Atlanta - Amadeus and Galileo International on July 30 announced that they had established their first significant footholds in the U.S. corporate online booking arena by acquiring Waltham, Mass.-based E-Travel and Seattle-based Highwire, respectively.
Upon their entry into the self-booking market, both global distribution systems said they anticipate improved collaboration with travel management companies, a marketplace that welcomes multiple solutions, integration with other corporate systems and expanded sales and marketing efforts.
While there is some evidence that the market is seeking more alternatives in the corporate booking field, competing with Sabre and its market-leading GetThere subsidiary will be a challenge.
Common to both companies' strategies is multiple product offerings.
Rosemont, Ill.-based Galileo bought Highwire largely because the GDS' Corporate Travelpoint 2.0—which landed the largest U.S.-based travel account, IBM, as a technology supplier and pilot customer—won't be available until next year.
"There is no plan for a forced migration to one platform," said Babetta Gray, Galileo executive vice president of subscriber sales and service. "Both of our products are viable in their own right, and we believe the market is seeking different needs."
At Madrid-based Amadeus, a product designed for Lotus Notes users due out no sooner than this fall will complement its Corporate Traveller product, a solution for SAP users and E-Travel.
Amadeus vice president of corporate partners Ian Wheeler said, "We want to be able to adapt to whatever a corporate customer wants."
This strategy contrasts with Sabre's plans, which include the eventual migration of all its corporate customers to a platform that more closely resembles GetThere than Sabre Business Travel Solutions. Additionally, American Express recently shut down its American Express Interactive product that had been developed with Microsoft in favor of the Corporate Travel Online product provided by GetThere. Both do provide modified solutions for the midmarket.
A key challenge for both Amadeus and Galileo is how well they can support self-booking product clients who use other GDSs (see story, page 12). "This is our first step to being multi-GDS," Wheeler said. "I don't see the multi-GDS aspect disappearing just because E-Travel now is owned by a GDS. It's a decision by the corporate, maybe pushed by the travel agency, and I don't see us closing access to others. It's important that E-Travel remain neutral in the marketplace."
Still, E-Travel CEO Scott Gutz, who, like Highwire CEO Marka Jenkins, will retain the CEO role within the new parent company, acknowledged that self-booking products will continue to work better with some GDSs than others. "The concept of optimized solutions will become prevalent," Gutz said.
The IBM deal requires Galileo to deliver multi-GDS connectivity on Travelpoint 2.0 in 18 months. As for Highwire, whose Travelport product now runs only on the Galileo GDS, "We'll look at what the market asks of us," said John Hach, vice president of corporate and consumer sales and marketing. Another facet of both strategies rests on integration with and cooperation from the travel management community.
Gutz, who arrived at E-Travel in late 1999, said, "When I first joined E-Travel, there was this idea of 'eliminate the travel agency.' But we've opened our eyes and are seeing that travel agencies have a major influence." He said the big eye-opener was the work E-Travel did with Rosenbluth International to accommodate an online booking mandate by former parent company Oracle Corp. (BTN, March 12).
At the moment, however, E-Travel's only formal agency relationship is with SatoTravel, which recently was acquired by Navigant International.
"That whole relationship is in a maintenance mode for the short term," said Mike Preemo, now president of Navigant Integrated Services. He said the as low as $17.95 "Internet Business Trip" marketed by E-Travel and Sato "is not huge for either one of us." Gutz hopes to establish where the partnership will go in upcoming talks with Navigant, but said his understanding is that it will continue. Navigant recently partnered to market GetThere and TRX's ResAssist products.
E-Travel likely will benefit from Amadeus' agency relationships, but the booking product is designed for and will continue to be marketed to buyers in the United States, where Amadeus' agency share is the lowest of the four GDSs. As for Galileo, long-time agency subscriber Rosenbluth will promote its products.
Terms were not disclosed on the Amadeus/E-Travel deal, which became official July 27, but sources familiar with Oracle's initial prospectus estimated the purchase price to be about $25 million, plus about the same in debt. E-Travel will be operated as a wholly owned subsidiary of Amadeus and will retain all of E-Travel's employees and infrastructure.
The companies later this year hope to give the industry an update of their plans, which they said definitely will continue E-Travel's selling points of enterprise system integration and direct links to travel suppliers that bypass the GDSs. Already, Gutz and Wheeler said they hope to discuss possible integration or shared services with Amadeus' other U.S. interests, including personalization software provider BroadVision of Redwood City, Calif., and faring engine developer ITA Software, based in Cambridge, Mass.
Highwire's own work with ITA will be "reevaluated," Jenkins said, following the closing of Galileo's acquisition, due in September. Sources guessed that Galileo paid between $7 million and $10 million for Highwire, of which it already owned a small piece.
New York-based Cendant Corp., which is facing a longer-than-expected governmental review of its planned purchase of Galileo (BTN, June 25), fully backed the Highwire deal. "We are investing in competitive advantage," said Mark Miller, president and COO of Cendant's travel division. "Go big or go home."
In contrast to Galileo's Travelpoint, Highwire's Travelport will be marketed to clients who want a product now, want to give travelers more flexibility in shopping or want to work with existing agency profile databases and desktop applications. Travelport also has a portal feature for communicating with travelers and vendors that Travelpoint does not, and the two have distinct user interfaces.
Travelpoint 2.0 will be designed for travel programs that are highly managed, with Visa beginning a small pilot in September. Galileo also is migrating more than 40 customers in Europe, Hach said, as part of a three-month-old pilot. The IBM migration to Travelpoint is a six month process, largely because agencies that want to service Travelpoint need to upgrade their Galileo software to accommodate the centralized data store of policies, preferences and profiles.