RealTime IT News

Expedia Takes to the Open Road

Expedia Inc. has signed a definitive agreement to acquire substantially all of the assets of Newtrade Technologies Inc., a Montreal-based developer of software and information distribution services that help hotels deliver their rates and availability to the market more efficiently.

The move underscores the online travel industry's desire to fuel growth by focusing more on the hospitality and lodging markets. Travelocity earlier this year bought Site59, an online hotel listings business, for $43 million and Priceline has also recently benefitted from the boom to automate antiquated hotel reservation systems.

But the move also helps highlight the shift toward technology based on open standards -- a shift that is only accelerated during times of economic difficulties, as evidenced by a recent speech by General Motors CTO Tony Scott.

Newtrade has developed open-standard technology that enables connectivity between hotel reservation systems and electronic distribution channels. As part of Expedia, Newtrade will provide this new technology to Expedia's merchant hotel partners to improve their quality of connectivity and give hotels unprecedented flexibility and control over their information distribution and inventory management. Expedia plans to deploy Newtrade's solutions for its merchant hotel partners in early 2003.

Prior to the Internet, hotels provided their inventory information to their electronic distribution partners primarily by fax- and phone-based processes that were extremely inefficient. And while some of the larger hotel chains have incorporated more e-commerce into their distribution channels, much of the industry has been left out of the technological revolution.

"Expedia is investing in Newtrade to deepen our relationships with hotels by helping them solve one of their most difficult and expensive problems -- electronic distribution of their room offerings to the market," said Erik Blachford, president, Expedia-North America.

According to a recent Bear Stearns report, year-over-year growth in online lodging revenue has already begun outpacing growth in the overall online travel sector. Online hotel reservations in the U.S. are expected to grow 114 percent to $9 billion by 2003 over 2001, according to PhoCusWright's Online Travel Market Update 2001-2005(1).

Newtrade employs approximately 60 employees and will continue to operate in Montreal. Benoit Jolin, President and CEO; Frederic Lalonde, EVP and Chief Technology Officer; and Barry Gleason, VP Business Development, will continue in their current positions.

The deal is expected to close in October.

Terms of the deal were not disclosed.