BOSTON (06/01/2000) - Looking to slice into the market dominated by established computer reservations systems (CRS), GetThere.com Inc. is planning to launch a new network that will connect corporate customers directly with major airlines, hotels and car-rental agencies.
The Menlo Park, California-based travel service plans to unveil its Supplier Network later this summer with offerings from United Air Lines Inc., Northwest Airlines Inc. and Trans World Airlines Inc. (TWA). There will also be offerings from Marriott International Inc., Radisson Hotels & Resorts and Starwood Hotels & Resorts Worldwide Inc., along with Avis Rent a Car Inc., Budget Rent a Car Corp. and The Hertz Corp.
GetThere will put those suppliers on a business-to-business network with major corporate clients such as Xerox Corp., Lucent Technologies Inc. and Nike Inc., allowing buyers to get information directly from vendors.
By de-emphasizing the role of the middle man, GetThere hopes to charge lower transaction fees and undercut much of the business that current flows through the Sabre Holdings Corp., WorldSpan LP, Amadeus Global Travel Distribution and Galileo International Inc. reservation systems.
"We think reducing agency fees will save at least six digits on our travel spending," said Pam Moll, a travel services manager at Stamford, Connecticut-based Xerox Corp. "And that's just by booking online rather than going through the traditional channels."
Steve Jett, manager of e-commerce marketing at Minneapolis-based Northwest Airlines, said many corporate customers had come to the airline seeking such connections.
"Everyone thinks this is going to reduce distribution costs and if they want to go through a direct solution, we have to meet that need," he said.
The idea is hardly a new one. Online travel sites such as e-Travel Inc. in Waltham, Massachusetts, offer corporate direct connects with Delta Air Lines and Continental Airlines Inc. However, Jett said, the vast majority of his company's business still flows through the traditional computer reservations systems.
"There's a lot of start-ups surfing on the edge, looking to do this sort of direct stuff, but GetThere is the first in this particular segment we think has a lot of legs," said Scott Bush, vice president of sales and distribution at St. Louis-based TWA.
He added that direct bookings could contribute "hundreds of millions" to TWA's revenues during the next decade, and that GetThere's client list of "marquee names" helped convince the airline to join the network.
"Their product opens doors for a small carrier like TWA that it may not have been able to open for itself," Bush said.
GetThere's corporate client list should draw more suppliers into the mix, said Kate Rice, an online travel analyst at Sherman, Connecticut-based PhoCusWright Inc.
"The one advantage the CRSs have had over the Internet is their collection of major suppliers in one marketplace. (GetThere's Supplier Network) really poses a challenge to that," she said.
"Once these folks have tested the waters and reported back as guinea pigs that all is fine, you can expect more will follow," said Henry Harteveldt, an analyst at Forrester Research Inc. in Cambridge, Massachusetts.
Jeff Palmer, GetThere's vice president for strategic development, said his company will need to be aggressive in continually improving its services once the network launches.
"We certainly think this is the first wave, not the total," he said.
"Functionality and scalability will be keys for us."
Palmer noted that the use of XML standards in the travel industry and general business community helped make the integration of suppliers and users a much easier task.
Harteveldt said GetThere and e-Travel "are definitely leading the industry down a new path.
"But the (CRS's) are huge organizations, they will not take this lying down," he added. "We'll how to see how they respond and how they try to add value when someone else has come up with a cheaper model."