2000 - Leisure Travel News Remembers

Do you remember what you were thinking about at the beginning of the year? Well, we, at Leisure Travel News remember what we were thinking—indeed, we have a written record of it.
At year end 1999 the tech-centric NASDAQ was at 4,000 and climbing, and the travel industry was reeling from a slew of mergers, acquisitions and brand-new entrepreneurial endeavours: Vacation.com
, ByeByeNOW and Travelbyus had all burst onto the scene, each with promises of leading-edge technology that would integrate the two worlds of bricks and clicks.
Lowestfare.com, which focused on selling discounted air tickets, had stunned the industry with the purchase of esteemed escorted tour company Maupintour. The agency community was abuzz with concern about being disintermediated by the leading online agencies—Expedia had just completed a successful IPO, Preview Travel and Travelocity were gearing up to merge, and the shadow of a “super online travel site” launched by a consortium of major airlines hovered over the industry. Talk too loomed large of the demise of the global distribution systems, whose legacy mainframe technology would be antiquated by modern, Internet-based platforms as suppliers reached agents and consumers directly through the Web.
Well, what a difference a year makes, as some of the hot topics of just a few months ago have become the stuff of hushed conversations off to the side at industry conferences. The investment community took a deep breath as the stock markets began their steady descent from the stellar heights in March, and a new, more tempered reality set in. The IPO hopes of more than a few travel- and technology-related firms have been postponed, if not dashed entirely, and the widely reported difficulties experienced by ByeByeNOW in attaining funding, driving the company to restructure and cancel its national convention, is only one of the more high-profile examples.
The GDSs, meanwhile, have never seemed to be stronger—or more aggressive—in their efforts to tackle the market and tailor that new reality to their advantage. What we have done in this issue—a first of what we expect will be an annual year-end exercise—is take stock of the major trends and events of the past 12 months. This isn`t comprehensive, and it`s admittedly subjective. Our editorial team has scoured the many pages of every issue of Leisure Travel News to see what companies, issues and developments took pride of place among the magazine`s headlines. The question this story asks is, where they are now?
If 1999 saw such top-flight sites as Travelocity and Expedia emerge not only as leaders online, but as some of the largest travel agencies, online or off, 2000 was the year for Internet travel to get real. With March`s market correction, travel dot-com stocks went south, IPOs were postponed, and the Internet hype and hyperbole of years past gave way to serious questions about profitability and the long-term viability of many e-travel aspirants. The “Internet Travel” report by investment house Bear Stearns released in April boldly announced that as much as 80 percent of the 1,000-odd travel e-commerce sites would either be acquired or fail, causing quite a stir. Yet consider just a few of the major online developments this year: Acquired: Preview Travel, by Travelocity; lodging sites Travelscape and VacationSpot by Expedia; Trip.com by Galileo; adventure travel site Adventureseek.com by Unexplored. No Longer: Wal-Mart`s online travel store and BuyTravel.com, a joint venture between United Airlines and Buy.com. The buzz these two sites generated at their launch faded only a little bit more quickly than the sites themselves.
Reality Checked: The biggest dose of reality this year was swallowed by Priceline, whose shares tumbled on the debacle of some its non-travel businesses; after all the hype about Orbitz, the much-awaited launch of the airline-supported site was put off by almost a year; TravelNOW.com is currently “exploring strategic options,” along with online tour aggregator Whiplash, which also laid off most of its staff in November; Adventure site iExplore also underwent a restructuring, as has ByeByeNOW; and GeoAgents, which provides Web sites to agents, has also reportedly laid off staff and is looking for a buyer. But it`s not all doom and gloom. A handful of online travel players, such as Hotel Reservations Network, Cheap Tickets and Lowestfare.com, have proven to be online success stories, building profitable businesses in what is today a very unforgiving marketplace.
Online leaders including Travelocity, Expedia and others are re-engineering their businesses to capture off-line opportunities (such as working with agents -see “Follow The Leader,” below) and build sustainable operations. And executives even of those struggling firms acknowledge that the shakeout is a positive for the industry. “One of the good things about the environment tightening up is, a lot of the concepts that didn`t make sense at the beginning are going away,” said the CEO executive of a travel dot-com startup.
