Travelocity’s Sales Soar High

Online travel agent Travelocity.com reinforced its position as an industry leader on Thursday. This brings up the issue of whether Travelocity.com will fly higher and become a public company or remain part of holding company The Sabre Group (Nasdaq: TSG).

On Thursday, Travelocity.com, which is owned and operated by Sabre, announced gross sales of more than $128 million (US$) for the first quarter of 1999, a 156 percent increase over the same period last year. The site also reported that 1.2 million new members registered during the first quarter.

According to Media Metrix, Travelocity, which was named the best travel site for the second straight year at the 1999 Webby Awards, was the most popular travel site in March, recording nearly 3.8 million unique visitors.

Travelocity.com credits its growth to innovation. The company recently launched a feature called “best fare finder,” which searches for low fares and displays them in an interactive calendar for customers.

“Our focus has always been on growing the market and providing excellent service to our members,” said Terrell B. Jones, president of Travelocity.com. “By continuing to innovate and give our members exactly what they ask for, we ensure our own growth as well as the development of online travel.”

About Sabre and Travelocity.com

The Sabre Group focuses on the electronic distribution of travel and is a leading provider of information technology solutions for the travel and transportation industry. Sabre has sold more than 3 million airline tickets online since launching in March of 1996.

Travelocity.com has registered more than 6.5 million members and records more than 65 million page views each month. Travelocity.com provides reservations capabilities for 95 percent of all airline seats sold, more than 42,000 hotels and more than 50 car rental companies.

A Possible Spin Off?

The success of Travelocity.com adds fuel to the discussion about whether Sabre will eventually spin off Travelocity.com and take it public. More than 80 percent of Sabre is owned by American Airlines’ parent company AMR Corp. (NYSE: AMR). The affiliation with American Airlines could add luster to an initial public offering that would likely add significant shareholder value.

The success of competitor Priceline.com’s (Nasdaq: PCLN) initial public offering makes the possibility of a Travelocity.com IPO more enticing, and some analysts have noted that the value of Travelocity.com isn’t being reflected in Sabre’s stock price. Shares of Sabre gained 3-8 to 61-3/8 on Thursday.

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