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Travel Site Pares Refund Program

As online travel services escalate their offerings in the struggle to dominate the market, at least one firm has had to scale back a program that was intended to set it apart from the competition.

Corporate-travel company Rosenbluth International's Biztravel.com reportedly is cutting back on a program it had begun last May that offered refunds to airline passengers who ran into problems with flights booked through the Web site.

Biztravel apparently found the program to be far more expensive that it had estimated as the number of late and/or canceled flights mounted.

The company has paid $1.6 million so far, twice what it expected, Hal Rosenbluth, chief executive of Rosenbluth International, told the Wall Street Journal, which first reported the story.

The company is scaling back the refunds it gives for problems with flights on airlines that include American Airlines, Continental Airlines and US Airways.

However, the site reportedly has extended its guarantee to customers who rent hotel rooms and cars through companies that include National Car Rental, Alamo Rent-a-Car, Wyndham International Inc., Hilton Hotels Corp., ANC Rental Corp and Grupo Posadas SA.

Online travel is one very competitive business. Just yesterday, travel site Travelocity launched a new program that lets visitors click on the lowest destination fare and immediately view a 90-day calendar that shows the flight's availability. The new service, which Travelocity said took 18 months and $5 million to develop, is based on an entirely new Unix-based pricing platform.

And Microsoft's Expedia service launched a redesigned Web site and a revamped flight-booking service that cost more than $30 million and took more than four years to develop. The new service, no longer restricted to old mainframes, offers more combinations on pricing and itineraries and more ways to sort flights by price, flight time and takeoff/departure times.

Biztravel.com's new refund structure, according to published reports, will offer airline refunds of $25, as opposed to $100, for customers whose planes arrive more than 30 minutes late, and $50, as opposed to $200, for delays over an hour. Instead of a full refund for flights delayed more than two hours or canceled on the day of departure, Biztravel will pay $100.