Pegasus Systems also today announced that it signed a strategic alliance agreement with PASSKEY.COM, Inc. in which PASSKEY.COM will integrate its Internet-based housing software with Pegasus' group reservations processing capabilities. As a result, once the hotel connections have been implemented, PASSKEY.COM's customers, which include conventions and visitor bureaus (CVBs) in major cities across the United States, will be able to utilize a comprehensive system that combines the technology strengths of the two companies, providing them with direct connections to these hotels. 

With more than 115 hotel companies as electronic distribution customers, Pegasus believes many of its existing customers will want to participate in this service. 

"Our hotel constituents asked us to help them find ways to reduce the distribution costs of meetings and conventions bookings as they pertain to large, single hotel and citywide group events," said Pegasus Systems President and Chief Executive Officer John F. Davis III. "Four of our hotel customers -- some of the largest hotel companies in the world -- have told us they intend to participate with us in our effort to provide a solution that best serves the needs of hoteliers, meeting planners, attendees and housing providers such as CVBs. With their support, we are moving forward with PASSKEY.COM to develop an industry-neutral, standardized system that will streamline group reservations worldwide. 

Hyatt's Senior Vice President of Marketing Thomas O'Toole said, "Groups are the foundation of Hyatt's business, so we support development of electronic group reservations solutions. Too often, focusing on efficiency can compromise customer service, however, the Pegasus/PASSKEY.COM alliance potentially offers benefits to all parties -- the meeting planners, CVBs, hotels and attendees." 

Pegasus Systems and PASSKEY.COM intend to provide a system that will be used by CVBs and other group housing providers to make group reservations and electronically transmit rooming information to the event hotels. The system will be Internet-based, providing attendees with the ability to make their own room reservations online, or through traditional call center methods. The system will have a secure centralized database of attendee reservations that can be accessed by authorized parties to generate reports and adjust room blocks in real time, as well as provide for more accurate reconciliation of attendance. 

Hilton Hotels' Senior Vice President of Marketing Robert E. Dirks said, "Providing negotiated-rate room availability for groups and conventions through the Pegasus/PASSKEY.COM system is a great asset for Hilton. The standardized electronic connections this alliance affords will make it even easier for guests attending meetings worldwide." 

Starwood's Senior Vice President of Sales and Marketing David Van Kalsbeek, commented, "Our customers have long awaited a standardized technology that will make the booking process more efficient, reduce costs and make it easier to make reservation changes -- the Pegasus/PASSKEY.COM solution will finally allow hotel companies to do just that." 

Marriott's Vice President of Distribution Sales and Marketing Bruce Wolff said, "We have high regard for both Pegasus Systems and PASSKEY.COM. As a leader in convention housing, Marriott is committed to participating in a standardized, efficient way to process citywide reservations." 

Company Information 

PASSKEY.COM, Inc., formerly Passkey Systems, Inc. (http:/www.passkey.com) is a leading provider of innovative, Internet-enabled convention and group hotel reservation solutions for the meetings industry.  Over three years in development, PASSKEY.COM's housing reservation system, PASSKEY.COM ResDesk, is based on extensive research into the unique requirements of convention and visitor bureaus, independent housing providers, meeting planners and hotels, and is in use today at major U.S. convention and meeting destinations. PASSKEY.COM was founded in 1996 and is privately held.  The company is headquartered in Quincy, Mass. 

Pegasus Systems, Inc. (http:/www.pegsinc.com) provides global electronic commerce and transaction processing solutions to hotels, travel agencies, meetings and convention planners, corporate travel departments and Internet businesses around the world. Pegasus Systems owns and operates one of the Internet's most popular travel booking sites, TravelWeb.com (http:/www.travelweb.com). Pegasus' customers include nine of the 10 largest hotel companies in the world and four of the five largest U.S. travel agencies. The Company's headquarters are in Dallas, with offices in London, and its stock is traded on the Nasdaq National Market under the symbol PEGS. 

This news release contains statements relating to future results, including services to be offered by Pegasus Systems, which are forward-looking statements regarding future events and the future financial performance of the company and for which no assurances can be made. Actual results may differ materially from those projected as a result of certain risks and uncertainties detailed in the Company's periodic reports and registration 
statements filed with the Securities and Exchange Commission.