Priceline acquired Travelweb.com from its major hotel owners

Saturday, 11 May, 2004 0

Priceline.com acquired Travelweb.com, a travel distribution company. Owned by Hilton Hotels Corporation, Hyatt Corporation, Marriott International, InterContinental Hotels Group, Starwood Hotels, priceline.com and travel technology provider Pegasus Solutions, Inc.

The company has gained 71.4% of the equity interest in Travelweb.com, bringing Priceline’s total ownership to 85.7%. The purchase price was $20.8 million.

Priceline also said it had an agreement to purchase the remaining 14.3% equity interest held by InterContinental Hotels Group sometime in the future.

Travelweb has merchant supply agreement with more than 11,000 participating properties in the system, including hotel brands Hilton, Hyatt and Starwood.

Travelweb settled existing litigation with Orbitz, and will continue supplying it with hotel inventory, the company said.

“Priceline. com intends to continue building retail choices into our travel products,” said Jeffrey H. Boyd, president and CEO, Priceline.com.

Travelweb was formed in 2002 by the major hotel brands to level the playing field in the discounted merchant model, online hotel distribution market being dominated by hotels.com, Travelocity, Expedia, etc. Due to limited marketing investment, it has since only gardnered limited market share.

Now that most major brands are buffering online hotel discounting through their own ‘lowest price guarantees’ and instituted tighter merchant model contract pricing and inventory, they appear comfortable to relinquish ownership to an online retailer.

Report by David Wilkening

David

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