Travelocity Updates Fourth Quarter Guidance

Travelocity.com Inc. (Nasdaq: TVLY), the leading travel Web site, announced that total revenues are expected to be about $68 million for the fourth quarter of 2001, approximately 9% lower than previous guidance, and compared to $65 million for the fourth quarter of the prior year.
Pro forma earnings per share are expected to be within the guidance given in October of $0.08 to $0.11.


Advertising and other non-transaction revenues are expected to slightly exceed the previous guidance given for the quarter. However, unexpectedly slow sales of airline tickets during the December holiday travel period due to airline capacity reductions, combined with the lingering effects of the September and November tragedies and related air fare reductions, will likely cause transaction revenues to be below prior expectations by 15% to 20%.


“Looking forward to 2002, we expect strong revenue growth of 20% to 30%,” said Terrell B. Jones, president and chief executive officer of Travelocity. “Today`s announcement with Continental and arrangements with other major airlines demonstrate Travelocity`s importance as a distribution and marketing channel in the travel industry. In December, we officially opened our call center in Pennsylvania dedicated to vacations and cruises and we announced the implementation of merchant model technology using Contour software. These are all key aspects of our revenue diversification and growth strategy for 2002.


“Furthermore, we should benefit significantly as consumers shift towards online sources for their travel purchases and as the travel and tourism industry in general rebounds,” Jones continued.


Management will review fourth quarter and year-end results and provide detailed guidance for 2002 during the Company`s earnings conference call at 4:00 pm CST on January 16.

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The expected range of pro forma earnings per share for the fourth quarter of 2001, as stated above, has been determined on the same basis as pro forma earnings per share announced for prior periods. The Company`s pro forma results are not GAAP results in that the latter include goodwill amortization expense, non-cash stock compensation expenses and other non-cash items.


About Travelocity.com

Travelocity.com Inc. (Nasdaq: TVLY), a database-driven travel marketing and transaction company, provides Internet and wireless reservations information for more than 700 airlines, more than 50,000 hotels and more than 50 car rental companies. In addition, Travelocity.com offers more than 6,500 vacation packages, tour and cruise departures and a vast database of destination and interest information. Travelocity.com employs more than 1,000 customer service professionals, has sold more than 19 million airline tickets and has registered more than 30 million members.


www.travelocity.com


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