Pegasus results show recovery trend

Wednesday, 07 Feb, 2002 0

Pegasus Solutions has announced financial results for the fourth quarter 2001 that indicate a recovery in the hotel sector following 11 September.

Revenues were $38.9 million for the fourth quarter of 2001, compared to revenues from continuing operations of $39.6 million for the fourth quarter of the prior year.

John F. Davis, chairman and chief executive officer of Pegasus Solutions said: “Cash earnings were essentially flat with last year, and while I’m not normally pleased with flat earnings, after September 11, any results that are flat with last year have to be viewed as a victory.

“The events of 2001 created what was possibly the worst downturn in the history of travel. However, we are encouraged by trends indicating a recovery advancing faster than we expected, and as our core technology business continues to grow and produce favorable results.”

However, in a statement released today, the company said: “For 2002, even though we are still seeing some evidence that our business may recover better than we expected, it is uncertain as whether the recovery trends we see now will be sustained or when hotel bookings may plateau.”

The following is a summary of some of the key businesses indicators included in the results.

ASP CRS business represented 32% of total revenue, and revenues were up 13% from the 4th quarter of last year. During the quarter, it processed 10 million hotel bookings on behalf of its CRS ASP hotel customers.

Electronic Distribution, GDS and Internet connectivity/distribution business, contributed 10% of total revenue. Although GDS reservations were down compared to the 4th quarter of 2000, Internet reservations processed during the quarter were up 48%.

Financial Services, which operates the Pegasus Commission Processing service, represented 16% of total revenues. During the quarter, the group began to experience the impact of September 11th. The decline in average daily room rates and transaction volumes took their toll during the quarter. In total, Commission Processing processed $108 million in travel agency commissions, down 16% from the previous year’s quarter.

Utell representation business represented 37% of revenues contributing $14.3 million in revenue. As expected, Utell’s 4th quarter revenues were down 15% from last year. During the quarter, Utell generated approximately 550,000 hotel room reservations for its 5,500 hotel members. While reservations are still down from last year, the monthly recovery rate has shown recovery. January 2002 reservations were only off 6% compared to January of last year.