ELECTRONIC RESERVATION DISTRIBUTION in today’s World and where does it fit

1. ELECTRONIC RESERVATION DISTRIBUTIONin today’s Worldand where does it fit What exactly is it?

2. EDS • The EDS is composed of two major components: • The GDS or Global Distribution System. A means of electronic booking airlines seats, car hire hotel rooms and ship cruises only by Travel Professionals (mostly agents) • The IDS or Internet Distribution System. A means of booking the above services by chanelling potential end user bookers (self bookers) via the existing GDS or directly through the Internet system.

3. Graphic overview of the EDS Call Center Travel Agents eCommerce Internet Distribution Web Sites Web Sites Travel Portals • Inbound Voice • Outbound Voice • Private Label • Full-Time Reservation Outsourcing • Overflow and After-Hours Calls • Traveler’s Support Desk Brick & MortarAgencies Others… Hotels, Resortsand Chains Associations, Membershipsand Destinations Online Agencies Partners include AOL, Yahoo,Verizon, Delta, 100+ Convention Bureaus, 40+ Hotel Lodging Assocsand 30 StateTourism Bureaus. Direct Connect Next Generation Seamless GDS Connectivity INCLUDING Automatic Rate, Availability, and HOD Content Updates and Distribution Internet Distribution System(“IDS”) Connectivity INCLUDING Rate, Availability, and Allotment Updates and Distribution Hosted Web Siteand Travel Portals INCLUDING Internet Marketing Call Center Reservation and Support Services Integrated Single Databasewith Single Image Inventory ReservationDelivery viaXML Interface,Email or Fax Rates, Allotments and HOD Content via core Extranet ReservationDelivery via Emailor Fax Rates, Allotments and HOD Content via core Extranet Hotels with epitome PMS Hotels with 3rd Party PMS Hotels without a PMS

4. Major TRAVEL DISTRIBUTION CompaniesWho owns who?? • Primary GDS Partners are WorldSpan and Sabre • SOURCE: PhoCusWright Inc.

5. Leading PLAYERS in the Game * Representation company only which utilizes a 3rd party CRS

6. FACTS about Electronic Distribution • In2005, approximately 32 million US households used the Web to buy leisure travel, for which they will spend approximately$64 billion. • By2009, this will reach 46.4 million US households, spending nearly$111 billion. Vacation packages, cruises, and hotels are poised for the greatest growth. SOURCE: Forrester’s Consumer Technographics North American Travel Online Study

7. Online Traveler’s PROFILE • The typical Booker has been buying online for 3.3 years, and while they buy 60% of their trips online, that still leaves a solid chunk bought offline. • Middle aged adults, almost evenly divided among men and women. • Well educated, upper-middle income earners – the average household income of $80,361/year. • They travel regularly, spending $3,484/year on leisure travel. • They stay at hotels 2.8 times/year for leisure trips.

8. FACTS about Online Travelers • Online long-haul leisure travelers – online leisure travelers who have taken a trip outside the continentalUS in the past 12 months – represent 25% of online leisure travelers. These travelers earn more, travelmore often, and spend more than other online leisure travelers. They also view the Web as an integralpart of their travel planning and purchasing process. Web agencies top the list of where onlinelong-haul travelers research and buy leisure travel, but these travelers will continue to rely on both onlineand offline sources – and will continue to reveal the nuances when it comes to price.

9. FACTS about Online Travelers • Vacation home (timeshare) travelers – leisure travelers who own or consistently rent a vacation home – represent more than 8% of online leisure travelers. This group is older and wealthier than travelers without vacation homes, but despite their age, they show a surprising proclivity for online booking: 74% of vacation home travelers book travel online. Travel companies should not ignore this group, because despite having a fixed leisure destination, they actually take other types of trips more frequently than other leisure travelers.

10. FACTS about Online Travelers • Y generation online leisure travelers – young adults age 18 to 24 – are influencing massive changes in how travel is distributed, marketed and sold. That’s because this is the first true “Web generation” of travelers – a group that, as a whole, ignores offline points of sale and has no brand loyalty. This group is more likely to fly than older travelers and to use alternative places to stay, such as home or condo rentals. To earn this sophisticated, active, yet cynical group’s business, travel marketers must track travelers as they age over time, create or build up eventsto satisfy their thirst for appointment travel, and rethink their loyalty programs to bond with travelers beforethey start to think about “brand loyalty”.

