Expedia Looks For Flexibility on Distribution Options

Expedia Inc. officials said they are satisfied with the Expedia.com-Worldspan relationship, but are mulling their options and want to remain flexible in the evolving distribution environment that marks today´s travel industry and online reservations.

Company officials noted last week they are considering the establishment of direct-connects with airline reservations systems. Sources close to the negotiations said they are talking to and doing due diligence on the new-entrant GDS.

"We´re not going to rule anything out," said Steven McArthur, president of Expedia Inc.´s North American Leisure Travel Group. "But it can´t be us dictating to the airlines or the airlines dictating to us.

McArthur, who oversees Expedia.com, Hotels.com, Hotwire, TripAdvisor and Classic Custom Vacations under the new Expedia Inc. management structure, said he believes that the new-entrant GDS currently fall well short of being viable solutions.

Meanwhile, Expedia.com has a long-term GDS contract with Worldspan, and last year it contracted Sabre to handle some of its bookings, although the Sabre agreement hasn´t been implemented.

Asked if those contracts give Expedia.com the flexibility to build a relationship with a new entrant, McArthur said that a contract, by definition, involves constraints. "But is it so constraining we can´t do anything? No," said McArthur.