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.

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