and Distribution
Internet Distribution System(IDS) Connectivity
INCLUDING Rate, Availability, and Allotment
Updates and Distribution
Hosted Web Siteand Travel Portals INCLUDING
Internet Marketing
Call Center Reservation and Support Services
Integrated Single Databasewith Single Image
Inventory
ReservationDelivery viaXML Interface,Email or
Fax
Rates, Allotments and HOD Content via core
Extranet
ReservationDelivery via Emailor Fax
Rates, Allotments and HOD Content via core
Extranet
Hotels with epitome PMS
Hotels with 3rd Party PMS
Hotels without a PMS
4
Major TRAVEL DISTRIBUTION CompaniesWho owns who??
GDS Leisure Corporate Affiliate Travel Agency Time Share DSP
Galileo, WizCom Switch CheapTickets,Lodging.com,Orbitz Travelport,Orbitz for Business Lodging.com,Neat Group Thor Consortium RCI WizCom,Trust Intl,Shepherd Systems
Sabre Travelocity,Site59,Travelchannel Travelocity Business,GetThere Travelocity Partner,Travelocity,Site59,Nexion World Choice Travel None SynXis,Sabre Distribution Technologies
None (1) Expedia,Hotels.com,Hotwire,Anyway.com,TV Travel Shop Expedia Corporate,Metropolitan Travel,Egencia WWTE,Expedia,Hotels.com Classic Custom Vacations Interval Intl Newtrade Technologies
Amadeus OneTravel.com,Eviaggi.com,Opodo e-Travel OneTravel.com Vacation.com None None
Pegasus Switch HotelBook.com, TravelWeb.com None Online Distribution Database (ODD) Commission Processing Services None Utell, Unirez, Pegasus Solutions

• Primary GDS Partners are WorldSpan and Sabre
• SOURCE PhoCusWright Inc.

5
Leading PLAYERS in the Game
GDS Switch Central Reservation Systems, CROsand Representation Firms Central Reservation Systems, CROsand Representation Firms Internet Sites Others in Play
Amadeus Pegasus Hotel Information Systems Sceptre Expedia.com Datalex
Galileo WizCom Chouinard Myhre Supranational GetThere.com Google
Sabre Columbus Reservations SynXis Hotels.com HBS
WorldSpan GenaRes TravelCLICK Hotwire.com Lanyon
Historic Hotels TRUST International Orbitz.com MICROS Fidelio
iHotelier UniRes PlacesToStay.com Newmarket
Innlinks Utell Priceline.com Ramesys
InnPoints Vantis Site59.com Revelex
Kerry Hotels WORLD Hotels TravelWeb.com VAS
Leading Hotels Travelocity.com Yahoo
LUXE Hotels Travelscape.com
Pegasus Trip.com
Preferred Hotels WorldRes.com
Representation company only which utilizes a
3rd party CRS
6
FACTS about Electronic Distribution

• In 2005, approximately 32 million US households
  used the Web to buy leisure travel, for which
  they will spend approximately 64 billion.
• By 2009, this will reach 46.4 million US
  households, spending nearly 111 billion.
  Vacation packages, cruises, and hotels are poised
  for the greatest growth.

SOURCE Forresters Consumer Technographics
North American Travel Online Study
7
Online Travelers PROFILE

• The typical Booker has been buying online for 3.3
  years, and while they buy 60 of their trips
  online, that still leaves a solid chunk bought
  offline.
• Middle aged adults, almost evenly divided among
  men and women.
• Well educated, upper-middle income earners the
  average household income of 80,361/year.
• They travel regularly, spending 3,484/year on
  leisure travel.
• They stay at hotels 2.8 times/year for leisure
  trips.

8
FACTS about Online Travelers

• Online long-haul leisure travelers online
  leisure travelers who have taken a trip outside
  the continentalUS in the past 12 months
  represent 25 of online leisure travelers. These
  travelers earn more, travelmore often, and spend
  more than other online leisure travelers. They
  also view the Web as an integralpart of their
  travel planning and purchasing process. Web
  agencies top the list of where onlinelong-haul
  travelers research and buy leisure travel, but
  these travelers will continue to rely on both
  onlineand offline sources and will continue to
  reveal the nuances when it comes to price.

