1. ChannelManager Training March 2004

2. Overview of the Product’s Vision & Value Proposition

3. 3 Overview of the Merchant Model in the Industry Points of Contention between Merchants and Hotels:  Merchants getting stronger by the minute. Consolidation is enhancing their strength  Leverage over contractual pricing and terms  Hotels lost control of pricing, merchandising and customer interaction  Brand equity and customer loyalty dilution  Competition for on-line buyers  Managing multiple Merchant Extranets is too time consuming

4. 4 Hotels’ Reaction to the Merchant Model  Focus on their own site  Rate Parity  Enhance Loyalty Programs  Focus on Revenue Management  Smarter Contracts  Fixed margins  Key word control clauses

5. 5 The Old Model Last Minute Hotel Property Net Rates & Inventory ExpediaOpodo Proprietary Extranet Proprietary Extranet Proprietary Extranet Net Rates & Inventory Manual input

6. 6 The New Model Hotel Property Net Rates & Inventory Proprietary Extranet Proprietary Extranet Proprietary Extranet Manual input Emulation Channel Management Platform Retail.com Merchant.com Retail.com Destination.com Reservation Count

7. 7 A few notes on our technology  Interfacing with the Extranets using a technology called “web emulation” or “web wrapping”. Same technology used for RateView  Using XML language to export data with the Extranets and to get information back from them (reservation counts)

8. 8 Value Proposition Cost Savings Incremental Revenues Strategic Implications Different audiences and components of the Value Proposition Audience GMs DOSs DRMs Owners

9. 9 Value Proposition Incremental Revenues:  Sell different rate and room types to tap into other segments with different price sensitivities  Work with a greater number of on-line distributors  Avoid unwanted closures by using the auto-allotment feed (Allocation Optimiser)

10. 10 Value Proposition Cost Savings:  Manage multiple sites by using one single interface  Reduce the DRM’s opportunity cost (salary and incremental revenues)  Avoid Rate Parity Penalties  Enhance the value of RateView by using it in conjunction with CHM

11. 11 Value Proposition Strategic Value:  Reduce Commercial risk by working with more sites. Don’t put all your eggs in the same basket  Regain control of pricing by implementing Rate Parity  Avoid channel cannibalization by protecting your own site’s integrity  Increase the exposure of retail rates on the Web  Diminish the distributors’ leverage  Stimulate competition  Level the playing field

12. 12 Value to TravelCLICK  Future integration of CHM with iHotelier  Establish a position between the merchants and the hotels  Position ourselves as the hotels’ agents  Leverage our position over the merchants  Better cooperation (direct links)  Synergies between CHM and other TC products will create competitive barriers

13. Beta Test

14. 14 Beta Update  Beta began early March and will run through April  Beta hotel responsibilities : testing functionality and providing enhancement recommendations  Hotels in beta offered a complimentary 12 month subscription  Feedback from participating hotels has been positive – Channel Manager is creating operational efficiencies in the process of managing merchant extranet sites  “I love the fact that I put in the sell rate and the net rate is calculated” Joel Lillegraven – Holiday Inn Harborview / Sunstone Hotels

15. 15 Identify Targets  Internet Players  Hotels managing multiple sites or with the potential to do so  Hotels in markets where on-line distributors are generating significant traffic  RateView Subscribers  Weaker Brand Hotels  Stronger brands are building direct connects with Expedia or other merchant  Hotels needing to comply with Rate Parity strategies  Hotels that need to diversify their distribution portfolio  Clients using EZ Yield  Do not offer iHotelier and CHM within the same four month period Pre-call

16. 16 Call Preparation, the Value $50k salary x 20% of the RM’s time=$833 250 room hotel @ 70% occupancy @$175 ADR generates $918,759 in revenue a 2% increase due to better Revenue Management would yield incremental revenues of=$18,375 4 Suites per month (incremental) @$200 (2 night stays)= $1,600 3 new sites to the distribution portfolio Four reservations from each site @ $150 (2 night stays)=$3,600 1 3 4 2 $24,408 * per month $292,896* incremental revenues per year + Strategic Value What’s the value of CHM to this hotel? Pre-call

17. 17 Value Calculator Pre-call

18. Functionality

19. 19 Two Components to CHM ChannelManager has two key features that enable hotels to regain control of pricing and inventory: Price Point Manager Functionality provides hotels with the ability to:  Easily maintain contracted allotments  Implement pricing across multiple websites with one click  Load multiple Room and Rate types Functionality provides hotels with the ability to:  Set thresholds to trigger additional inventory to maintain availability.  Establish cross-channel selling limits Allocation Optimiser

20. 20 Logging-in to Channel Manager Clients access Channel Manager by logging in to the EMC on www.travelclick.net

21. 21 Channel Manager on the EMC

22. 22 Room Manager Enables Hotels to Sell Multiple Room Types on the Extranet Sites

23. 23 CHM Provides Hotels With The Ability to Easily Sign Up for New Sites

24. 24 Allotment Characteristics Alert Users if Changes Violate Merchant Contract Rules

