Cendant buys Orbitz

Cendant buys Orbitz for one point two five billion bucks. Plans to keep both
Cheap Tickets.com and Orbitz.com operating.

or the business sector, Cendant expects to combine its CheapTickets and
Travelport technology and operations, operating them as Travelport. Orbitz
will also continue to offer corporate travel.

Note: Cendant also owns the Gallileo CRS.

No word on whener Cendant plans to make Orbitz relevant to the world, or keep
it restricted to the USA market.

"Clark W. Griswold, Jr." wrote in message
...
nobody wrote:

Cendant buys Orbitz for one point two five billion bucks. Plans to keep
both
Cheap Tickets.com and Orbitz.com operating.

Interesting. Orbitz was established by the airlines because they didn't
want to
pay comissions to independent CRS. Now they are spinning it off to an
independent travel company...

They need the money NOW.

nobody wrote:

Cendant buys Orbitz for one point two five billion bucks. Plans to keep both
Cheap Tickets.com and Orbitz.com operating.

Interesting. Orbitz was established by the airlines because they didn't want to
pay comissions to independent CRS. Now they are spinning it off to an
independent travel company...

Interesting. Orbitz was established by the airlines because they
didn't want to pay comissions to independent CRS. Now they are
spinning it off to an independent travel company...

The Orbitz corporate charter and the long term contracts they have
with the airlines make it pretty certain that the no-commission plan
will continue.

They need the money NOW.

Orbitz doesn't need any money, they have $150M in cash and they're
quite profitable. On the other hand, the five airlines could
certainly use a billion dollars.

I see two reasons that it makes sense for Cendant to buy Orbitz. One
is that so long as Orbitz was controlled by the airlines, investors
assumed that they'd never do anything that would make the airlines
unhappy, limiting their competitiveness relative to Travelocity and
Expedia.

The other is that it turns out that nobody makes money selling airline
tickets since the margins are close to zero, but they make quite a lot
of money selling hotel rooms and rental cars where the margins are
great. Cendant's main business is franchising, where they own nine
hotel brands (Ramada, Travelodge, etc.) as well as Avis and Budget.
Cendant probably figured that if someone's going to make all that
money selling their hotel rooms and rental cars, it might as well be
them.

Don't expect much in the way of changes. Cendant's record in their other
business is to develop a source for revenue from fees. They don't improve
what they've bought. Just look at their hotel chains, Ramada (US only),
Howard Johnson's, Day's Inns, etc. All low-end. Their rental car
operations at Avis and Budget haven't changed since they bought them either,
and the changes at Century 21 Real Estate, ERA Real Estate, and Coldwell
Banker residential haven't changed much either.

They've tried to sell off their mortgage operation, but haven't been able to
do that.

I'd expect no changes in Orbitz, and maybe a tighter connection with their
Gallileo operation.


"nobody" wrote in message
...
Cendant buys Orbitz for one point two five billion bucks. Plans to keep
both
Cheap Tickets.com and Orbitz.com operating.

or the business sector, Cendant expects to combine its CheapTickets and
Travelport technology and operations, operating them as Travelport. Orbitz
will also continue to offer corporate travel.

Note: Cendant also owns the Gallileo CRS.

No word on whener Cendant plans to make Orbitz relevant to the world, or
keep
it restricted to the USA market.

I'd expect no changes in Orbitz, and maybe a tighter connection with
their Galileo operation.

Agreed, except that since Orbitz has contracts with Worldspan going out
to 2011, I wouldn't hold my breath waiting for them to tie into Galileo.

The goal for Cendant is clearly to sell more hotel rooms and rental cars.

I'd expect no changes in Orbitz, and maybe a tighter connection with
their Galileo operation.

Agreed, except that since Orbitz has contracts with Worldspan going out
to 2011, I wouldn't hold my breath waiting for them to tie into Galileo.

The goal for Cendant is clearly to sell more hotel rooms and rental cars.

"John R. Levine" wrote:
Agreed, except that since Orbitz has contracts with Worldspan going out
to 2011, I wouldn't hold my breath waiting for them to tie into Galileo.

Contracts can change and can be cancelled if the cost of cancelling are less
than the advantages of switching.

The goal for Cendant is clearly to sell more hotel rooms and rental cars.

They aren't going to sell more rooms and cars. They just will collect back a
greater percentage of the comissions their hotel and car rental properties
must dish out to the distributors.