ChannelManagerTraining

March 2004

Overview of the Product’s Vision & Value Proposition

3

Overview of the Merchant Model in the Industry

Points of Contention between Merchants and Hotels: Merchants getting stronger by the minute. Consolidation is enhancing

their strength

Leverage over contractual pricing and terms

Hotels lost control of pricing, merchandising and customer interaction

Brand equity and customer loyalty dilution

Competition for on-line buyers

Managing multiple Merchant Extranets is too time consuming

4

Hotels’ Reaction to the Merchant Model

Focus on their own site

Rate Parity

Enhance Loyalty Programs

Focus on Revenue Management

Smarter Contracts

Fixed margins

Key word control clauses

5

The Old Model

Last Minute

Hotel Property

Net Rates & Inventory

Expedia Opodo

ProprietaryExtranet

ProprietaryExtranet

ProprietaryExtranet

Net Rates & InventoryNet Rates & Inventory

Manual inputManual inputManual input

6

The New Model

Hotel Property

Net Rates & Inventory

ProprietaryExtranet

ProprietaryExtranet

ProprietaryExtranet

Manual input

EmulationEmulationEmulation

Channel ManagementPlatform

Retail.comRetail.com

Retail.com

Retail.comRetail.com

Retail.comRetail.com

Retail.comRetail.com

Retail.com

Retail.comRetail.com

Retail.comMerchant.com

Retail.comRetail.com

Retail.com

Retail.comRetail.com

Retail.comDestination.com

ReservationCount

ReservationCount

7

A few notes on our technology

Interfacing with the Extranets using a technology called “web emulation”

or “web wrapping”. Same technology used for RateView

Using XML language to export data with the Extranets and to get

information back from them (reservation counts)

8

Value Proposition

Cost Savings

Incremental Revenues

StrategicImplications

Different audiences and components of the Value Proposition

AudienceGMs

DOSs

DRMs

Owners

9

Value Proposition

Incremental Revenues:

Sell different rate and room types to tap into other segments with different

price sensitivities

Work with a greater number of on-line distributors

Avoid unwanted closures by using the auto-allotment feed (Allocation

Optimiser)

10

Value Proposition

Cost Savings:

Manage multiple sites by using one single interface

Reduce the DRM’s opportunity cost (salary and incremental revenues)

Avoid Rate Parity Penalties

Enhance the value of RateView by using it in conjunction with CHM

11

Value Proposition

Strategic Value:

Reduce Commercial risk by working with more sites. Don’t put all your

eggs in the same basket

Regain control of pricing by implementing Rate Parity

Avoid channel cannibalization by protecting your own site’s integrity

Increase the exposure of retail rates on the Web

Diminish the distributors’ leverage

Stimulate competition

Level the playing field

12

Value to TravelCLICK

Future integration of CHM with iHotelier

Establish a position between the merchants and the hotels

Position ourselves as the hotels’ agents

Leverage our position over the merchants

Better cooperation (direct links)

Synergies between CHM and other TC products will create competitive

barriers

Beta Test

14

Beta Update

Beta began early March and will run through April

Beta hotel responsibilities : testing functionality and providing

enhancement recommendations

Hotels in beta offered a complimentary 12 month subscription

Feedback from participating hotels has been positive – Channel Manager

is creating operational efficiencies in the process of managing merchant

extranet sites

“I love the fact that I put in the sell rate and the net rate is calculated”

Joel Lillegraven – Holiday Inn Harborview / Sunstone Hotels

15

Identify Targets

Internet Players

Hotels managing multiple sites or with the potential to do so

Hotels in markets where on-line distributors are generating significant traffic

RateView Subscribers

Weaker Brand Hotels

Stronger brands are building direct connects with Expedia or other merchant

Hotels needing to comply with Rate Parity strategies

Hotels that need to diversify their distribution portfolio

Clients using EZ Yield

Do not offer iHotelier and CHM within the same four month period

Pre-call Pre-call

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Call Preparation, the Value

$50k salary x 20% of the RM’s time= $833

250 room hotel @ 70% occupancy @$175 ADR

generates $918,759 in revenue a 2% increase due to better

Revenue Management would yield incremental revenues of= $18,375

4 Suites per month (incremental) @$200 (2 night stays)= $1,600

3 new sites to the distribution portfolio

Four reservations from each site @ $150 (2 night stays)= $3,600

1

3

4

2

$24,408 * per month$292,896* incremental

revenues per year

+ Strategic Value

What’s the value of CHM to this hotel?

Pre-call Pre-call

17

Value Calculator Pre-call Pre-call

Functionality

19

Two Components to CHM

ChannelManager has two key features that enable hotels to regain control of pricing and inventory:

Price PointManager

Functionality provides hotels with the ability to: Easily maintain contracted allotments

Implement pricing across multiple websites with one click

Load multiple Room and Rate types

Functionality provides hotels with the ability to: Set thresholds to trigger additional inventory to maintain availability.

