Industry Doubts Plan Will Fly

The verdict is still out on Inc.'s plan to create a business-to-business marketplace linking major corporate buyers directly with airlines, hotels and car rentals.

Officials from industry computer reservation systems say the idea holds some promise of reducing ticket costs, but they remain skeptical that the dot-com can offer enough products or customer service to force a major change in the travel market.

"In our minds, you're just replacing one intermediary for another," said Peter Stevens, vice president of business and product development at Sabre BTS, the business-to-business wing of Sabre Inc. in Fort Worth, Texas. "We don't think it doesn't make sense; it just hasn't proven itself out yet."

Sabre and Galileo International Inc. in Rosemont, Ill., have spent three-plus decades as the chief technological middlemen in the travel equation and are skeptical about GetThere's business model.

Menlo Park, Calif.-based GetThere runs business-to-business travel services for many large firms. It hopes to link major travel suppliers directly to those companies to reduce the overall costs of booking travel.

Jeff Palmer, vice president of strategic development at GetThere, said his company's business clients have been pushing for this type of direct connection to suppliers.

Because GetThere will be providing only the connectivity for the transaction and not fulfilling the sale itself, it can offer greater savings, he said.

But Sue Powers, a senior vice president at Atlanta-based Worldspan Inc., said it's easy to promise such savings but much harder to deliver.

For example, Galileo has access to more than 500 airlines and 40,000 hotels, according to David Near, the company's vice president for Internet and e-commerce.

GetThere might be able to lower the fee normally charged by a reservation system, but it might have to spend money in other places to do so, said Near.

"That is not a trivial exercise," Near said.

Analysts reacted favorably to GetThere's announcement, saying they have long been waiting for a company to change the business paradigm in the travel industry.

But David Jones, interim president and CEO of Amadeus America - the U.S. wing of Amadeus Global Travel Distribution LLC in Madrid - said the distribution model of GetThere is one that bears watching.

"Do we take it seriously? Yes," he said. "Do we feel threatened? No."


Copyright © 2000 IDG Communications, Inc.

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