9
FACTS about Online Travelers

• Vacation home (timeshare) travelers leisure
  travelers who own or consistently rent a vacation
  home represent more than 8 of online leisure
  travelers. This group is older and wealthier than
  travelers without vacation homes, but despite
  their age, they show a surprising proclivity for
  online booking 74 of vacation home travelers
  book travel online. Travel companies should not
  ignore this group, because despite having a fixed
  leisure destination, they actually take other
  types of trips more frequently than other leisure
  travelers.

10
FACTS about Online Travelers

• Y generation online leisure travelers young
  adults age 18 to 24 are influencing massive
  changes in how travel is distributed, marketed
  and sold. Thats because this is the first true
  Web generation of travelers a group that, as
  a whole, ignores offline points of sale and has
  no brand loyalty. This group is more likely to
  fly than older travelers and to use alternative
  places to stay, such as home or condo rentals.
  To earn this sophisticated, active, yet cynical
  groups business, travel marketers must track
  travelers as they age over time, create or build
  up eventsto satisfy their thirst for appointment
  travel, and rethink their loyalty programs to
  bond with travelers beforethey start to think
  about brand loyalty.

11
UNDERSTANDING the Various Booking Optionsfor
Travelers
12
OPTION 1 The TELEPHONE
13
The TELEPHONE

1. Call Hotels Sales or Reservations Office Direct

14
The TELEPHONE

1. Call Hotels Sales or Reservations Office Direct
2. Call Hotels Central Reservations Office

15
The TELEPHONE

1. Call Hotels Sales or Reservations Office Direct
2. Call Hotels Central Reservations Office
3. Call Travel Agent

16
The TRAVEL AGENT
Approximately 185,000 Travel Agencies Worldwide
Representing over 800,000 Travel Agents
17
FACTS about Travel Agents

• Approximately 92 million hotel room nights were
  booked by Travel Agencies in 2005.
• Brick and Mortar Agencies generated 80.6 of all
  GDS bookings.
• 19.4 of all GDS bookings were through GDS
  powered Web sites.
• The average rate for room nights booked through
  Travel Agents was 31.2 higher than the average
  rate for room nights booked via the Internet.

SOURCE TravelCLICK eMonitor
18
TRAVEL AGENT Hotel Bookings - 2004
Room Nights Pct. Growth Avg. Daily Rate Pct. Growth
Travel Agent Component 92,172,342 5.7 132.13 6.6
Consumer Internet Component 22,209,367 10.6 100.73 10.2
Total GDS Pegasus Hotel e-Commerce 114,381,709 7.5 126.03 6.9
SOURCE TravelCLICK eMonitor
19
Performance by MARKET SEGMENT
Market Segment Room Nights Pct. Growth Avg. Daily Rate Pct. Growth
Luxury 2,513,475 15.9 310.64 7.0
Upscale 33,577,310 3.4 154.01 6.4
Mid-Scale 39,588,218 6.3 101.15 5.5
Budget 7,501,869 1.9 70.78 3.9
SOURCE TravelCLICK eMonitor
20
GLOBAL DISTRIBUTION SYSTEMS
Hotels
Rental Cars
Airlines
Cruises
21
GLOBAL DISTRIBUTION SYSTEMS Amadeus

• Founded in 1987 by Air France, Iberia, Lufthansa,
  and SAS, Amadeusis the youngest of the four GDS
  companies.
• Large European Representation.
• Comprehensive data network and database, among
  the largest oftheir kind in Europe, serve more
  than 57,000 travel agency locations and more than
  10,500 airline sales offices in some 200 markets
  worldwide. 400 airlines, 55,000 hotel properties,
  52 car rental companies, 9 cruise lines, 33
  railroads, and 229 tour operators.
• Provides access to approximately 58,000 hotels
  and 50 car rental companies serving some 24,000
  locations.
• Having acquired e-Travel, Inc. from Oracle
  Corporation in July of2001, Amadeus now has a
  new business unit dedicated to delivering
  solutions to e-commerce players worldwide.

