the company’s sales
`in this future world,
`50,
`director, for example, can use their lap-top com-
`puter to check availability via access to one of
`the GDSS that has a Web site. They enter their
`travel requirements and from an availability list-
`mg chooses a flight. The system checks that the
`fare and class are within the company’s travel
`policy and that all required fields have been en-
`tered for future management information purposes.
`Their personal travel preferences are stored in the
`system on their profile and the system uses this to
`make a seat reservation. Now the fun starts.
`There are clear rules that the airlines have
`agreed regarding the choice of ticketed carrier.
`The ticketed carrier is of course the airline who
`will issue the ticket and collect the fare amount
`via the BSP (see Chapter 7 for more details on
`BSP). Even though the ticket may be issued elec-
`tronically,
`it needs to have a designated ticket-
`ing carrier. All right,
`let’s assume that our GDS
`chooses the correct ticketed carrier. The next deci-
`sion to be made by one of the systems involved in
`this future world scenario is who will collect the
`funds for the ticket. Airlines do not usually col-
`lect funds for ticket sales direct from passengers.
`This is usually done via the BSP, 80, whereas in
`today’s world the ticket would usually be allotted
`to a travel agent’s IATA number, in our scenario,
`this would not be available because no travel agent
`is involved. So, now we come to the first
`issue:
`‘Who will collect the funds for direct ticket sales
`
`In other
`
`company liquidations and bad debts.
`words an airline’s worst nightmare.
`OK, so let’s assume that instead of the ticketed
`carrier having to collect the funds from the com-
`pany, each company will negotiate with a single
`airline to produce all
`its tickets and collect all
`funds. This airline would then be burdened with
`
`quite a substantial administrative task. First of
`all, it would still have a number of company cus-
`tomers with whom it would have to deal direct.
`The airline would therefore be burdened with
`
`the same kinds of problems outlined above. Also,
`for the tickets that it
`issued on behalf of other
`
`airlines, it would enjoy a positive cash flow. How-
`ever, would those other airlines be so happy. They
`would be carrying the passenger but would prob-
`ably not receive payment until some time later. In
`other words they would be out of pocket for longer
`than at present. So, this scenario is unlikely to be
`acceptable by the airlines either.
`Well, that just
`leaves us with the option of
`having some third party involved who will collect
`funds from the company and use the BSP system
`to settle ticketed carrier funds on a consolidated
`basis to each airline in IATA. Sounds familiar?
`
`The travel agent rears its head again. But what
`about
`the BSP organization itself? Couldn’t
`it
`extend its clearing house role to include collecting
`payments from companies? Well, it’s just possible
`but I don’t think this is very probable. After all,
`BSP is owned by IATA, which is itself an airline
`association. Once again,
`the issue here is: ‘Will
`the airlines want
`to get
`involved in payment
`collection from their customers?’ I think that BSP
`
`when no travel agent is involved?’
`You might think this is simple — it should be
`the ticketed carrier. Well, if it is to be the ticketed
`has enough of a job collecting funds from a lim-
`carrier then consider this. Depending upon the
`ited number of travel agents. Collecting funds from
`route flown and the first carrier on the ticket,
`hundreds of thousands of companies would be
`the ticketed carrier could potentially be any of the
`a nightmare of even greater proportions.
`world’s airlines. So, assuming the company’s air
`This may sound like I have argued that dis-
`travel
`is quite extensive,
`it will need to expect
`intermediation will not happen, at least not in the
`payment requests from a large number of airlines,
`business travel air segment. However, that is not
`i.c. each ticketed airline flown by the company's
`the real point. Although it seems there may con-
`employees. From the airlines’ viewpoint, each air-
`tinue to be a need for a travel agent, the role that
`line will need to send out payment requests to
`the agent plays in the future will be quite differ-
`many different companies with all the associated
`ent. In our future world scenario, the airlines will
`payment processing functions that this will involve,
`almost certainly not wish to pay the travel agent
`e.g. sending out reminders, reconciling payments
`the current levels of commission just to act as a
`received versus payments due, controlling cash
`third party for BSP settlements. After all, in this
`flows and outstanding receivables, vetting the credit
`future world virtually all
`the routine tasks are
`worthiness of companies and, finally, coping with
`
`THE INTERNET
`191
`
`Petitioners‘ Exhibit 1021, Page 201
`
`

`
`undertaken by software. What added value has
`the travel agent contributed? Answer — very little;
`just the settlement function. Certainly nothing that
`would justify a percentage of the ticket value.
