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

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.

Graphic overview of the EDS Internet Distribution Direct Connect Partners include AOL, Yahoo, Verizon, Delta, 100+ Convention Bureaus, 40+ Hotel Lodging Assocs and 30 State Tourism Bureaus. eCommerce Web SitesTravel PortalsWeb Sites Hotels, Resorts and Chains Associations, Memberships and Destinations Call Center Inbound Voice Outbound Voice Private Label Full-Time Reservation Outsourcing Overflow and After-Hours Calls Traveler’s Support Desk 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 Site and Travel Portals INCLUDING Internet Marketing Call Center Reservation and Support Services Travel Agents Online Agencies Others… Brick & Mortar Agencies Integrated Single Database with Single Image Inventory Reservation Delivery via XML Interface, or Fax Rates, Allotments and HOD Content via core Extranet Reservation Delivery via or Fax Rates, Allotments and HOD Content via core Extranet Hotels with epitome PMS Hotels with 3 rd Party PMSHotels without a PMS

Major TRAVEL DISTRIBUTION Companies Who owns who?? GDSLeisureCorporateAffiliate Travel Agency Time Share DSP Galileo, WizCom Switch CheapTickets, Lodging.com, Orbitz Travelport, Orbitz for Business Lodging.com, Neat Group Thor Consortium RCI WizCom, Trust Int’l, Shepherd Systems Sabre Travelocity, Site59, Travelchannel Travelocity Business, GetThere Travelocity Partner, Travelocity, Site59, Nexion World Choice Travel None SynXis, Sabre Distribution Technologies None (1) Expedia, Hotels.com, Hotwire, Anyway.com, TV Travel Shop Expedia Corporate, Metropolitan Travel, Egencia WWTE, Expedia, Hotels.com Classic Custom Vacations Interval Int’l Newtrade Technologies Amadeus OneTravel.com, Eviaggi.com, Opodo e-TravelOneTravel.comVacation.comNone Pegasus Switch HotelBook.com, TravelWeb.com None Online Distribution Database (ODD) Commission Processing Services None Utell, Unirez, Pegasus Solutions (1) Primary GDS Partners are WorldSpan and Sabre SOURCE: PhoCusWright Inc.

GDSSwitch Central Reservation Systems, CRO’s and Representation Firms Internet SitesOthers in Play AmadeusPegasus Hotel Information Systems Sceptre*Expedia.comDatalex GalileoWizComChouinard & MyhreSupranationalGetThere.comGoogle SabreColumbus ReservationsSynXisHotels.comHBS WorldSpanGenaResTravelCLICK*Hotwire.comLanyon Historic Hotels *TRUST InternationalOrbitz.comMICROS Fidelio iHotelierUniResPlacesToStay.comNewmarket Innlinks*Utell*Priceline.comRamesys InnPoints*Vantis*Site59.comRevelex Kerry Hotels*WORLD Hotels*TravelWeb.comVAS Leading Hotels*Travelocity.comYahoo LUXE HotelsTravelscape.com PegasusTrip.com Preferred Hotels*WorldRes.com Leading PLAYERS in the Game * Representation company only which utilizes a 3 rd party CRS

FACTS about Electronic Distribution In 2005, approximately 32 million US households used the Web to buy leisure travel, for which they will spend approximately $64 billion. By 2009, 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

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.

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

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.

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 events to satisfy their thirst for appointment travel, and rethink their loyalty programs to bond with travelers before they start to think about “brand loyalty”.

UNDERSTANDING the Various Booking Options for Travelers

OPTION 1: The TELEPHONE

The TELEPHONE 1. Call Hotel’s Sales or Reservations Office Direct

The TELEPHONE 1. Call Hotel’s Sales or Reservations Office Direct 2. Call Hotel’s Central Reservations Office

The TELEPHONE 1. Call Hotel’s Sales or Reservations Office Direct 2. Call Hotel’s Central Reservations Office 3. Call Travel Agent

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

FACTS about Travel Agents Approximately 92 million hotel room nights were booked by Travel Agencies in 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

TRAVEL AGENT Hotel Bookings Room NightsPct. GrowthAvg. Daily RatePct. Growth Travel Agent Component92,172,3425.7%$ % Consumer Internet Component 22,209, %$ % Total GDS & Pegasus Hotel e-Commerce 114,381,7097.5%$ % SOURCE: TravelCLICK eMonitor

Market SegmentRoom NightsPct. GrowthAvg. Daily RatePct. Growth Luxury2,513, %$ % Upscale33,577,3103.4%$ % Mid-Scale39,588,2186.3%$ % Budget7,501,8691.9%$ % Performance by MARKET SEGMENT SOURCE: TravelCLICK eMonitor

Hotels Rental Cars Airlines Cruises GLOBAL DISTRIBUTION SYSTEMS

GLOBAL DISTRIBUTION SYSTEMS – Amadeus Founded in 1987 by Air France, Iberia, Lufthansa, and SAS, Amadeus is the youngest of the four GDS companies. Large European Representation. Comprehensive data network and database, among the largest of their 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 of 2001, Amadeus now has a new business unit dedicated to delivering solutions to e-commerce players worldwide.