22
GLOBAL DISTRIBUTION SYSTEMS Galileo

• Galileo International was founded in 1993 by 11
  major North American and European airlines.
• North America, Europe, the Middle East, Africa,
  and the Asia/Pacific region.
• October of 2001, Cendant Corporation acquired
  Galileo International for approximately 1.8
  billion in common stock and cash.
• Serves travel agencies at approximately 45,000
  locations.
• 500 airlines, 227 hotel companies, 33 car rental
  companiesand 368 tour operators.

23
GLOBAL DISTRIBUTION SYSTEMS Sabre

• Sabre was founded in the mid 1960s by 4 major
  North American Airlines... most predominantly
  American Airlines.
• Represented in 45 countries, is a leading
  provider of technology for the travel industry.
• In July of 1996, Sabre became a separate legal
  entity of AMR (parent company of American
  Airlines).
• Sabre connects more than 60,000 travel agency
  locations around the world.
• 400 airlines, 55,000 hotel properties, 52 car
  rental companies,9 cruise lines, 33 railroads,
  and 229 tour operators.

24
GLOBAL DISTRIBUTION SYSTEMS WorldSpan

• Founded February 7, 1990, Worldspan was
  originally owned by affiliates of Delta Air
  Lines, Inc., Northwest Airlines, and TWA.
• Worldspan has successfully developed the
  strategies, solutions, and services to ensure the
  companys long-term success in the new web-based
  world of travel distribution.
• Datalex is a large partner, thus enhancing its
  web direction.
• Worldspan currently serves 20,021 travel agencies
  in nearly 90 countries and territories.
• Worldspan connects approximately 421 airlines,
  210 hotel companies, 40 car rental companies, 39
  tour and vacation operators, and 44 special
  travel service suppliers.

25
New GDS provider Luftonav

• In March Lufthansa announced that they will join
  G2 switchworks and ITA software as a preferred
  supplier to provide an alternative access
  platform to Star Alliance airlines.
• These airlines include
• Air Canada, Air New Zealand, ANA, Austrian, bmi,
  LOT
• Lufthansa, SAS, Singapore, TAP, Thai, United, US
  Air, Varig
• Reading through the press announcement in small
  print you can see that this is a joint
  development by Navigant (owns TQ3), Amex and
  Carlson.
• More choice in fact means more global players
  having a piece of the action across all their
  spheres of corporate influence

26
GDS Travel Agency Installations by REGION
27
TRAVEL AGENT Reservations
SWITCH (WizCom orPegasus)
Travel Agency
CRS
CRS
Hotels, Resorts and Inns
28
GDS SWITCH COMPANIES
PURPOSE To pass the data between the GDSs and
the Central Reservation Systems (and Offices) and
to reduce the costs of individual connections to
each GDS. These switches levy approx. 1 pre
transaction.

• WizComInternational
• Began in 1987 to provide GDSand reservation
  services
• Subsidiary of Cendant

• PegasusSolutions
• Founded in 1989 by16 hotel companies and offers
  the UltraSwitch communication link
• Originally known as THISCO

29
TRAVEL AGENT Reservations
SWITCH (WizCom orPegasus)
Travel Agency
CRS
CRS
Hotels, Resorts and Inns
30
GDS CONNECTIVITY Types
Type B Processing
Why it matters to a TA

• Type B (or teletype) connections work via ARInc
  or SITA data communications lines and can be
  compared to sending a fax -- you know your
  message has been received but have to wait for a
  response. Type B connectivity allows for greater
  speed and convenience for travel agents over
  manual processing. With Type B links, the
  confirmation number is updated in the PNR and
  placed in the travel agents queue generally
  within minutes to a few hours after completing
  the reservation depending on the hotel companys
  operational procedures.

