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Pegasus Solutions Ending Property Management 
System Agreement with InterContinental Hotels Group
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Pegasus Exiting Property Management System Business
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DALLAS (June 29, 2005) — Pegasus Solutions, Inc. (Nasdaq: PEGS) today announced that it has reached a mutual agreement with InterContinental Hotels Group to discontinue the use of the PegasusCentral Property Management System (PMS). The PMS product will no longer be used in the Holiday Inn Express properties currently using the system, and there will be no new installations.

“After a careful evaluation with IHG, we concluded that we could not meet their needs with PegasusCentral and generate the kind of revenues and profitability that we expect from our products and services,” said John F. Davis III, president and CEO of Pegasus. The company will continue to support PegasusCentral during a short transition period.

“It’s been our pleasure to work with Pegasus over the last four years, and we look forward to continuing our relationship as they serve our distribution and financial services needs,” said Angela Brav, IHG’s senior vice president of Applied Technology. 

Pegasus also announced its intention to exit the property management system business. The company’s PMS products have both chain and independent hotel customers, including a private-label PMS for Best Western hotels. The company further commented that it is currently in discussions with potential buyers to sell all or parts of its PMS business. The PMS business is expected to be sold within one year.

“We’ve had a long run in the property management system business,” said Davis, “and while we will no longer develop our own system, we intend to work closely with a number of property management companies to ensure their products integrate with our central reservation and distribution products.” The integration of these products will pave the way for delivery of the Next Generation Hospitality Engine, an effort which Pegasus has been leading for the last year with a number of hotel chains.

As a result of the company’s termination of its property management system agreement with IHG and the company’s plans to discontinue its PMS business, Pegasus anticipates that it will incur a substantially non-cash after-tax charge in the range of $10 to $12 million in the second quarter of 2005 to write down the carrying value of PMS assets to their estimated realizable value. This charge includes an estimated $1.1 million (pre-tax) of cash expenditures for transition costs. Pegasus expects to classify the PMS business as a discontinued operation in accordance with SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”

With its four service lines—representation services, including Utell by Pegasus™ and Unirez by Pegasus™; reservation services; financial services; and, distribution services—Pegasus provides the most comprehensive set of technology solutions and services to hotels and travel distributors around the world. Every product is designed to streamline customers’ end-to-end processes, maximize their revenue and profitability, and help them capitalize on opportunity.

About Pegasus

Dallas-based Pegasus Solutions, Inc. (Nasdaq: PEGS) is a global leader in providing technology and services to hotels and travel distributors.  Founded in 1989, Pegasus’ customers include a majority of the world’s travel agencies and nearly 60,000 hotel properties around the globe.  Pegasus’ services include central reservation systems, electronic distribution services, commission processing and payment services, and marketing representation services.  The company’s representation services, including Utell by Pegasus™ and Unirez by Pegasus™, are used by more than 7,000 member hotels in 140 countries, making Pegasus the hotel industry’s largest third-party marketing and reservations provider.  Pegasus has 18 offices in 13 countries, including regional hubs in London, Scottsdale and Singapore.  For more information, please visit www.pegs.com.

Some statements made in this press release are forward-looking statements within the meaning of the federal securities laws, including statements using terminology such as “may,” “will,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “potential,” or “continue,” or a similar negative phrase or other comparable terminology regarding beliefs, hopes, plans, expectations or intentions for the future.


 
Contact:

Susan K. Cole-Conner
(214) 234-4140
www.pegs.com
Cindy Foor
 

Also See: Pegasus Solutions Expands Presence in Asia-Pacific Region with Opening of a Beijing Office / June 2005
Wynn Las Vegas Selects Pegasus Solutions’ Electronic Distribution Services to Reach Consumers and Travel Agents / May 2005
Pegasus Solutions Adds 150 European Hotels to Representation Service / May 2005
Sol Meliá Selects PegsTour®, Service Grows as More Wholesalers Seek Automated Hotel Reservations through Pegasus Solutions / May 2005
Pegasus Solutions Enhances Global Reservations Service with Instant Confirmations of Utell by Pegasus Member Hotel Bookings / March 2005
2,200 Utell by Pegasus Member Hotels Slash Rates Through Worldwide GREATRATE Promotion;
Program Discounts Rates by as Much as 50 Percent at Prominent Independent Properties / March
 2005
Pegasus Solutions Expands Relationship with Caribbean Hotel Association / January 2005
Pegasus Solutions Renews Distribution Agreements With Marco Polo, Meritus, and Taj Hotel Chains / December 2004
Pegasus Solutions Expands Presence in China Through Electronic Hotel Distribution Agreement with Ctrip.com / December 2004
Pegasus Solutions Brings Electronic Hotel Booking Service to New Trans-Atlantic Customers / November 2004
DER Group Selects Pegasus Solutions’ Electronic Distribution Services to Launch New European Travel Web Site / November 2004
Pegasus Solutions Introduces Weekly Hotel Commission Processing for Travel Agents / November 2004
Pegasus Solutions Extends Hotel Commission Processing Contract with Hyatt Hotels & Resorts / October 2004
Asia’s Hard Rock Hotels Join Utell by Pegasus Portfolio for Global Marketing, Distribution and Representation Services / October 2004
Pegasus Solutions Expands Relationship with La Quinta via Commission Processing Services for Baymont Inns & Suites / September 2004
Pegasus Solutions Processing Travel Agent Commissions Worldwide for Hilton International / August 2004
Pegasus Solutions Speeds RFP Process for Utell by Pegasus Member Hotels Via Deployment of New Lanyon Technology / July 2004
Pegasus Solutions Providing Global Internet Distribution Services for Accor Hotels / June 2004
Pegasus Announces New Customers for PegsTour™ Service and New Agreements from Its Hotel Company Customers / June 2004
Pegasus Announces Plans for Newest Version of its NetBooker™ Booking Engine for Hotel and Travel Portal Web Sites / June 2004
Pegasus Solutions Providing Electronic Distribution Services to Seminole Hard Rock Hotel & Casino Properties in Florida; Automated Connectivity Delivers Real-time Reservations Via GDSs and the Internet / May 2004


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