Hotel Online 
News for the Hospitality Executive

Online Travel Site,, Expected to Lose
 $12 million from Operations in 2003 Third Quarter
By Andrea Ahles, Fort Worth Star-Telegram, Texas
Knight Ridder/Tribune Business News

Oct. 17, 2003 - SOUTHLAKE, Texas--Sabre Holdings reaffirmed its third-quarter earnings estimates Thursday but said its online travel site,, will not be profitable this year.

The Southlake-based travel commerce company had told investors that Travelocity would break even by the end of the year after several years of losses. The company had also said revenues would grow more than 30 percent this year for Travelocity, but it lowered that number on Thursday to 20 percent.

"If there is anything disappointing, it is management's continued failure to meet the stated growth objectives," Paul Keung, an analyst at the CIBC investment banking firm in New York, wrote in a research note distributed Thursday.

Despite adding a service fee and rolling out new products, including a business offering, Travelocity still lags behind rival site Expedia and faces significant pressure from Orbitz, analysts say.

Sabre said it expects Travelocity to lose $12 million from operations in the third quarter and to report a loss for the full year.

The company attributed the lower earnings projections to declines in advertising revenue, fewer customers from its agreements with Yahoo and other Web sites, and a decrease in revenue from its agreement. had provided discounted hotel rooms to Travelocity until August, when the two companies had a breach-of-contract dispute. Sabre said Thursday that the two companies had ended their distribution agreement and that the financial terms of the settlement are confidential.

Shares of Sabre dropped 36 cents to $21.72 on the New York Stock Exchange on Thursday.

The company said it expects to announce third-quarter earnings of 18 cents per share and revenues of $526 million. Sabre's third-quarter earnings will be released Thursday.

Sabre spokesman Michael Berman said the company is not giving out full-year earnings guidance at this point, although the news release said Sabre expects its 2003 earnings to be below previously announced expectations.

Analysts expect the company to report 2003 earnings per share of 97 cents, not including one-time accounting items, according to First Call//Thomson Financial.

Sabre recently announced that it will lay off an undetermined number of employees this fall as it prepares its next-year budget and profit goals. The company also recently folded its corporate travel business, GetThere, into its three other business units.

Sabre employs 3,500 people in Tarrant County.

-----To see more of the Fort Worth Star-Telegram, or to subscribe to the newspaper, go to

(c) 2003, Fort Worth Star-Telegram, Texas. Distributed by Knight Ridder/Tribune Business News. TSG,

To search Hotel Online data base of News and Trends Go to Hotel.OnlineSearch
Home | Welcome| Hospitality News | Classifieds| Catalogs& Pricing |
Viewpoint Forum | Ideas&Trends | Press Releases
Please contact Hotel.Onlinewith your comments and suggestions.