`So, the travel agents of the future will have to
`derive their incomes from some other source. This
`
`comes back to the question of added value. The
`travel agents’ added value is their consultancy
`advice. This expert advice is not always needed
`for every trip. In the case of our fictitious com-
`pany, the sales director did not need any advice —
`they simply booked their trip using their lap-top
`computer. However, there will no doubt be in-
`stances where they will need to ask an expert
`what the best airline and route would be for a
`
`more complex trip. This is where the travel agents
`come into the picture and is an area where they
`can develop a niche for themselves. The agents
`should be able to apply expertise to help the trav-
`eller plan the trip and select the most appropriate
`airline, route, departure timing, departure airport
`and other travel arrangements. For this consult-
`ancy advice, the travel agents can expect to be
`paid. The problem for the travel agents is that
`they claim to have been doing this for some time
`and at no apparent charge to the customer (in-
`deed, in most cases the customer has actually had
`money back from a share of the agents’ commis-
`sion). Travel agents will therefore need to work
`very hard to develop true consultancy expertise.
`This will need to be delivered to such a high stand-
`ard that the customer will be convinced that it is
`
`worth paying for.
`But value can be added in other ways. It can
`even be added by semi-intelligent machine-based
`processes. Some Internet applications already use
`a special piece of sophisticated software called an
`‘Intelligent Agent’ (incidentally, the word ‘Agent’,
`as used here, has nothing to do with travel agents
`— rather it is an entity that acts for the user’s own
`interests). An Intelligent Agent falls into that class
`of computing known as software robots. These
`are clever computer programs that understand
`user’s requirements and search the Web for items
`that appear to match what the user is looking for.
`It is quite possible that Intelligent Agents will form
`an integral part of new Web sites operated by the
`new travel intermediaries. Intelligent Agents should
`be able to understand what a consumer is looking
`
`192 INFORMATION TECHNOLOGY FOR TRAVEL AND TOURISM
`
`for; for example, a holiday to Indonesia costing
`less than a certain amount, selected from four 0,
`five preferred airlines with departures from London
`Gatwick. Many other more detailed requirements
`and preferences could be included. The Intelligent
`Agent should then be able to search the Web for
`sites that contain the kinds of holidays that match
`these requirements and present them to the user_
`In other words, they do all the hard graft of sign.
`ing on to relevant Web sites, searching them,
`recording the responses, signing off, going to the
`next site via a search engine and so on. However,
`despite the distinct possibility that they may find
`a niche in the travel industry of the future, I think
`it will be a long time before Intelligent Agents
`begin to replace travel agents.
`50, not the end of the travel agents, but a
`radical shift in their role. Similar parallels can be
`drawn within the leisure side of the business.
`Straightforward holidays can be booked directly,
`possibly using one of the new distribution chan-
`nels, such as the Internet. However, some people
`and some more complex holiday requirements will
`demand more specialist advice. Here, once more,
`there is a role for the travel agent. However,
`it
`remains to be seen how the travel agents will derive
`their income from this situation. Will holiday-
`makers expect to pay for expert advice from their
`travel agent? Will tour companies pay travel agents
`to offer advice on their products only? It appears
`possible that the environment could develop along
`similar lines to the financial services industry where
`agents are either tied to a company or offer inde-
`pendent advice on all companies. Although this
`appears to be getting away from the subject of
`IT in travel and tourism, these potential shifts in
`the underlying structure of the industry are being
`driven by rapid technological change.