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 companies and 368 tour operators.

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.

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.

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

GDS Travel Agency Installations by REGION

TRAVEL AGENT Reservations SWITCH (WizCom or Pegasus) CRS Travel Agency Hotels, Resorts and Inns

WizCom International Began in 1987 to provide GDS and reservation services Subsidiary of Cendant 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. Pegasus Solutions Founded in 1989 by16 hotel companies and offers the UltraSwitch communication link Originally known as THISCO

TRAVEL AGENT Reservations SWITCH (WizCom or Pegasus) CRS Travel Agency Hotels, Resorts and Inns

GDS CONNECTIVITY Types 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 at the same hotel there is an longer confirmation delivery time. Type B ProcessingWhy it matters to a TA

GDS CONNECTIVITY Types 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 Type A ProcessingWhy it matters to a TA

GDS CONNECTIVITY Types 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 more accurate information Information is less cryptic – more user friendly language Seamless ProcessingWhy it matters to a TA

GDS CONNECTIVITY Types 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. Next Generation SeamlessWhy 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

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

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

Room Nights% ChangeADR% Change New York1,309,5734.1%$ % Los Angeles1,070,8623.2%$ % San Francisco/Oakland/San Jose968,0822.7%$ % Washington/Baltimore965,6323.1%$ % Chicago816,2594.8%$ % London783,4721.4%$ % Dallas579,3128.3%$ % Atlanta542,3282.9%$ % Boston499,2964.8%$ % Houston417,3685.2%$ % The top 10 worldwide destination markets in room nights for GDS and Pegasus third-party powered websites, in order, were: TOP 10 GDS Cities Worldwide SOURCE: TravelCLICK 3Q2005

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

WHY Leisure Travelers Book at 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 sustain the relationship – low prices, immediate 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 with a favorite site are just as likely to indulge in travel as pick the lowest price.

The INTERNET 1. Brand Sites 71.4% of Internet Bookings

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.

The INTERNET 1. Brand Sites (71.4%) 2. Retail Sites 12.5% of Internet Bookings also referred to as “Online Travel Agencies”

The INTERNET 1. Brand Sites (71.4%) 2. Retail Sites (12.5%) 3. Merchant Sites 8.6% of Internet Bookings

SHARE of Channel Bookings Share of Internet Bookings Share of Channel Bookings Pct. Change over 2003 Merchant Sites8.6%100.0%9.0% Expedia3.0%35.4%5.0% Hotels.com2.6%30.5%-15.8% Travelocity1.7%19.2%109.3% Orbitz0.8%9.4%-0.5% TravelWeb0.3%4.0%24.5% Lodging.com0.1%1.5%n/a SOURCE: TravelCLICK eTRAK

The INTERNET 1. Brand Sites (71.4%) 2. Retail Sites (12.5%) 3. Merchant Sites (8.4%) 4. Opaque Sites 7.5% of Internet Bookings

SHARE of Channel Bookings Share of Internet Bookings Share of Channel Bookings Pct. Change over 2003 Opaque Sites7.5%100.0%16.0% Priceline5.8%77.8%16.6% Hotwire1.7%22.2%14.1% SOURCE: TravelCLICK eTRAK

WHO gets WHAT from WHERE and HOW? SiteSource Travelocity.comSabre Expedia.comWorldSpan/Pegasus/Own Extranet/PMS I-face Orbitz.comPegasus CheapTickets.comGalileo Hotwire.comPegasus PlacesToStay.comWorldRes Hotels.comFax/Own Extranet/PMS I-face Priceline.comWorldspan

WHO gets WHAT from WHERE and HOW? SiteMiddlemanSource Yahoo.comTravelocitySabre AOL.comTravelocitySabre Earthlink.comExpediaWorldspan/Own Extranet/PMS I-face MSN.comExpediaWorldspan/Own Extranet/PMS I-face Lycos.comOrbitzPegasus AltaVista.comOrbitzPegasus Excite.comExpediaPegasus Passkey.comHotel Direct GetThere.comSabre