The rise and fall of travel dot-coms may have captured more headlines, but another hot tech growth area was among travel agencies themselves, which flocked in droves to new technology companies and consortia to get online access to consortia extranets, build Web sites and much more. While companies such as TRAMS and Online Agency have been building agent sites for some time, newer players TAedge and GeoAgents as well as major consortia have rolled out new online products and services this year. Vacation.com, which rolled out its AgentNet extranet platform in June, now has some 4,600 agencies accessing it and over 1,000 agencies that have built a Web site.
Galileo, which launched its private-labelled e-commerce sites for agencies, TravelGalileo.com, in September, already has nearly 600 agencies using the service. And all of this activity is borne out by ASTA`s recently released Agency Automation Survey, which revealed that 90 percent of member agencies are online, and over 50 percent have a Web site—big increases over previous years.
With the onset of the Internet, the demise of the legacy GDSs, or global distribution systems, had been a very popular topic at online travel conferences. Well ... guess again. The GDSs have all emerged at the end of 2000 with a new, aggressive, Web-enabled sheen. Worldspan and Sabre have been migrating all of their agency tools to the Web (Worldspan Go! and Sabre eVoya) and making significant investments in the online and leisure travel spaces.
But if any GDS has reinvented itself over the past 12 months, the award certainly goes to Amadeus. The GDS took stakes in 1travel.com, Uniglobe.com and Travelbyus and unveiled major leisure distribution initiatives with Fourth Dimension Software (see LTN, Dec. 18), but the piece de resistance, of course, was the nearly $90 million acquisition of Vacation.com, the leisure behemoth with 8,400 agency members. Many in the industry raised eyebrows at the acquisition, questioning such a pricey purchase of an unwieldy mass of agencies that, say some, have little loyalty to the consortium. And, more than a few member agents have expressed concern about a GDS owning their membership organization. But, the European-based Amadeus, in last place in the North American market, has made it clear it`s after U.S. market share—especially in the leisure and online arenas. And rumblings abound that Amadeus still has a few moves left to make.
Tours and cruises have been one of the most dynamic, controversial and fast-growing segments of travel technology. Cruise and tour suppliers are anxious to ease distribution costs and pressure on call centres, travel agency owners want their frontliners to become more efficient through the use of automated booking tools, and even online agencies such as Expedia and Travelocity, struggling to make a profit on airline tickets, are vastly building up their offerings of higher-margin cruises, tours and packages.
But the major challenge leisure travel executives have been telling us all year is that the technology still lags behind, and there is yet no system that can comprehensively manage the complete technology needs of cruise lines and especially tour operators and provide a user-friendly interface for less tech-savvy agents and consumers. And it`s just such an absence of a technology solution, and the fact that just a small fraction of cruises and tours are booked electronically, either by consumers or travel agents, that have spurred a slew of technology companies to tackle the market head-on. Here`s a look at where some of the year`s leisure headline grabbers are now: eLeisure Network, the joint venture between The Mark Travel Corporation and Carnival Corporation, is clearly a major player in this arena, with content from the TMTC brands as well as those of Certified Vacations up and running and bookable by some 2,200-plus agencies using VAX, or VacationAccess booking engine. And Carnival Cruise Line content is rolling out in January.
Amadeus has announced two major initiatives with Fourth Dimension Software. The first is a next-generation distribution platform for tour operators and package wholesalers; the second is a joint-venture, Atinera, announced last week, that aims to offer complete technology solutions to leisure travel companies. This initiative, along with the GDS`s acquisition of Vacation.com, suggest a very focused commitment to leisure.
Sabre also announced early in 2000 plans for successor products to its Sabre Tourguide and CruiseDirector. The new Sabre Cruises, developed with GoCruiseDirect is being rolled out this month. Sabre execs say agents will have to wait until next year for the new tour booking tool. Worldspan too announced a new cruise platform with GoCruiseDirect (out this month) and an online multi-media database of cruise and tour product with ByeByeNOW (we`re still waiting).
Datalex was just last week catapulted into the leisure travel headlines following the announcement that it is building the travel platform for tour operator giant Far & Wide. The company, which is more well known for providing online booking engines, is also building a new system with Vail Resorts.
Digital Travel, Viator and Whiplash have all been building Internet-based networks of tour and packaged content not available on the GDSs. Where are they now? Well, Worldspan agents can book Digital Travel`s international FIT packages through the “World Tours” button on Go!, though the word is they haven`t been booking much so far. Viator`s network is accessible through Worldspan, Sabre and Expedia. Executives won`t say how business is. Whiplash apparently had some 300 suppliers signed up when a round of funding fell through in November and the company began looking for a buyer.
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