11. UNDERSTANDING the Various Booking Optionsfor Travelers

12. OPTION 1: The TELEPHONE

13. The TELEPHONE • Call Hotel’s Sales or Reservations Office Direct

14. The TELEPHONE • Call Hotel’s Sales or Reservations Office Direct • Call Hotel’s Central Reservations Office

15. The TELEPHONE • Call Hotel’s Sales or Reservations Office Direct • Call Hotel’s Central Reservations Office • Call Travel Agent

16. The TRAVEL AGENT Approximately 185,000 Travel Agencies Worldwide Representing over 800,000 Travel Agents

17. FACTS about Travel Agents • Approximately 92 million hotel room nights were booked by Travel Agencies in 2005. • Brick and Mortar Agencies generated 80.6% of all GDS bookings. • 19.4% of all GDS bookings were through GDS powered Web sites. • The average rate for room nights booked through Travel Agents was 31.2% higher than the average rate for room nights booked via the Internet. SOURCE: TravelCLICK eMonitor

18. TRAVEL AGENT Hotel Bookings - 2004 SOURCE: TravelCLICK eMonitor

19. Performance by MARKET SEGMENT SOURCE: TravelCLICK eMonitor

20. GLOBAL DISTRIBUTION SYSTEMS Hotels RentalCars Airlines Cruises

21. GLOBAL DISTRIBUTION SYSTEMS – Amadeus • Founded in 1987 by Air France, Iberia, Lufthansa, and SAS, Amadeusis the youngest of the four GDS companies. • Large European Representation. • Comprehensive data network and database, among the largest oftheir kind in Europe, serve more than 57,000 travel agency locations and more than 10,500 airline sales offices in some 200 markets worldwide. 400 airlines, 55,000 hotel properties, 52 car rental companies, 9 cruise lines, 33 railroads, and 229 tour operators. • Provides access to approximately 58,000 hotels and 50 car rental companies serving some 24,000 locations. • Having acquired e-Travel, Inc. from Oracle Corporation in July of2001, Amadeus now has a new business unit dedicated to delivering solutions to e-commerce players worldwide.

22. GLOBAL DISTRIBUTION SYSTEMS – Galileo • Galileo International was founded in 1993 by 11 major North American and European airlines. • North America, Europe, the Middle East, Africa, and the Asia/Pacific region. • October of 2001, Cendant Corporation acquired Galileo International for approximately $1.8 billion in common stock and cash. • Serves travel agencies at approximately 45,000 locations. • 500 airlines, 227 hotel companies, 33 car rental companiesand 368 tour operators.

23. GLOBAL DISTRIBUTION SYSTEMS – Sabre • Sabre was founded in the mid 1960’s by 4 major North American Airlines... most predominantly American Airlines. • Represented in 45 countries, is a leading provider of technology for the travel industry. • In July of 1996, Sabre became a separate legal entity of AMR (parent company of American Airlines). • Sabre connects more than 60,000 travel agency locations around the world. • 400 airlines, 55,000 hotel properties, 52 car rental companies,9 cruise lines, 33 railroads, and 229 tour operators.

24. GLOBAL DISTRIBUTION SYSTEMS – WorldSpan • Founded February 7, 1990, Worldspan was originally owned by affiliates of Delta Air Lines, Inc., Northwest Airlines, and TWA. • Worldspan has successfully developed the strategies, solutions, and services to ensure the company’s long-term success in the new web-based world of travel distribution. • Datalex is a large partner, thus enhancing it’s web direction. • Worldspan currently serves 20,021 travel agencies in nearly 90 countries and territories. • Worldspan connects approximately 421 airlines, 210 hotel companies, 40 car rental companies, 39 tour and vacation operators, and 44 special travel service suppliers.

25. New GDS provider “Luftonav” • In March Lufthansa announced that they will join G2 switchworks and ITA software as a preferred supplier to provide an alternative access platform to Star Alliance airlines. • These airlines include: • Air Canada, Air New Zealand, ANA, Austrian, bmi, LOT • Lufthansa, SAS, Singapore, TAP, Thai, United, US Air, Varig • Reading through the press announcement in small print you can see that this is a joint development by Navigant (owns TQ3), Amex and Carlson. • More choice in fact means more global players having a piece of the action across all their spheres of corporate influence

26. GDS Travel Agency Installations by REGION

27. TRAVEL AGENT Reservations SWITCH (WizCom orPegasus) Travel Agency CRS CRS Hotels, Resorts and Inns

28. GDS SWITCH COMPANIES PURPOSE:To pass the data between the GDSs and the Central Reservation Systems (and Offices) and to reduce the costs of individual connections to each GDS. These switches levy approx. $1 pre transaction. PegasusSolutions • Founded in 1989 by16 hotel companies and offers the UltraSwitch communication link • Originally known as THISCO WizComInternational • Began in 1987 to provide GDSand reservation services • Subsidiary of Cendant

29. TRAVEL AGENT Reservations SWITCH (WizCom orPegasus) Travel Agency CRS CRS Hotels, Resorts and Inns

30. Type B (or teletype) connections work via ARInc or SITA data communications lines and can be compared to sending a fax -- you know your message has been received but have to wait for a response. Type B connectivity allows for greater speed and convenience for travel agents over manual processing. With Type B links, the confirmation number is updated in the PNR and placed in the travel agent’s queue generally within minutes to a few hours after completing the reservation depending on the hotel company’s operational procedures. The travel agent has to complete the hotel booking request, end the transaction and re-display the PNR (pseudo city code) to determine if the reservation has been confirmed. Type B communication is used as a “fall-back” procedure for hotel companies using Type A processing when a Type A link is down for maintenance, for example. On occasion, every hotel company that uses Type A links will revert to Type B. This explains why it is possible to receive confirmation numbers immediately during one transaction while for another atthe same hotel there is anlonger confirmationdelivery time. GDS CONNECTIVITY Types Type B Processing Why it matters to a TA