• The travel agent has to complete the hotel
  booking request, end the transaction and
  re-display the PNR (pseudo city code) to
  determine if the reservation has been confirmed.
  Type B communication is used as a fall-back
  procedure for hotel companies using Type A
  processing when a Type A link is down for
  maintenance, for example. On occasion, every
  hotel company that uses Type A links will revert
  to Type B. This explains why it is possible to
  receive confirmation numbers immediately during
  one transaction while for another atthe same
  hotel there is anlonger confirmationdelivery
  time.

31
GDS CONNECTIVITY Types
Type A Processing
Why it matters to a TA

• Type A connections use a dedicated telephone
  line and provide interactive confirmation
  processing. It can be compared to talking to
  someone on the telephone -- you send your message
  and receive a reply almost immediately without
  having to end the record.

• Type A connectivity works in real time. It
  provides an immediate response allowing travel
  agents to receive their hotel reservation
  confirmation number within about 7 seconds.
• Advantages of Type A Connectivity
• Confirmation speed about 7 seconds or less
• Interactive processing and error response

32
GDS CONNECTIVITY Types
Seamless Processing
Why it matters to a TA

• Seamless connectivity is an advanced connection
  for displaying interactive data. Reservation
  processing is still Type A, but the messaging
  standards are newer and more efficient.
  Additionally, interactive modifications and
  cancellations are usually included in this level
  of connectivity.

• Seamless connectivity allows much of the room
  description, rate, booking rules and availability
  data displayed to a travel agent through their
  GDS to be gathered directly from the hotel
  companys central reservation system.
• Advantages of seamless connectivity
• Viewing information drawn directly from CRS
• Confirmation speed
• Real-time information
• More information and moreaccurate information
• Information is less cryptic more user friendly
  language

33
GDS CONNECTIVITY Types
Next Generation Seamless
Why it matters to a TA

• Also known as NGS, this technology enhances
  and is built upon classic Seamless Connectivity
  to allow seamless data to be displayed on the
  multi-property, hotel list and availability
  displays.

• Next Generation Seamless products make the
  shopping displays in GDSs more accurate with
  real time seamless data and aids the selection
  process thus improving the first step in the
  shopping/booking process in GDS.

• Each GDS has its own name for their NGS Product
• Amadeus Dynamic Access
• Galileo Inside Shopper
• SABRE Direct Connect Shopper
• WorldSpan Integrated Source

34
ADVANTAGES of Next Generation Seamless
Connectivity

• Real-time information on the first hotel
  availability displays
• Alleviates misinformation between the multi-hotel
  availability displays and single hotel displays
• Saves time by making appropriate hotel selections
  from the multi-hotel availability display
• Saves time by manipulating the multi-hotel
  availability displays to users specific hotel
  requests/requirements

RESULTING in an average sales increase of 30
versus seamless connected CRS
35
TRAVEL AGENT Reservations
SWITCH (WizCom orPegasus)
Travel Agency
CRS
CRS
Hotels, Resorts and Inns
via Interface, EMail Communication or Fax
36
TOP 10 GDS Cities Worldwide
The top 10 worldwide destination markets in room
nights for GDS and Pegasus third-party powered
websites, in order, were
Room Nights Change ADR Change
New York 1,309,573 4.1 231.06 15.8
Los Angeles 1,070,862 3.2 139.28 7.4
San Francisco/Oakland/San Jose 968,082 2.7 142.61 6.1
Washington/Baltimore 965,632 3.1 156.63 9.6
Chicago 816,259 4.8 140.92 9.0
London 783,472 1.4 227.33 0.0
Dallas 579,312 8.3 104.11 4.5
Atlanta 542,328 2.9 109.80 6.2
Boston 499,296 4.8 156.08 3.2
Houston 417,368 5.2 109.42 4.3
SOURCE TravelCLICK 3Q2005
37
OPTION 2 The INTERNET
Over 15,000 Sites and Portals
38
WHY Leisure Travelers Bookat Their Favorite Sites

• The ease of shopping online makes it hard for
  travel companies to develop site loyalty just
  one in three US online leisure Bookers have a Web
  site they regularly use to buy their leisure
  travel. Nearly all Bookers with a favorite site
  use it because they have previously visited it,
  but the strength of familiarity isnt enough to
  sustainthe relationship low prices, immediate
  email confirmations, and ease of use also matter.
  These travelers are valuable, as they spend more
  and take more trips than Bookers without favorite
  sites. To win them, entice them with both quality
  and price Bookers witha favorite site are just
  as likely to indulge in travelas pick the lowest
  price.

