IN THIS ISSUE: Q1 Performance Review - Room Nights Jump 9.5% New iHotelier Customers Report Up to $54K in Incremental Revenue in First Month Introducing Hotel Spotlight on Sabre Internet Reservations Up 34% for Brands in 2003 Special Report Pages 1 | 2 | 3 | 4         Summer 2004          Are the GDS Finally Silencing their Skeptics? While all growth trends support the channel's ongoing viability, a fair amount of cynicism among industry observers on the long-term sustainability of the GDS business model remains. Recent positive developments provide important insight on why the GDS have survived and how they are evolving. The Sunset of GDS Regulations This year, the U.S. government ends its 20-year regulatory oversight of the GDS. The oversight enforced "mandatory participation" rules and neutral screen displays for airlines. The rules attempted to balance travel agent booking behaviors by requiring neutral screen displays for carriers owning a GDS and for non-GDS owners that need to display their flights. Since late 2002, the GDS have worked with major carriers toward multiyear participation agreements, in an effort to secure airline use of the GDS systems after the sunset of the mandatory participation regulation. One of the most important developments within the new agreements is GDS access to complete airfare content, including "Web fares." Previously, many carriers omitted these fares from GDS displays, opting to distribute them primarily through their own branded Web sites instead. The additional airline Web fare content has increased an already valuable GDS media advertising opportunity. Many leading GDS e-marketers extend special offers to travel agents on the air availability and air sell screen displays. As most agent/customer interaction occurs during the airfare search and selection process, utilizing these screen displays provides highly cost effective ad placement. Understanding The Importance of Travel Agent / GDS Agreements Travel agents can now receive all airline content through one GDS. In addition, agencies receive a combination of technology and financial assistance when entering into a GDS agreement. These two points reinforce the sustainability of the GDS as a channel. Agents rely on real time GDS seamless technology to provide accurate price quotes within a three second response time, which includes fares and pricing available on the Web - a must for excellent customer service. Given these requirements, the GDS represent a "one-stop shop," enabling agents to quote, sell and process orders into integrated travel itineraries through their back office accounting systems. Booking outside the GDS costs agencies valuable time as well as considerable incremental expense. Agencies receive significant financial incentives for three to five year commitments to a GDS. When agents fall short of their booking goals, the result can more than completely offset all GDS compensation. Supplier strategies that attempt to lure agents into multiple booking systems fail because of the lost agent productivity and compensation. Equally important, these back door strategies are expensive for suppliers to implement, resulting in little or no return and actually serving to drive agents away. Despite reports to the contrary, travel agent revenue is up 13.3% in the first quarter of 2004 - and that trend is expected to continue. The smart hoteliers who follow successful evolution of the GDS are those who will continue to capitalize on the sizable potential of the channel. TravelCLICK Launches ChannelManager Beta Customers Rate Product 4.3 on a 5.0 Scale TravelCLICK is pleased to present ChannelManager, a single platform from which hoteliers can manage all of their rates and inventory across multiple retail and merchant Web sites. In a recent beta test with 25 hotels, ChannelManager users rated the tool as 'very good' to 'excellent' overall, and reported enjoying the benefits of TravelCLICK's personalized advisory support service. In addition, the beta hotels praised the following time saving features. 1. Allocation Optimizer, an advanced revenue management tool that reduces time spent checking availability and manually adding inventory as allotments sold out. 2. Consumer Rate Parity Option, which eliminates the use of Excel spreadsheets to calculate margins. For hotels that subscribe to ChannelManager, TravelCLICK provides access to a dedicated technical and revenue management support team. This team is comprised of seasoned revenue managers from the top U.S. hotels, and will assist hotels with questions and issue regular communications with helpful tips. "ChannelManager is a wonderful tool that allows me to save hours spent on the extranets every week and maintain perfect rate parity among all the Internet channels - instantaneously. It is a one-stop shop that allows me to be more active with yielding rates," said Mandira Sen, director of revenue management for The Charles Hotel in Cambridge. "Using ChannelManager also allows me to participate in more merchant model programs, as there is no extra time or effort needed to manage yet another extranet. I have been very happy with the support provided by the ChannelManager team whenever I needed them. Pages 1 | 2 | 3 | 4