31. Type A connections use a dedicated telephone line and provide interactive confirmation processing. It can be compared to talking to someone on the telephone -- you send your message and receive a reply almost immediately without having to end the record. Type A connectivity works in “real time”. It provides an immediate response allowing travel agents to receive their hotel reservation confirmation number within about 7 seconds. Advantages of Type A Connectivity: Confirmation speed – about 7 seconds or less Interactive processing and error response GDS CONNECTIVITY Types Type A Processing Why it matters to a TA

32. Seamless connectivity is an advanced connection for displaying interactive data. Reservation processing is still Type A, but the messaging standards are newer and more efficient. Additionally, interactive modifications and cancellations are usually included in this level of connectivity. Seamless connectivity allows much of the room description, rate, booking rules and availability data displayed to a travel agent through their GDS to be gathered directly from the hotel company’s central reservation system. Advantages of seamless connectivity: Viewing information drawn directly from CRS Confirmation speed Real-time information More information and moreaccurate information Information is less cryptic – more user friendly language GDS CONNECTIVITY Types Seamless Processing Why it matters to a TA

33. Also known as “NGS”, this technology enhances and is built upon classic Seamless Connectivity to allow seamless data to be displayed on the multi-property, hotel list and availability displays. Next Generation Seamless products make the ‘shopping’ displays in GDSs more accurate with real time seamless data and aids the selection process thus improving the first step in the shopping/booking process in GDS. GDS CONNECTIVITY Types Next Generation Seamless Why it matters to a TA • Each GDS has its own name for their NGS Product: • Amadeus – Dynamic Access • Galileo – Inside Shopper • SABRE – Direct Connect Shopper • WorldSpan – Integrated Source

34. ADVANTAGES of Next Generation Seamless Connectivity • Real-time information on the first hotel availability displays • Alleviates misinformation between the multi-hotel availability displays and single hotel displays • Saves time by making appropriate hotel selections from the multi-hotel availability display • Saves time by manipulating the multi-hotel availability displays to users specific hotel requests/requirements RESULTING in an average sales increase of 30% versus seamless connected CRS

35. TRAVEL AGENT Reservations SWITCH (WizCom orPegasus) Travel Agency CRS CRS Hotels, Resorts and Inns via Interface, EMail Communication or Fax

36. TOP 10 GDS Cities Worldwide The top 10 worldwide destination markets in room nights for GDS and Pegasus third-party powered websites, in order, were: SOURCE: TravelCLICK 3Q2005

37. OPTION 2: The INTERNET Over 15,000 Sites and Portals

38. WHY Leisure Travelers Bookat Their Favorite Sites • The ease of shopping online makes it hard for travel companies to develop site loyalty –just one in three US online leisure Bookers have a Web site they regularly use to buy their leisure travel. Nearly all Bookers with a favorite site use it because they have previously visited it,but the strength of familiarity isn’t enough to sustainthe relationship –low prices, immediate email confirmations, and ease of use also matter. These travelers are valuable, as they spend more and take more trips than Bookers without favorite sites. To win them, entice them with both quality and price: Bookers witha favorite site are just as likely to indulge in travelas pick the lowest price.

39. The INTERNET • Brand Sites71.4% of Internet Bookings

40. WHY a Best Available Rate? • Over the past two years, best available rates have become part of the travel industry landscape, primarily among hotels.Do they work? Yes, once Web travelers make sure they’re not just marketing fluff. In fact,more than 2 in 10 US leisure travelers are fervent Best Rate supporters. Supporters are brand loyal but – ironically – prefer to buy from Web agency sites.Best Available Rate help suppliers keep existing market share and can be used to steal share from intermediaries. But Web agencies can also benefit from Best Available Rates – by stealing business from other Web agencies rather than alienating suppliers.

41. The INTERNET • Brand Sites (71.4%) • Retail Sites12.5% of Internet Bookingsalso referred to as “Online Travel Agencies”

42. The INTERNET • Brand Sites (71.4%) • Retail Sites (12.5%) • Merchant Sites8.6% of Internet Bookings

43. SHARE of Channel Bookings SOURCE: TravelCLICK eTRAK

44. The INTERNET • Brand Sites (71.4%) • Retail Sites (12.5%) • Merchant Sites (8.4%) • Opaque Sites 7.5% of Internet Bookings

45. SHARE of Channel Bookings SOURCE: TravelCLICK eTRAK

46. WHO gets WHAT from WHERE and HOW?

47. WHO gets WHAT from WHERE and HOW?

48. RESERVATION SOURCESfor Major Hotel Brands CROs – 2004 SOURCE: TravelCLICK eTRAK

49. RESERVATION SOURCES for Total Hotel Bookings

50. Electronic Distribution… ANY HOTEL Can Play Sample RATE STRUCTURE * Based on 2.5 average length of stay