It’s been a while since TravelNet went the way of the dodo, a fact that two-thirds of the delegates to the Travel Technology Association’s recent predictions dinner must have been mindful of when they forecast the demise of at least one major corporate online reservations business by next year.
What wasn’t discussed, presumably because many of that evening’s patrons worked for the booking services in question, was: who’s next? Who will follow the path that TravelNet has blazed for us?
At the futurists’ fete, PhoCusWright president Philip Wolf presented the candidates — those he considers to be the major players in the field: American Express’ AXI service, DirectLink Technologies, E-Travel, Internet Travel Network, Sabre Business Travel Solutions, Via World Network, and Xtra Online. Now we are left to ponder who will survive — and who won’t.
Nicole Vanderbilt, director of digital commerce at Jupiter Communications, is looking for answers. Although her company specializes in surveying the bigger online leisure travel market, it also is cooking up corporate projections for a new report that will cover the next five years.
In her estimation, there’s no weak booking product that’s ready to fold. But that could change.
“The overall travel pie itself is growing so rapidly that it’s still a pretty good picture for most of the major players involved,” she notes. “Over the long term, however, there will be major competition for [that] piece of the pie from airlines, which are developing their own booking products.”
The conventional wisdom, according to Forrester Research analyst Seema Williams, is that the booking products with deep pockets aren’t going anywhere any time soon. “I’d be surprised if anything happened to the majors,” she says. Those include CRS-backed projects like Sabre’s BTS and the online equivalent of a trust fund kid, the American Express-Microsoft AXI program.
The list now narrows to DirectLink Technologies, E-Travel, ITN, Via World Network, and Xtra Online.
I asked Michael Steiner, executive vice president for marketing and technology at DirectLink Technologies, how he felt about making the short list of prospective casualties.
“There’s a lot of competition out there,” he agreed. “From my perspective, the predictions may be right, or they may be wrong. I believe the market still has room to grow. If you poll the number of companies that are doing bookings online versus the number of companies that expect to do bookings online, you’ll see that’s the case.”
Steiner thinks the players that are “in it for the long haul” will survive. The rest will take their cue from TravelNet.
This, of course, raises yet another question: who isn’t in this business for the long haul? Is it ever-IPO-ready Internet Travel Network? Or Xtra Online, which is on the verge of dipping its snout into Wall Street’s trough? It’s hard to tell.
Chris Schutte, a senior consultant for PhoCusWright, likes to use a Watergate-era term when weeding out the keepers from the goners — follow the money.
“If you look at companies like Xtra Online and E-travel, it’s a question of money. When is the last time they were funded? And what is their burn rate?” he says. If their funding is running dry and there’s no hope of finding public investors through a stock offering or a subsequent round of financing, then the only solution might be a sale to a bigger competitor hungry for new technology or, more likely, new accounts.
It’s all but impossible to predict who will run out of funding first, only that it probably will happen. And soon.
When it does, we should be careful about drawing too many comparisons to TravelNet, the ill-fated company purchased by Reed Travel Group a year before it closed up shop.
The next casualty probably will die for reasons very different from TravelNet. In the end, perhaps the only similarity that the two companies will share is that they were both corporate booking products.
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