Sabre Buys GetThere, Will Cut 1,200 Jobs

Arguments over which company was leading in the business-to-business travel procurement space were put to rest last week as Sabre Holdings Corp. purchased its chief competitor, GetThere Inc. in Menlo Park, Calif., for $757 million.

Fort Worth, Texas-based Sabre also announced plans to cut 1,200 jobs companywide during the coming months, or about 11% of its workforce, to improve growth and profitability. Sabre and GetThere officials said most of the cuts will be in Sabre's traditional travel-agency support business.

Sabre said the job cuts would occur through attrition and layoffs and are expected to save the company $100 million annually beginning next year. The new entity will retain GetThere's name, and GetThere President and CEO Gadi Maier will head Sabre's Business Travel Solutions (BTS) division.

This past spring, GetThere announced plans to launch a supplier-direct network that would put corporate buyers in direct contact with airlines, hotels and car rental agencies, bypassing traditional computer reservations system like Sabre.

Rob Wald, director of product marketing at e-Travel Inc. in Waltham, Mass., said GetThere may not be able to build systems that don't rely on Sabre's travel architecture. "I think it's questionable as to whether Sabre will ultimately commit to that business model," Wald said. E-Travel, an Oracle Corp. subsidiary that operates a supplier-direct network, has placed third in the business-to-business travel race.

Some Doubts

Peter Stevens, Sabre BTS's vice president of business and product development, questioned the supplier-direct concept this past spring. Last week, Stevens said he still had questions but added that Sabre "wants to be there if this is the market that's going to break."

GetThere Chief Operating Officer Ken Pelowski said many merger details, such as which company's customers will be migrated to new systems and whether more of GetThere's systems will use Sabre's technology, will be disclosed after the deal is finalized in the next few months.

Analysts said they don't foresee any antitrust concerns arising in the business-to-business arena, though efforts in other industries have drawn regulators' attention. "There isn't enough of a market to corner yet," said Melissa Shore, a senior analyst at Jupiter Communications Inc. in New York.

Shore said that she expects the business-to-business travel market to far exceed the consumer market once companies begin to fully use the offerings of Sabre/GetThere, e-Travel and Amadeus Global Travel Distribution LLP, which has partnered to build a business-to-business offering with Lotus Development Corp.

Copyright © 2000 IDG Communications, Inc.

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