Dot-com to Offer Direct Link to Travel Suppliers

Will charge corporate clients lower fees than middlemen

Looking to slice into the market dominated by established computer reservations systems, Inc. plans to launch a network this summer that will connect corporate customers directly to major airlines, hotels and car rental agencies.

By de-emphasizing the role of the middleman, GetThere hopes to charge lower transaction fees and undercut much of the business that currently flows through Sabre Holdings Corp., WorldSpan LP, Amadeus Global Travel Distribution and Galileo International reservation systems. Those companies didn't return phone calls by press time.

Menlo Park, Calif.-based GetThere has already signed up United Air Lines Inc., Northwest Airlines Inc., Trans World Airlines Inc., Marriott International Inc., Radisson Hotels & Resorts, Starwood Hotels & Resorts Worldwide Inc., Avis Rent a Car Inc., Budget Rent a Car Corp. and The Hertz Corp. for its supplier network.

GetThere will put those suppliers on a business-to-business network with major corporate clients such as Xerox Corp. in Stamford, Conn., Lucent Technologies Inc. in Murray Hill, N.J., and Nike Inc. in Beaverton, Ore., allowing buyers to get information directly from vendors.

Six-Figure Savings

"Reducing agency fees will save at least six digits on our travel spending," said Pam Moll, a travel services manager at Xerox in Rochester, N.Y. "And that's just by booking online rather than going through the traditional channels."

Steve Jett, Minneapolis-based Northwest's manager of e-commerce marketing, said many corporate customers have approached the airline seeking such connections.

"Everyone thinks this is going to reduce distribution costs, and if they want to go through a direct solution, we have to meet that need," he said.

The idea is hardly a new one - e-Travel Inc. in Waltham, Mass., for example, offers companies direct connections to Delta Air Lines Inc. and Continental Airlines Inc. But Jett said, the vast majority of Northwest's business still flows through traditional computer reservations systems.

"There's a lot of start-ups surfing on the edge, looking to do this sort of direct stuff. But GetThere is the first in this particular segment we think has a lot of legs," said Scott Bush, vice president of sales and distribution at St. Louis-based TWA.

He said that direct bookings could contribute "hundreds of millions" to TWA's revenue over the next decade and that GetThere's client list of "marquee names" helped persuade the airline to join the network.

"Their product opens doors for a small carrier like TWA it may not have been able to open for itself," Bush said.

GetThere's corporate client list should draw more suppliers into the mix, said Kate Rice, an online travel analyst at Sherman, Conn.-based PhoCusWright Inc.

"The one advantage the (computer reservations systems) have had over the Internet is their collection of major suppliers in one marketplace. (GetThere's Supplier Network) really poses a challenge to that," she said.

"Once these folks have tested the waters and reported back as guinea pigs that all is fine, you can expect more will follow," said Henry Harteveldt, an analyst at Forrester Research Inc. in Cambridge, Mass.

Jeff Palmer, GetThere's vice president for strategic development, said his company will need to be aggressive in continually improving its services once the network launches.

"We certainly think this is the first wave, not the total," he said. "Functionality and scalability will be keys for us."

Palmer noted that the use of XML standards in the travel industry and general business community helped make the integration of suppliers and users a much easier task.

Harteveldt said GetThere and e-Travel "are definitely leading the industry down a new path.

"But the (computer reservations systems) are huge organizations. They won't take this lying down," he added. "We'll have to see how they respond and how they try to add value when someone else has come up with a cheaper model."


Copyright © 2000 IDG Communications, Inc.

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