`
`TOUR OPERATORS
`
`Tour operators are intermediaries between suppliers
`and either travel agents or consumers. They pur-
`chase products and services from travel suppliers
`and package them into a product that they market
`to consumers. So, what opportunities are there
`for using the Internet to provide electronic pack-
`aging mechanisms that could bring about
`the
`demise of tour operators as intermediaries? Well,
`
`Petitioners‘ Exhibit 1021, Page 202
`
`

`
`I guess like many of the other disintermediation
`issues, it is not quite as black and white as all that.
`Undoubtedly, there are some consumers who
`are adventurous enough to use the Internet to
`construct their own packages. In fact, there are
`several software products around that support this
`very function. It is only a matter of time before
`they are available on the Internet. Say, for instance,
`that an Internet site was available that enabled
`consumers to: (a) browse an inventory of cheap
`hotel deals in a particular resort area; (b) browse
`a data base of associated seat-only air services;
`and, finally,
`(c) add a few optional sightseeing
`trips to their itineraries. At
`the end of such a
`process, the consumers would have assembled their
`very own personalized packaged tours (also known
`as an, Independent Tour (IT) ). It would only re-
`main for them to print the itineraries, pay for the
`services and receive their documentation either
`
`through the mail, at the airport or electronically.
`All without purchasing a packaged tour from a
`tour operator — or is this really the case?
`Why couldn’t this kind of Internet site be run
`by tour operators? After all,
`they are the ones
`that have the relationships with the hotels and
`other services in the destination areas; and they
`often have their own charter airlines to these same
`
`destinations. So, maybe the only function that is
`at risk due to electronic commerce, is the packag-
`ing of these individual components for a consumer.
`Well, when you think about it, this is the very area
`that gave rise to most of the current problems for
`tour operators. Problems such as the decision pro-
`cess required to guess what arrangement of com-
`ponents will make a package that appeals to the
`widest number of consumers. The package holiday
`companies would like nothing better than for every-
`one to select their own combination of travel pro-
`ducts from their inventories. Think of the massive
`
`electronic business world of tomorrow. In fact, a
`very good book that examines this issue in more
`detail, as well as several others in the area of tour
`operations in the UK and Germany, is published by
`DeutscherUniversitats Verlag by Karsten Karcher
`entitled Reinventing the Package Holiday Business.
`
`DISTRIBUTION SYSTEMS
`
`GDSs and HDSs are intermediaries between travel
`
`suppliers and travel agents. The GDSs have their
`origins in the airline CRSS that were themselves
`originally designed to enable airline sales staff to
`sell seats on their flights. Over the course of time
`they were First distributed to travel agents, then
`enhanced to include access to hotels and car rental
`
`companies and, finally, consolidated with multiple
`CRSS to form what we now call GDSs. Finally,
`the interconnection technology that linked GDSs to
`hotels was vastly improved by means of specialist
`industry switches called HDSs. What is the next
`stage in their evolution? As you will see from the
`remainder of this chapter, many of them have
`developed an Internet interface of some form or
`another. Some of the HDSs have broken new
`
`ground by turning the tables on GDSs and offer-
`ing consumers and travel agents their own hotel-
`based Web booking services that also include GDS
`access. Generally speaking, access paths to the
`consumer via the World Wide Web at present
`keep the travel agent firmly in the loop — but for
`how long? It seems quite possible that new inter-
`mediaries can offer a whole range of booking ser-
`vices to consumers without using GDS technology
`or travel agents. But, first of all, let’s consider the
`future of GDSs from an airline’s viewpoint.
`
`GDSs
`
`An airline's CRS is quite capable of handling the
`reductions in brochure printing costs, advertising
`bookings of seats not just for its own flights but
`and agency commissions that this could bring.
