Score one for Travelocity, lastminute and Zuji, but at what price?
Travelocity Global, which includes the three brands and others, signed a new multi-year agreement with Hilton Worldwide, which means the Travelocity online travel agencies in North America, Asia Pacific and Europe will have continued access to Hilton's 3,800 properties, divided into 10 brands in 88 countries.
With the new pact, Travelocity can boast of an edge over Orbitz Worldwide, which failed to reach an agreement to renew its Hilton contract in March and has seen its merchant inventory go missing on Orbitz consumer sites since that time.
Although it is working on a turnaround, Travelocity has fallen on tough economic times over the last three years.
The question therefore arises: Did Travelocity cut a financial deal with Hilton that Orbitz wouldn't stomach?
Noreen Henry, senior vice president of global partner services at Travelocity, says:
The scuttlebutt is wrong. We can't discuss terms, but I will say that we were able to strike a creative deal, beneficial to both sides that we are happy with and strengthens our long term partnership.
On where things stand between Orbitz and Hilton, Orbitz spokesperson Chris Chaimes says: "We remain in discussions with Hilton on a preferred supplier agreement, but at the moment, distribution of Hilton properties is rather limited on our consumer brands."
Orbitz Worldwide commented in a Securities and Exchange Commission filing in May about the impasse with Hilton Worldwide:
While we do not believe the situation with Hilton will have a material impact on our business, if we are unable to reach a new agreement with Hilton or replace Hilton bookings with bookings of other hotels, or if our relationships with other major hotel chains also deteriorate, it could reduce our access to hotel inventory; put us at a competitive disadvantage relative to other OTCs; reduce our ability to attract or retain corporate customers; and/or have a material adverse effect on our business.
In conjunction with the announcement about the new Travelocity-Hilton agreement, the companies state that Hilton this week began connecting to Travelocity through a Travelocity Connect API, which enables properties to manage rates, inventory and availability.
Travelocity Connect also has a developers portal, which Travelocity states enables hotels "to integrate complex real-time property and booking data."
Eduardo Schutte, Hilton's vice president of distribution and channel management, declined to specify the terms of the Hilton Worldwide deal with Travelocity, but says the two parties crafted a deal "beneficial to both sides" that "strengthens our long-term partnership."
Of the Travelocity deal, Schutte says:
This leading shopping and booking channel complements our distribution strategy and global reach by helping us tap primarily into leisure travelers who like to shop several outlets before booking.
Those are curious words in an announcement about a new content deal with a specific online travel agency, but Schutte acknowledges that many consumers don't book on Hilton websites and like to navigate around doing some comparison shopping before booking.
He adds: "The online travel agencies -- and Travelocity is no exception -- have strong connections with leisure audiences, which is appealing to us."
Asked where things stand with Expedia, Priceline and Orbitz, Schutte says:
Hilton Worldwide plans to continue working with OTAs, such as Expedia and Travelocity. In addition, Hilton Worldwide recently partnered with Choice, Hyatt, IHG, Marriott and Wyndham to build the first hotel search engine built by hoteliers – www.roomkey.com. It is designed to save consumers time and provide confidence in their selection through convenient access to comprehensive hotel information and relevant pricing data, and has the ability to book directly with the hotel to get the chosen room and earn points.