Expedia agrees to power Travelocity websites in US and Canada
The partnership also gives Travelocity access to Expedia’s product supply line customer services and is expected to come to fruition in 2014.
A joint statement from the pair stresses that Travelocity will remain wholly owned by Sabre Holdings and independent from Expedia.
The agreement covers only Travelocity’s brands in North America, with Lastminute.com and other Travelocity Partner Network brands not included.
The move effectively shifts technical operations behind the scenes at Travelocity over to its former arch rival Expedia and, in the words of the statement, gives the smaller OTA the chance to “focus its efforts on promoting its brand and marketing the broad offering of travel services and supply made available through this agreement”.
In other words: Travelocity is now essentially a marketing brand where it will be paid through a “performance-based marketing fees related to bookings”, the statement says.
Expedia CEO Dara Khosrowshahi says:
“Over the years, Travelocity has become one of the most recognized travel brands in the US and Canada. Going forward, this agreement will enable Travelocity to focus on further building its brand while at the same time providing consumers with an enhanced suite of travel products and services.
“This announcement stands as a true testament to the advanced capabilities that our significant technology investments over the past several years enabled us to build. We believe volume generated through the agreement will add further scale to Expedia’s global supply and customer service capabilities.”
Travelocity Global president and CEO Carl Sparks adds:
“In staying true to our core values of meeting the needs of both consumers and travel suppliers, we have elected to evolve and strengthen our business model in the US and Canada by working with Expedia, Inc. to offer a top-notch booking platform and a more robust supply of travel options, allowing us to focus increased resources on building our competitive strengths in marketing and retailing.”
The agreement will perhaps set off alarm bells around the industry that this is the first step towards some kind of larger deal between the pair.
But equally it could simply be that Sabre is lightening the load placed on Travelocity in terms of operational costs in return for a simpler model (and improve the balance sheet at parent company level).
It is the third significant piece of business development at Travelocity in the space of a few months following the sale of the Travelocity for Business corporate travel division to BCD Travel in June.
Kevin May is editor and a co-founder of Tnooz. He was previously editor of UK-based magazine Travolution for nearly four years and web editor of Media Week UK from 2003 to 2005.
He has also worked in regional newspapers (Essex Enquirer) and started his career in journalism at the Police Gazette at New Scotland Yard in London. He has a degree in criminology and a postgraduate diploma in magazine journalism.