`also the flights of virtually every other airline. The
`However, I think it will be a long time before
`precise functionality of how CRSS handle reserva-
`sufficient numbers of consumers become this soph-
`tions involving other airlines is governed by their
`isticated and confident to have a real impact on tour
`respective levels of participation (see Chapter 4
`operators. However, it will undoubtedly happen,
`for more details on this). Airlines must pay a fee
`the only question is: ‘When will it happen?’ So, tour
`for their participation in GDSs and this is usually
`operators need to consider their strategic options
`levied by means of a booking fee. Again, this is
`and start experimenting with this new technology
`one of the major components of their distribution
`if they are to be capable of adapting to the new
`
`
`THE INTERNET
`
`193
`
`Petitioners‘ Exhibit 1021, Page 203
`
`

`
`costs that I analysed in more detail in the preced-
`ing section: and because distribution costs have a
`direct and substantial impact on profitability levels,
`any opportunity to reduce them needs to be care-
`fully considered by airlines.
`The Internet offers airlines a direct sales chan-
`
`nel to consumers. Many airlines have developed
`their own sites, some of which also support book-
`ing and payment functions. The key question is:
`What effect will this have on their participation
`in GDSS? It could well be that as time goes on,
`a substantial proportion of their bookings could
`be derived from their own Internet sites or indeed
`
`from the new intermediaries (see next section for
`more details on the new intermediaries). Handling
`bookings directly via this channel has the dual
`benefit of: (a) eliminating GDS booking fees, and
`(b) eliminating travel agent commissions. This is
`a very sensitive subject for airlines and one on
`which they are unlikely to be very forthcoming.
`The reason for this coyness is that dangerous talk
`costs revenue. If airlines were thought to be con-
`sidering this path they would disenfranchise their
`GDS as well as their travel agency relationships.
`However, it is nevertheless the case that a direct
`Web site offers significant benefits that cannot
`afford to be ignored by the airlines. This explains
`why these sites are nearly all currently described
`as being quite separate from the main distribution
`channel and in many cases require the consumers
`to collect their tickets from their nearest travel
`
`agencies. But not all such sites require the con-
`sumer to do this. Some offer full payment process-
`ing with ticket collection on departure. The point
`is, it is rather like an insurance policy. Having an
`Internet site allows airlines to become familiar
`
`with the technology, to build a loyal client base
`(albeit a small one initially) and to establish some
`small degree of independence from both the GDSs
`and travel agents.
`Now, let’s consider the situation sometime in
`the future when most airlines have developed their
`own Web sites for information and booking pur-
`poses. Let’s also further assume that many more
`people have access to the Internet and are using it
`heavily. Consider the situation from a consumer’s
`viewpoint. Take someone who wants to fly to some
`foreign destination. Which airline Web site will
`they access? One might start with the national
`
`194 INFORMATION TECHNOLOGY FOR TRAVEL AND TOURISM
`
`airline of the destination country. However, with
`competition and deregulation, national airlines are
`rapidly becoming a thing of the past. Even if they
`weren’t, they do not necessarily always offer the
`cheapest or the best deals. The poor old consumer
`could, in this scenario, spend a great deal of time
`visiting one airline site after the other, looking for
`a suitable deal.
`
`to have a special kind of
`Far better surely,
`airline search engine into which you enter your
`basic requirements and it finds several airlines that
`have deals to suit your needs. Again, doesn’t this
`sound familiar? The old GDS concept rears its
`head once again. However, the guise is somewhat
`different.
`Instead of this new generation GDS
`being the main switching point between the air-
`lines and other travel service companies, it is much
`more akin to an Internet search engine. It would
`need all
`the functionality provided by a search
`engine but with more sophisticated links to other
`sites, principally airline sites. These links would
`enable it to collect, disseminate and present options
`to consumers that would allow it to direct them
`to the airline best suited to their needs.
`But
`this is not a scenario that
`the airlines
`
`particularly relish. It takes away the consumer
`influencing part of the buying decision process
`and vests it in a separate company over which the
`airlines have little or no control. Then there is
`
`the bias rules and regulations to be considered.
`Who would police these new Internet-based air-
`line search engines? Enforcing rules on Internet
`service providers is a tricky business that so far
`has not been tackled successfully. How, for in-
`stance, could the EU enforce its unbiased rules
`for GDSS on an airline search engine located in
`say, Malaysia?