25. 25 Pricing Characteristics Calculate Net Rates & Review Pricing Adjustments

26. 26 Contracted Cutoff Dates are Setup by Channel as a Default Setting Users can modify these settings by day in the Room Allotment Calendar

27. 27 Extranet Access Info Required to Implement Pricing and Allotment Changes Booking Updates pull in data from the extranet sites

28. 28 Validation Rules is a Mechanism to Guard Against Data Entry Errors

29. 29 Pricing Control Provide Hotels With Two Rate Parity Options Consumer Rate Parity Net Rate Parity

30. 30 Create Multiple Rate Categories to Yield Higher Net Rates

31. 31 Offers Users Date Range and Calendar View Date Range View is an efficient way for a hotel to enter consistent pricing over an extended period of time

32. 32 Calendar View Net Rate Calculator Easy access to RateView Efficient way to change rates on individual days

33. 33 Net Rate Calculator Hotels employing a consumer rate parity strategy can easily change rates by entering one rate. CHM will calculate the appropriate net rates and load them into the extranets.

34. 34 Managing Room Allotments in Channel Manager Displays Availability on each channel Modify channel availability Modify channel restrictions

35. 35 Avoids sellouts by allocating inventory to sites based on Sales performance Contract: Contracted allotment. Above: Maintain availability in sites by distributing additional inventory Threshold: Determine when to distribute inventory to merchant sites. Creates efficiencies in managing extranet availability Allocation Optimiser

36. 36 Sales Limits – Force Web Distributors to Compete for Availability Allocation Optimiser

37. 37 Inventory Monitor – Provides Hotel With Snapshot of Bookings

38. 38 Inventory Monitor Booking Totals

39. 39 Inventory Monitor Booking Pace

40. Internet Coverage

41. 41 Strategy  Provide Hotels with wide Internet distribution capabilities  Help hotels to diversify their distribution portfolio and to level the playing field  Intelligent addition of sites to provide coverage across:  Merchant Sites  Retail Sites  Destination Portals  CVB Sites  We want to work with smaller sites, but many of them don’t drive significant business  Why? How can ChannelManager help them?

42. 42 The Affiliate Program Concept Affiliate Program:  Allows any site to co-brand or private label a booking engine from one supplier or from a network  All reservations generated through the site are tracked, reported and commissions paid for them

43. 43 Affiliate Programs Largest Affiliate program part of IAN.com (thousands) Frommers, Amtrak, America West, etc Not a very strong program starting to put focus on it EarthLink, Knight-Ridder.com, Fodors.com, JetBlue, etc A lot of emphasis in the affiliate program -WWTE- Doesn’t have an Affiliate program Fairly strong Program

44. 44 Current CHM Coverage  The top sites cover close to ¾ of the total on-line activity

45. 45 Share of Web Visits (traffic)ate 72%

46. 46 Bottom Line……  As shown in the previous graph, if a hotel plays with IAC, Travelocity (via Saber, the merchant model is still small), Orbitz and Cendant (Lodgning / Cheap tickets) it covers 72% of the web’s exposure window  Because the on-line travel industry is highly concentrated (80% of the business is generated by 20% of the sites) the Web coverage we can provide is as good as EZ Yield’s  Getting incremental coverage requires the addition of a significant number of sites

47. 47 Our Premium Based on :  Local Support (DOSs)  HOU/BCN product-specific Support  HOU/BCN Revenue Management Consultative Support  Scalability of our system (integration with RV, iH, etc), EZY is a dead end  Sound development process translates into a more reliable product  Working with a sound and reputable company? Priceless!!  Sweeteners (media credit and ITHT one-year subscription)

48. 48 Packages Price Point Manager: 1.Price Point Functionality 2.Unlimited technical Support 3.ITHT or $500 media Credit on next marketing Campaign 4.Set-up and training 5.Does not include any Revenue Management Support $2998 for 12-month subscription plus $750 set up fee $3.28 daily premium over EZY,,, express the premiums as a per day figure

49. 49 Packages Price Point Plus:  Same as above plus Revenue Management Support  50% discount for the Allocation Optimiser Add-on $3,396 for 12-month subscription plus a $750 setup fee $4.37 daily premium over EZY,,, express the premiums as a per day figure Our consultative services at a $1.09 per day!!!

50. 50 Revenue Management Support Advise on issues such as:  MLOS, CTA, CTD, Rate Selling Strategy vs Competition  Packages  Price Point  Use different Rate and Room Categories to tap into new segments  Selling Rate vs Net Rate Parity  Which channels should a hotel work with  Proactive approach giving them specific recommendations on the basis of an assessment  Sell them other TC products  Strategic advise for managing cross-channel selling limits  How to negotiate better contracts

51. 51 We will get a premium over because of our superior technology, proven ability to increase revenues, ability to bundle related marketing products and services, our local (consultative) and Product-specific support Our Pricing Philosophy

52. 52 Next Steps & Enhancements  Gradual addition of five more sites by the end of June  Channel News  On-line Community Space  Further integration of RV with CHM Even further into the future:  More sites added (leisure wholesalers, Tour Operators and Activity Sites)  Integration with iHotelier