Traditional and upstart travel-booking systems face off

ORLANDO -- At the eTravelWorld conference here yesterday, operators of established computerized reservation systems and online business-to-business travel upstarts engaged in a terse war of words over which side has the more highly evolved technology.

Executives from Galileo International Inc. in Rosemont, Ill., and Atlanta-based Worldspan L.P. claimed that decades of linking travelers and travel agencies with airlines, hotels and car rental companies gives mainframe-based reservation systems such as the ones run by their companies a significant advantage. Meanwhile, counterparts from e-commerce ventures GetThere Inc. in Menlo Park, Calif., and e-Travel Inc. in Waltham, Mass., claimed the older systems are old-school transaction processing engines that aren't fit for the online world.

"I can tell you this much. No matter what industry it is, I know where the new technology is going to come from," said Jeff Palmer, vice president for strategic development at GetThere. "The upstarts do it."

David Near, Galileo's senior vice president for Internet and e-commerce activities, acknowledged that Web-based technology offers alluring potential for companies in the travel industry. But he said it will take a long time for the Internet to become something that companies such as Galileo can build their businesses around.

In the meantime, Near said, old-fashioned reservation systems powered by mainframes will continue to be profitable for their operators. "I have an existing business," he said. "I have customers in 107 countries around the world [and run] 21 mainframes capable of processing 6 billion instructions per second." Shutting those machines down and replacing them with an online system isn't an option, he said.

Sue Powers, senior vice president and general manager for worldwide e-commerce at Worldspan, noted that the older reservation systems have traditionally handled business-to-business and business-to-consumer travel through their travel agency affiliates. But that's changing, she added: For example, Worldspan now offers a software-based B2B package that lets users book flights and other travel needs via the Internet.

However, Palmer argued that the Internet has fundamentally changed the playing field in the travel game. Middlemen such as Galileo and Worldspan no longer control the market because of their close ties to travel agencies, he said. Instead, companies can now directly book trips or find less obtrusive middlemen to handle their travel needs.

GetThere, which last month agreed to be acquired by travel-industry giant Sabre Holdings Corp. in a $757 million deal (see story), plans to aggregate direct links to travel suppliers for its corporate customers so they'll be able to interact with multiple airlines and lodging companies through a single portal. The initial links are due to go live before the end of the year, Palmer said.

Palmer and John Ackermann, e-Travel's president and CEO, said direct online connections to ticketing systems would demystify travel pricing and better spell out costs for corporate users. "We can simplify the process," Ackermann said. "Over time, the [computerized reservation systems] are going to have to respond."

e-Travel, a subsidiary of Oracle Corp., has already established direct ticketing links to Delta Air Lines Inc. and Continental Airlines Inc. Each airline treats the way the tickets are processed differently at this point, Ackermann acknowledged. But he and Palmer both said they hope groups such as the Open Travel Alliance step in to create technology and ticketing standards for direct links so systems don't have to be retrofitted for each participant.

The B2B companies also argued that Web technology allows travel suppliers to show the layout of hotel rooms and provide maps and virtual tours for their customers. "That stuff is going to run over a pure Internet architecture," Palmer said. "It's not going to jump into the mainframe and back out again."

But Near insisted that companies such as Galileo can compete with the newcomers on price and said the limitations of mainframe-based reservation systems are being grossly overstated. "It's not like we're new to this," he said. "We've been at this 20 years, and we make money. [Online rivals] lose money, and they're brand-new. Who are you going to bet on?"

Copyright © 2000 IDG Communications, Inc.

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