Expedia books itself a hotel deal | orbitz travelweb

Expedia books itself a hotel deal | CNET News.com: "Hotels could soon find it easier to sell rooms online, thanks to an acquisition announced on Tuesday by online travel company Expedia.

Expedia is purchasing Newtrade Technologies, a Montreal-based software development company. Newtrade is developing an XML-based system that will allow hotels to send information about their room availability and pricing to various distribution networks via the Internet. Expedia and Newtrade plan to introduce the new technology early next year, the companies said....

Travel has been one of the biggest and fastest growing areas of e-commerce. On the Internet, hotel bookings have long trailed behind airline ticket sales, but that may be changing. A recent research report from Bear Stearns, for instance, projected that use of Web sites to book hotel rooms is poised to surge in the next few years..

Part of the problem hotels have faced is that unlike airfares, which are largely distributed online, lodging information has generally been distributed via fax to companies such as Expedia or to global distribution systems, said Jared Blank, an online travel analyst for Jupiter Research. It's been done that way for a long time, and the distribution companies have had little incentive to change, he said.

Newtrade's system may not be an immediate incentive for distributors to change their ways, but it could help Expedia itself get access to a wider selection of rooms and rates, Blank said.

Newtrade's technology will work with other companies besides just Expedia, Charlier director of investor relations for Bellevue, Wash.-based Expedia said. Because it is based on XML (Extensible Markup Language), Newtrade's software will be able to connect the various systems used by hotels to manage their room inventory with the systems used by the various distribution networks, she said.

Travel is the largest segment of e-commerce and is still growing relatively fast. Jupiter Media Research recently predicted an annual growth rate of 23 percent in the online travel industry through 2006, with lodging growing at 26 percent annually during the same period to hit $15.5 billion."

Airlines have struggled with how to handle discounted fares online. A few companies have fought back by launching Orbitz, a booking site owned by a consortium of airlines. Five hotel chains have tried to copy this model, opening Travelweb.com in February. Travelweb has been fairly successful, Ader said, grabbing 4 percent of the online lodging market. But it could face the same legal troubles related to antitrust issues that Orbitz has run into.

Hotel chains face other problems too: independent hotels and franchisees. Independent motels and hotels have found it easier to reach wider audiences through online travel sites. And franchisees, which account for a substantial number of rooms in the major chains, may be prompted to challenge rate and marketing decisions made by their corporate parents.