`However, the stakes are high in this game. If
`an airline can develop an excellent Web site that
`proves highly successful and popular with con-
`sumers then it is going to generate a substantial
`amount of revenue: and this revenue is potentially
`free from GDS booking fees and travel agent’s
`commission. Once this begins to happen, the writ-
`ing is on the wall for the GDSs. But don’t let's
`forget that most of the GDSS are currently owned
`by airlines. Having said this, one can’t help but
`notice the gradual divesting of CD5 ownership by
`airlines. American Airlines’ parent company still
`
`Petitioners‘ Exhibit 1021, Page 204
`
`

`
`Room rate charged by hotel ............................................................. .. 100.00
`Less:
`-10.00
`Travel agent commission at 10 %
`-3.55
`GDS booking fee
`-0.50
`Hotel switch processing fee
`Booking service provider
`-9.00
`(e.g. representation company or hotel chain headquarters)
`-3.50
`Credit card service fee
`-10.00
`Corporate rate discount on room
`Total deductions .............................................................. .. -36.50
`Hotel income
`
`................................................................................. .. 63.50
`
`Figure 5.1 The economics of hotel
`bookings
`
`
`owns over 50 per cent of Sabre, but this is a lot
`less than its total ownership situation as of a few
`years ago; and there are several other examples
`where airlines can be seen to be reducing or sell-
`ing their equity investments in GDSs. So, quite
`frankly, who knows what will happen? I think it
`all depends simply upon how successful the new
`airline Web sites are. Only time will tell.
`
`HDSs
`
`viewpoint. Even if we consider direct bookings
`received via the toll free telephone service chan-
`nel, the hotel is still looking at some horrendous
`costs of sale. It is estimated that voice calls made
`
`by consumers to toll free telephone booking cen-
`tres average between US$l0 and '15 with a fre-
`quently reached upper level of US$30. Clearly,
`there are enormous pressures on hotels to seek
`alternative distribution channels for
`their pro-
`ducts. The Internet
`is one such channel and
`
`companies like TravelWeb and Thisco offer a far
`cheaper route to market than the classical GDSI
`travel agent combination that has been the estab-
`lished way of doing things for so long. Many
`hotels already participate in I-IDSs like Thisco and
`to use this as a platform for bypassing the GDSs
`and ultimately, the travel agent,
`is an attractive
`scenario. If we take a hotel with 100,000 book-
`ings per year and assume that
`it could save
`US$13.50 per booking then this could generate
`US$1.35 million each year. Now, I accept that a
`hotel is unlikely to be able to realize quite such a
`large saving, at least not in the early years of this
`new distribution scenario. But the important point
`is — this is the target that seems to be attainable
`by hotels, and it helps explain the rationale and
`pressures that are the principal driving forces be-
`hind GDS disintermediation.
`
`Now, what about the view of GDSs from the
`hotel industry’s viewpoint; and in particular, the
`view of HDSS and their hotel owners. At present
`around 28 per cent of all hotel bookings are gen-
`erated by travel agents. In the USA, 80 per cent
`of these travel agency hotel bookings are made
`using GDSs. In Europe the figure is far lower at
`35 per cent and in Asia Pacific it
`is just 15 per
`cent. The other 72 per cent of hotel bookings are
`generated by consumers themselves either Via toll
`free telephone calls to specialist reservation cen-
`tres or by direct contact with the hotel. To illus-
`trate the pressures for disinrermediation from the
`hotel industry’s point of view, let’s take a some-
`what extreme example. Take a hotel booking that
`is worth US$100. Let’s first of all assume that the
`booking was made by a business traveller who
`used a travel agent. The agent booked the room
`via a GDS and the customer paid using their credit
`card. The economics look something like those
`shown in Fig. 5.1.
`Tourist offices, often also known as destination
`At 36.5 per cent, the overheads of this booking
`service organizations, are intermediaries as well.