39
The INTERNET

1. Brand Sites71.4 of Internet Bookings

40
WHY a Best Available Rate?

• Over the past two years, best available rates
  have become part of the travel industry
  landscape, primarily among hotels. Do they work?
  Yes, once Web travelers make sure theyre not
  just marketing fluff. In fact, more than 2 in 10
  US leisure travelers are fervent Best Rate
  supporters. Supporters are brand loyal but
  ironically prefer to buy from Web agency sites.
  Best Available Rate help suppliers keep existing
  market share and can be used to steal share from
  intermediaries. But Web agencies can also benefit
  from Best Available Rates by stealing business
  from other Web agencies rather than alienating
  suppliers.

41
The INTERNET

1. Brand Sites (71.4)
2. Retail Sites12.5 of Internet Bookingsalso
   referred to as Online Travel Agencies

42
The INTERNET

1. Brand Sites (71.4)
2. Retail Sites (12.5)
3. Merchant Sites8.6 of Internet Bookings

43
SHARE of Channel Bookings
Share of Internet Bookings Share of Channel Bookings Pct. Change over 2003
Merchant Sites 8.6 100.0 9.0
Expedia 3.0 35.4 5.0
Hotels.com 2.6 30.5 -15.8
Travelocity 1.7 19.2 109.3
Orbitz 0.8 9.4 -0.5
TravelWeb 0.3 4.0 24.5
Lodging.com 0.1 1.5 n/a
SOURCE TravelCLICK eTRAK
44
The INTERNET