CRO Hotel BookingsPct. Of 2004 ResPct. Of 2003 ResPct. Change Brand Websites21.9%18.1%21.5% Retail Websites3.8%4.3%–11.1% Merchant Websites2.6%2.2%22.3% Opaque Websites2.3%2.6%– 12.3% TOTAL INTERNET30.7%27.1%13.1% GDS Travel Agent35.3%36.5%– 3.3% TOTAL ELECTRONIC66.0%63.6%3.7% Voice34.0%36.4%– 6.5% TOTAL FOR CROs100.0% SOURCE: TravelCLICK eTRAK RESERVATION SOURCES for Major Hotel Brands CROs – 2004

RESERVATION SOURCES for Total Hotel Bookings CRO Hotel BookingsPct. Of CRO ResPct. Of Total Res Hotel Website21.9%9.1% Retail Websites3.8%1.8% Merchant Websites2.6%1.2% Opaque Websites2.3%1.1% TOTAL INTERNET30.7%13.2% GDS Travel Agent35.3%16.8% TOTAL ELECTRONIC66.0%30.0% Voice34.0%17.5% TOTAL FOR CROs100.0%47.5% Hotel Direct--52.5% TOTAL HOTEL BOOKINGS %

Sample RATE STRUCTURE Rate TypeChannel Sell Price per night DSP Fee (per res) Travel Agent Merchant Net Revenue* ADR (net) Retail (unrestricted)Direct Call$100N/A $250$100 Retail (unrestricted) GDS/Travel Agent $120$10 (avg)$30N/A$260$104 Retail (unrestricted)Own Website$85$5 (avg)N/A $208$83 Retail (restricted; prepay)Own Website$75$5 (avg)N/A $183$73 Merchant Net – 25% markup (restricted; $25 cancel fee) Third Party Internet $98$10 (avg)N/A$50$185$74 Merchant Net – 18% markup (restricted; $25 cancel fee) Third Party Internet $87$10 (avg)N/A$30$178$71 Opaque – part of packageOwn Website $75 (factor) $5 (avg)N/A $183$73 Opaque – part of package or brand opaque Third Party Internet $75 (factor) $10 (avg)N/A $178$71 Electronic Distribution… ANY HOTEL Can Play * Based on 2.5 average length of stay

Major TRAVEL DISTRIBUTION Companies Who owns who?? GDSLeisureCorporateAffiliate Travel Agency Time Share DSP Galileo, WizCom Switch CheapTickets, Lodging.com, Orbitz Travelport, Orbitz for Business Lodging.com, Neat Group Thor Consortium RCI WizCom, Trust Int’l, Shepherd Systems Sabre Travelocity, Site59, Travelchannel Travelocity Business, GetThere Travelocity Partner, Travelocity, Site59, Nexion World Choice Travel None SynXis, Sabre Distribution Technologies None (1) Expedia, Hotels.com, Hotwire, Anyway.com, TV Travel Shop Expedia Corporate, Metropolitan Travel, Egencia WWTE, Expedia, Hotels.com Classic Custom Vacations Interval Int’l Newtrade Technologies Amadeus OneTravel.com, Eviaggi.com, Opodo e-TravelOneTravel.comVacation.comNone Pegasus Switch HotelBook.com, TravelWeb.com None Online Distribution Database (ODD) Commission Processing Services None Utell, Unirez, Pegasus Solutions (1) Primary GDS Partners are WorldSpan and Sabre SOURCE: PhoCusWright Inc.

Graphic overview of the EDS Internet Distribution Direct Connect Partners include AOL, Yahoo, Verizon, Delta, 100+ Convention Bureaus, 40+ Hotel Lodging Assocs and 30 State Tourism Bureaus. eCommerce Web SitesTravel PortalsWeb Sites Hotels, Resorts and Chains Associations, Memberships and Destinations Call Center Inbound Voice Outbound Voice Private Label Full-Time Reservation Outsourcing Overflow and After-Hours Calls Traveler’s Support Desk 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 Site and Travel Portals INCLUDING Internet Marketing Call Center Reservation and Support Services Travel Agents Online Agencies Others… Brick & Mortar Agencies Integrated Single Database with Single Image Inventory Reservation Delivery via XML Interface, or Fax Rates, Allotments and HOD Content via core Extranet Reservation Delivery via or Fax Rates, Allotments and HOD Content via core Extranet Hotels with epitome PMS Hotels with 3 rd Party PMSHotels without a PMS