Upbeat 2005 closing for travel sector
Reports of mergers in the hotels portion, of the travel industry, had several stocks closing out the year on an upbeat message. Hilton Hotels Corp jumped up to close at $24.00, an increase of 7.62%, after it said Thursday it agreed to reunite with Hilton Group Plc, after a 40-year split.
The $5.7 billion cash deal, expected to close in the first quarter, does not include HGP’s gambling business and will make Hilton the largest company in the lodging industry.
Others in the lodging industry which saw action yesterday included Starwood Hotels and Resorts Worldwide and InterContinental Hotels Group on speculation that the Hilton merger may be a precursor to further transactions in the sector.
Another issue expected to see increased activity is Onelink4travel, Inc., which said that it will initiate a 30 days trial run of its booking and settlement system this week with PNR Travel, a leading hotel marketing service based in Los Angeles and wholly owned operating unit of Onelink4travel, signifying one of the final steps before widespread roll-out of its core transaction processing system, meaning it’s probable that it will not be available at this level much longer.
Onelink4travel already has agreements with key suppliers including Sabre Travel Network, PayPal, Hotels.com and Amadeus Global Travel Distribution, but PNR Travel will be the first agency to access the service, as a benefit of its membership in Computerized Corporate Rate Association, a Preferred Rate Hotel Program.
Robert E. Kern, Jr., President of PNR Travel, said, “PNR Travel strongly believes that a true retail business model is essential for the future success of the travel agency community.
Onelink4travel’s system supports this concept by putting the agent in control of the customer transaction. By doing so it not only strengthens an agency’s business position, but also improves its perceived value in the eyes of the customer. PNR Travel is excited to be the first agency to benefit from the Onelink4travel system, and looks forward to the company’s larger success.”
Onelink4travel’s GDS is focused on the multi-billion dollar non-airline travel industry and pending successful completion of its software test, will begin introducing the service in late December to U.S. based travel agents who are members of the company’s CCRA International hotel marketing program, followed by a full-scale launch to Onelink4travel’s 100,000 travel agent members, most of which are based in North America, scheduled to begin in January.
If OneLink starts trading at typical industry multiples it could shoot straight up because starting fiscal year 2006 the company forecasts total revenues to hit between $42 million and $48 million for 2006, giving it an estimated operating income, 2006, of $11.5 million to $13 million, or $0.37 to $0.42 per share.
Thereafter, OneLink believes it can achieve revenues in the $250 million range, if it’s able to hit 5% market penetration for its unique proprietary product. The OneLink GDS system is designed to interface with the prominent air travel computerized reservation systems, including Sabre, Galileo, Apollo, Worldspan and Amadeus.