`channel appear excessively high from the hotel’s
`
`THE INTERNET
`195
`
`TOURISM
`
`Petitioners‘ Exhibit 1021, Page 205
`
`

`
`They are intermediaries between national tourism
`organizations, which are often sponsored by govern-
`ments or at least local governments, and remote
`tourist offices in overseas locations. The general
`pattern here is that the central government tour-
`ism organizations are charged with developing
`and executing marketing plans that promote their
`country or region overseas. This usually involves:
`(a) building a data base of national information
`and supplier details, and (b) distributing this to
`overseas tourist offices where information is made
`
`available to consumers and travel companies in a
`pre—defined area. These overseas offices receive
`local enquiries either by telephone, mail or from
`walk-in clients. Enquiries are serviced by access to
`the reference data and by distributing booklets and
`pamphlets as required (see Chapter 2 for more details
`on how IT is used to support tourism in this way).
`It is the Internet that poses disintermediation
`in tourism. This arises from the growing number
`of Web sites devoted to tourist information. These
`
`sites are becoming quite sophisticated and many
`contain all the information that potential inbound
`visitors and travel organizations would want to
`know. Those sites that also offer on-line booking
`of accommodation services and events are par-
`ticularly attractive to end users in other countries.
`The key question here is: To what degree will
`these Web sites impact local tourist offices? It is
`highly unlikely that these sites will cause the ulti-
`mate demise of overseas tourist offices, but it could
`have a major bearing on the size and distribution
`of offices.
`
`The new intermediaries
`
`I have used the term ‘new intermediaries’ to en-
`
`compass any Internet site that offers a full range
`of travel services directly to consumers. In some
`cases these new intermediaries are backed by an
`existing distributor of one or more major travel
`products. However, what makes them a new in-
`termediary in my terminology is that they offer a
`range of other travel products, not all of which
`are provided by the site’s main sponsor. In other
`words, they may be viewed as an electronic travel
`agent offering a wide range of travel services and
`travel-related information.
`
`196 INFORMATION TECHNOLOGY FOR TRAVEL AND TOURISM
`
`It is also the case that some of these new inter-
`
`mediary sites use travel agents for post-sales cus-
`tomer servicing. The fact that they use travel agents
`in this way does not dilute their potential
`for
`affecting disintermediation, it does not make them
`any less important to the direct distribution of
`travel and tourism, nor does it mean that they
`will not have a significant impact on the classical
`travel agency. The kind of travel agent that has
`formed an alliance with these new intermedi-
`
`think we
`aries is just the type of agent that I
`will see more of in the future. Those agents that
`stick rigidly to so-called tried and tested methods
`based purely on face-to-face high street sales are
`the ones most likely to be affected by these new
`intermediaries.
`
`EXPEDIA
`
`Not many people know that Microsoft is a travel
`agent — but it very definitely is. Its Internet site,
`branded Expedia (Fig. 5.2),
`is one of the most
`important examples of the new generation of travel
`intermediaries. So, I would encourage any travel
`agents who do not think the Internet will have an
`impact on their businesses to take a good look at
`Expedia.
`It represents what is arguably the first
`real electronic travel agency aimed directly at con-
`sumers. It is a Web site that was launched in the
`
`USA on 22 October 1996 and is already highly
`successful.
`In the early months of its launch it
`sold an average of 1,000 air tickets each day gen-
`erating over US$1.25 million worth of air travel
`turnover per week. Along with this substantial
`volume of electronic air sales goes a significant
`amount of related hotel and car bookings. In fact
`the proportion of non-air sales made via Expedia
`is higher on average than the typical business
`profile of USA travel agents; and with a 20 per
`cent growth rate, Microsoft’s business is already
`beginning to make serious inroads into the USA
`travel industry. At the time of writing this book,
`Expedia was only distributed to domestic consumers
`in North America. So, although anyone with an
`Internet connection could access Microsoft’s USA
`
`site, only consumers actually resident in the USA
`and Canada were allowed to participate in the
`transactional booking functions of Expedia. How-
`ever, Microsoft is now implementing its Expedia
`
`Petitioners‘ Exhibit 1021, Page 205
`
`

`
`partner. In the UK, for example, the travel part-
`ner is A. T. Mays. A. T. Mays has worked with
`Microsoft to develop a travel support function
`that includes several interesting facets (Fig. 5.3).