Establish cross-channel selling limits

AllocationOptimiser

20

Logging-in to Channel Manager

Clients access Channel

Manager by logging in

to the EMC on

www.travelclick.net

21

Channel Manager on the EMC

22

Room Manager Enables Hotels to Sell Multiple Room Types on the Extranet Sites

23

CHM Provides Hotels With The Ability to Easily Sign Up for New Sites

24

Allotment Characteristics Alert Users if Changes Violate Merchant Contract Rules

25

Pricing Characteristics Calculate Net Rates & Review Pricing Adjustments

26

Contracted Cutoff Dates are Setup by Channel as a Default Setting

Users can modify these settings by day in the Room Allotment Calendar

27

Extranet Access Info Required to Implement Pricing and Allotment Changes

Booking Updates pull in data from the extranet sites

28

Validation Rules is a Mechanism to Guard Against Data Entry Errors

29

Pricing Control Provide Hotels With Two Rate Parity Options

•Consumer Rate Parity•Net Rate Parity

30

Create Multiple Rate Categories to YieldHigher Net Rates

31

Offers Users Date Range and Calendar View

Date Range View is an efficient way for a hotel to enter consistent

pricing over an extended period of time

32

Calendar View

Net Rate Calculator

Easy access

to

RateView

Efficient way to change

rates on individual days

33

Net Rate Calculator

Hotels employing a consumer rate parity strategy can easily change rates

by entering one rate. CHM will calculate the appropriate net rates and load

them into the extranets.

34

Managing Room Allotments in Channel Manager

Displays

Availability on each

channel

Modify

channel

availability

Modify

channel

restrictions

35

Avoids sellouts by allocating inventory to sites based on Sales performance

Contract: Contracted allotment.

Above: Maintain availability

in sites by distributing

additional inventory

Threshold: Determine when to distribute inventory to merchant sites.

Creates efficiencies in managing extranet availability

Allocation Optimiser

36

Sales Limits – Force Web Distributors to Compete for Availability

Allocation Optimiser

37

Inventory Monitor – Provides Hotel With Snapshot of Bookings

38

Inventory Monitor Booking Totals

39

Inventory Monitor Booking Pace

Internet Coverage

41

Strategy

Provide Hotels with wide Internet distribution capabilities Help hotels to diversify their distribution portfolio and to level the playing

field Intelligent addition of sites to provide coverage across:

Merchant Sites Retail Sites Destination Portals CVB Sites

We want to work with smaller sites, but many of them don’t drive significant business Why? How can ChannelManager help them?

42

The Affiliate Program Concept

Affiliate Program: Allows any site to co-brand or private label a booking engine from one supplier or from a network All reservations generated through the site are tracked, reported and commissions paid for them

43

Affiliate Programs

Largest Affiliate programpart of IAN.com (thousands)

Frommers, Amtrak, America West, etc

Not a very strong programstarting to put focus on it

EarthLink, Knight-Ridder.com, Fodors.com, JetBlue, etc

A lot of emphasis in theaffiliate program -WWTE-

Doesn’t have an Affiliate program

Fairly strong Program

44

Current CHM Coverage

The top sites cover close to ¾ of the total on-line activity

45

Share of Web Visits (traffic)ate

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

Expedia /

TravelN

ow

Travelocity/Y

ahooT

ravel

Orbitz

Cheap T

ickets/Lodging

Hotw

ire

VIP

fares

Priceline.com

ITN

.net

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

72%

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Bottom Line……

As shown in the previous graph, if a hotel plays with IAC, Travelocity (via Saber,

the merchant model is still small), Orbitz and Cendant (Lodgning / Cheap tickets) it

covers 72% of the web’s exposure window

Because the on-line travel industry is highly concentrated (80% of the business is

generated by 20% of the sites) the Web coverage we can provide is as good as EZ

Yield’s

Getting incremental coverage requires the addition of a significant number of sites

47

Our Premium

Based on:

Local Support (DOSs)

HOU/BCN product-specific Support

HOU/BCN Revenue Management Consultative Support

Scalability of our system (integration with RV, iH, etc), EZY is a dead end

Sound development process translates into a more reliable product

Working with a sound and reputable company? Priceless!!

Sweeteners (media credit and ITHT one-year subscription)

48

Packages

Price Point Manager:

1. Price Point Functionality

2. Unlimited technical Support

3. ITHT or $500 media Credit on next marketing Campaign

4. Set-up and training

5. Does not include any Revenue Management Support

$2998 for 12-month subscription plus $750 set up fee

$3.28 daily premium over EZY,,, express the premiums as a per day figure

49

Packages

Price Point Plus: Same as above plus Revenue Management Support 50% discount for the Allocation Optimiser Add-on

$3,396 for 12-month subscription plus a $750 setup fee

$4.37 daily premium over EZY,,, express the premiums as a per day figure

Our consultative services at a $1.09 per day!!!

50

Revenue Management Support

Advise on issues such as: MLOS, CTA, CTD, Rate Selling Strategy vs Competition Packages Price Point Use different Rate and Room Categories to tap into new segments Selling Rate vs Net Rate Parity Which channels should a hotel work with Proactive approach giving them specific recommendations on the basis of

an assessment Sell them other TC products Strategic advise for managing cross-channel selling limits How to negotiate better contracts

51

We will get a premium over because of our superior technology, proven ability to increase revenues, ability to bundle related marketing products and services, our local (consultative) and Product-specific support

Our Pricing Philosophy

52

Next Steps & Enhancements

Gradual addition of five more sites by the end of June Channel News On-line Community Space Further integration of RV with CHM

Even further into the future: More sites added (leisure wholesalers, Tour Operators and Activity Sites) Integration with iHotelier