Orbitz 2009 Annual Report Download - page 7

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The global hotel supply team is responsible for negotiating agreements that provide us access to the
inventory of independent hotels, chains and hotel management companies. As part of our efforts to grow our
dynamic packaging and hotel net revenue, we have significantly increased the number of hotel market
managers on our global hotel supply team, particularly in Europe and Asia Pacific. With these additional
resources in place, we have signed a substantial number of new direct hotel contracts, and we anticipate
realizing the benefits of these direct relationships.
Global Distribution Systems
Global distribution systems (“GDSs”) provide us access to a comprehensive set of supplier content
through a single source. Suppliers, such as airlines and hotels, utilize GDSs to connect their product and
service offerings with travel providers, who in turn make these products and services available to travelers for
booking. Certain of our businesses utilize GDS services provided by Galileo, Worldspan and Amadeus. Under
GDS service agreements, we receive revenue in the form of an incentive payment for each segment that is
processed through a GDS.
Galileo and Worldspan are subsidiaries of Travelport, and we have an agreement with Travelport that
covers the GDS services provided by both Galileo and Worldspan. This agreement contains volume
requirements for the number of segments that we must process through Galileo and Worldspan and requires us
to make shortfall payments if we do not process the required minimum number of segments for a given year.
As a result, a significant portion of our GDS services are provided by Travelport GDSs. For the year ended
December 31, 2008, we recognized $108 million of incentive revenue for segments processed through Galileo
and Worldspan, which accounted for more than 10% of our total net revenue.
Operations and Technology
Systems Infrastructure and Web and Database Servers
We use SAVVIS colocation services in the U.S. to host our systems infrastructure and web and database
servers for our Orbitz, CheapTickets, the Away Network and Orbitz for Business brands as well as our
ebookers brands. The majority of our hardware and other equipment for operating our business is located at
the SAVVIS facility. SAVVIS provides data center management services as well as emergency hands-on
support. In addition, we have our own dedicated staff on-site at the facility. If SAVVIS was unable, for any
reason, to support our primary web hosting facility, we have a secondary facility through Verizon Business,
which is also located in the U.S.
We use British Telecom services in the U.K. to host our systems infrastructure and web and database
servers for ebookers legacy systems and for HotelClub and RatesToGo. The arrangement with British Telecom
is similar to the arrangement described above with SAVVIS.
Under a transition services agreement entered into at the time of our IPO, Travelport also provides us
colocation services in its data centers located in the U.S. and U.K. We are actively migrating from the
Travelport data centers to the SAVVIS and British Telecom data centers. We anticipate completion of this
migration by the end of the first quarter of 2009, thus eliminating our dependency on Travelport for these
services (see Note 18 — Related Party Transactions of the Notes to Consolidated Financial Statements).
Systems Platform
Our systems platform enables us to deconstruct the segment feeds from our GDS partners for air flight
searches and then reassemble these segments for cost-effective and flexible multi-leg itineraries. We also have
the ability to connect to and book air travel directly on certain airlines’ internal reservation systems through
our supplier link technology. Our easy-to-use Matrix display allows customers to simultaneously view these
various travel options so that they can select the price and supplier that best meet their individual travel needs.
In addition, our dynamic packaging technology enables travelers to view multiple combinations of airlines,
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