`Besides providing post-reservations support and
`fulfilment operations, A. T. Mays has built a data
`base of consolidator air fares and other travel-
`related information on a Web server that is located
`
`on the Microsoft network in Redmond Washing-
`ton where Microsoft houses its headquarters and
`operations centre. It is these kinds of partnerships
`that are behind the real power of Expedia. Let
`me illustrate this by walking you through how a
`consumer in an international area (I’ve used the
`UK as an example here), interacts with Expedia
`to make their own travel arrangements.
`
`Registration
`To use Expedia for booking travel products, a
`consumer must first register themself on the site.
`It is not compulsory to enter plastic card informa-
`tion, although this may be recorded and helps
`speed the booking process. A consumer may also
`elect to record their travel preferences within their
`own personal profile as part of the registration
`process. This enables the traveller’s likes, dislikes
`and preferences to be entered automatically into
`booking fields at the appropriate time — a good
`example of Expedia’s labour saving features.
`
`General trip planning
`Once registered, a consumer may browse the in-
`formation stored within Expedia. This is an enor-
`mous data base of travel-related information that
`
`service outside the USA with other major coun-
`tries including the UK, Germany and Australia.
`So, it is evident that Microsoft has entered the
`travel business in a very serious way.
`Its Web
`site, branded Expedia, incorporates a vast amount
`of travel-related information that is available in
`both HTML pages of text and graphical images
`recorded in full colour. This information is stored
`in several relational data bases that are indexed
`and accessible via powerful search engines. Expedia
`is also linked to the Worldspan GDS via a book-
`ing engine interface that provides consumers with
`access to the full range of published scheduled air
`flights, hotels and car rental services. All
`these
`travel products and services are available via a
`very user-friendly front-end interface that may be
`accessed using most secure Web browser software
`products including of course, Microsoft Explorer.
`Microsoft’s commitment to its travel business
`
`is characterized by the 120 staff that it dedicated
`to Expedia in 1997 and by its possession of an
`IATA licence. Microsoft is therefore a fully fledged
`travel agency in its own right and makes regular
`payments for air sales via the USA equivalent of
`IATA’s BSP, just like any other USA travel agency.
`At present, for purely logistical reasons, Microsoft
`has outsourced its USA travel servicing functions
`to World Travel Partners (WTP), a USA travel
`group based in Atlanta, Georgia. WTP provides
`Microsoft with services that include the issuance
`
`of travel documents for Expedia customers, includ-
`ing air tickets. These are mailed to customers’ home
`addresses using the regular USA Mail postal service
`or special courier delivery services as necessary,
`e.g. Federal Express. However, with the increas-
`ing use of electronic ticketing (see Chapter 3), this
`aspect of WTP’s service may well become less im-
`portant as paper tickets decline in use. WTP also
`provides an after sales service, or post—reservations
`support function, that provides customers with
`classical
`travel agency services delivered via the
`telephone and electronic mail.
`
`is maintained by Microsoft staff. Besides main-
`taining up-to-date information on destinations and
`all kinds of travel opportunities, Expedia also fea-
`tures chat sessions where a consumer can log-on
`to an electronic meeting place hosted by one or
`more experts in certain travel subject areas. The
`venue for these chat shows is published on Expedia
`and allows the consumer to choose when they
`wish to log—on and participate in the session.
`During a chat session, each participant’s questions
`and observations are put to the host via a Forum
`Manager and are also distributed to all other con-
`Microsoft’s strategy on post-reservations support
`sumers participating in the session. Microsoft uses
`for international markets seems to be based very
`full-time Forum Managers to provide its Expedia
`much on the USA model. In each country or region,
`customers with expert travel consultancy on many
`a travel company is selected as a customer service
`
`
`Travelling with Expedia
`
`THE INTERNET
`
`197
`
`Petitioners‘ Exhibit 1021, Page 207
`
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