Sabre Holdings last week announced plans to align its GetThere subsidiary with its Travelocity, Travel Network global distribution system and Airline Solutions divisions "to take advantage of synergies and market opportunities."
As part of the restructuring, GetThere's online technology development team will be integrated with that of Travelocity, and the GetThere self-booking technology and reseller agreements will be offered in conjunction with Sabre GDS services. Sabre intends to continue to allow GetThere users to connect it to competing GDSs, the company said.
Existing GetThere clients should experience no changes for the foreseeable future, a GetThere spokesperson said. He said the realignment "brings the full service options all together under Travelocity," which operates its own fulfillment facilities. While clients using GetThere's Fulfillment Service Option with TQ3 Travel Solutions will become Travelocity Business customers, there are no plans to move those operations. Most details of the realignment, Sabre said, will be determined "over the next several weeks" by an integration team. GetThere's brand names will remain, Sabre said.
In a filing with the Securities and Exchange Commission, Sabre did not refer to cutbacks in personnel or facilities, stating that, "We do expect to achieve synergies and cost savings as a result of combining our technology and reducing our overhead. We will be able to communicate more about these synergies and cost savings in the coming weeks." However, Sabre corrected an erroneous wire service report by saying the move may result in job cuts among GetThere's 350 employees.
According to one Wall Street analyst, "GetThere was unlikely to produce a meaningful return by itself, given the conflicting technology with Travelocity and the GDS, and the platform with online investments and corporate travel initiatives should be singular."
GetThere saw 36 percent year-over-year growth in corporate transactions in the second quarter, to 2.6 million, driving 24 percent growth in corporate revenues. Overall revenue, however, fell 6.3 percent, to about $12 million, following the loss last year of relationships with America West Airlines and American Trans Air. Sabre this summer expected GetThere to generate approximately 10 percent revenue growth for 2003.
"This announcement further reinforces the move toward an integrated online solution," said Travel Tech Consulting president Norm Rose. "With Expedia and Orbitz offering the corporate market low fees, all vendors are being pushed to provide a single, low-cost online travel solution. Cendant's announcement at NBTA
(BTN, Aug. 25)further fueled this trend. Though GetThere may have dominant marketshare, Travelocity has the brand from the consumer and executive management perspectives. I believe it is no coincidence that Travelocity president Sam Gilliland used to run Sabre BTS and is obviously well versed in the managed corporate market."
Sabre intends to consolidate GetThere's revenue and earnings reports into those of the three remaining business units. "We are determining the timing of the financial reporting consolidation, as well as the level of metric data we will disclose," Sabre said.