1. Brand Sites (71.4)
2. Retail Sites (12.5)
3. Merchant Sites (8.4)
4. Opaque Sites 7.5 of Internet Bookings

45
SHARE of Channel Bookings
Share of Internet Bookings Share of Channel Bookings Pct. Change over 2003
Opaque Sites 7.5 100.0 16.0
Priceline 5.8 77.8 16.6
Hotwire 1.7 22.2 14.1
SOURCE TravelCLICK eTRAK
46
WHO gets WHAT from WHERE and HOW?
Site Source
Travelocity.com Sabre
Expedia.com WorldSpan/Pegasus/Own Extranet/PMS I-face
Orbitz.com Pegasus
CheapTickets.com Galileo
Hotwire.com Pegasus
PlacesToStay.com WorldRes
Hotels.com Fax/Own Extranet/PMS I-face
Priceline.com Worldspan
47
WHO gets WHAT from WHERE and HOW?
Site Middleman Source
Yahoo.com Travelocity Sabre
AOL.com Travelocity Sabre
Earthlink.com Expedia Worldspan/Own Extranet/PMS I-face
MSN.com Expedia Worldspan/Own Extranet/PMS I-face
Lycos.com Orbitz Pegasus
AltaVista.com Orbitz Pegasus
Excite.com Expedia Pegasus
Passkey.com Hotel Direct
GetThere.com Sabre
48
RESERVATION SOURCESfor Major Hotel Brands CROs
2004
CRO Hotel Bookings Pct. Of 2004 Res Pct. Of 2003 Res Pct. Change
Brand Websites 21.9 18.1 21.5
Retail Websites 3.8 4.3 11.1
Merchant Websites 2.6 2.2 22.3
Opaque Websites 2.3 2.6 12.3
TOTAL INTERNET 30.7 27.1 13.1
GDS Travel Agent 35.3 36.5 3.3
TOTAL ELECTRONIC 66.0 63.6 3.7
Voice 34.0 36.4 6.5
TOTAL FOR CROs 100.0 100.0
SOURCE TravelCLICK eTRAK
49
RESERVATION SOURCES for Total Hotel Bookings
CRO Hotel Bookings Pct. Of CRO Res Pct. Of Total Res
Hotel Website 21.9 9.1
Retail Websites 3.8 1.8
Merchant Websites 2.6 1.2
Opaque Websites 2.3 1.1
TOTAL INTERNET 30.7 13.2
GDS Travel Agent 35.3 16.8
TOTAL ELECTRONIC 66.0 30.0
Voice 34.0 17.5
TOTAL FOR CROs 100.0 47.5
Hotel Direct -- 52.5
TOTAL HOTEL BOOKINGS -- 100.0
50
Electronic Distribution ANY HOTEL Can Play
Sample RATE STRUCTURE
Rate Type Channel Sell Priceper night DSP Fee(per res) TravelAgent Merchant Net Revenue ADR(net)
Retail (unrestricted) Direct Call 100 N/A N/A N/A 250 100
Retail (unrestricted) GDS/Travel Agent 120 10 (avg) 30 N/A 260 104
Retail (unrestricted) Own Website 85 5 (avg) N/A N/A 208 83
Retail (restricted prepay) Own Website 75 5 (avg) N/A N/A 183 73
Merchant Net 25 markup(restricted 25 cancel fee) Third Party Internet 98 10 (avg) N/A 50 185 74
Merchant Net 18 markup (restricted 25 cancel fee) Third Party Internet 87 10 (avg) N/A 30 178 71
Opaque part of package Own Website 75(factor) 5 (avg) N/A N/A 183 73
Opaque part of package or brand opaque Third Party Internet 75 (factor) 10 (avg) N/A N/A 178 71
Based on 2.5 average length of stay
51
Major TRAVEL DISTRIBUTION CompaniesWho owns who??
GDS Leisure Corporate Affiliate Travel Agency Time Share DSP
Galileo, WizCom Switch CheapTickets,Lodging.com,Orbitz Travelport,Orbitz for Business Lodging.com,Neat Group Thor Consortium RCI WizCom,Trust Intl,Shepherd Systems
Sabre Travelocity,Site59,Travelchannel Travelocity Business,GetThere Travelocity Partner,Travelocity,Site59,Nexion World Choice Travel None SynXis,Sabre Distribution Technologies
None (1) Expedia,Hotels.com,Hotwire,Anyway.com,TV Travel Shop Expedia Corporate,Metropolitan Travel,Egencia WWTE,Expedia,Hotels.com Classic Custom Vacations Interval Intl Newtrade Technologies
Amadeus OneTravel.com,Eviaggi.com,Opodo e-Travel OneTravel.com Vacation.com None None
Pegasus Switch HotelBook.com, TravelWeb.com None Online Distribution Database (ODD) Commission Processing Services None Utell, Unirez, Pegasus Solutions

• Primary GDS Partners are WorldSpan and Sabre
• SOURCE PhoCusWright Inc.

52
Graphic overview of the EDS
Partners include AOL, Yahoo,Verizon, Delta,
100 Convention Bureaus, 40 Hotel Lodging
Assocsand 30 StateTourism Bureaus.
Direct Connect
Next Generation Seamless GDS Connectivity
INCLUDING Automatic Rate, Availability, and HOD
Content Updates and Distribution
Internet Distribution System(IDS) Connectivity
INCLUDING Rate, Availability, and Allotment
Updates and Distribution
Hosted Web Siteand Travel Portals INCLUDING
Internet Marketing
Call Center Reservation and Support Services
Integrated Single Databasewith Single Image
Inventory
ReservationDelivery viaXML Interface,Email or
Fax
Rates, Allotments and HOD Content via core
Extranet
ReservationDelivery via Emailor Fax
Rates, Allotments and HOD Content via core
Extranet
Hotels with epitome PMS
Hotels with 3rd Party PMS
Hotels without a PMS