Press Release: Pegasus Solutions, Inc.
April 5, 2002
DALLAS, TX -- Pegasus Solutions, Inc. (Nasdaq: PEGS) announced yesterday that it has finalized its contract with
Hotel Distribution System, LLC (HDS), a newly formed venture of Hilton Hotels Corporation; Hyatt Hotels; Marriott
Hotels, Resorts and Suites; Six Continents Hotels; Starwood Hotels and Pegasus. In addition, Pegasus has transferred
its consumer site, TravelWeb.com to HDS as part of Pegasus' capital contribution to the venture. Pegasus Solutions
is a leading provider of technology services to the hotel industry.
HDS was formed in February 2002 to distribute discount ``net-rate'' hotel rooms over the Internet. Utilizing the
technology leadership of Pegasus, HDS plans to provide Internet sites with the ability to sell hotel rooms at net
rates via direct connections to hotel central reservations systems.
TravelWeb.com, launched by Pegasus Solutions in 1994, was the first site to offer real-time online hotel reservations.
The site evolved to offer reservations and detailed online content for more than 42,000 hotels.
Under the three-year technology contract, Pegasus will develop new and innovative technology and provide related
services that will automate the net- rate reservation and ``merchant model'' processes for HDS and the participating
hotels. Pursuant to the contract, Pegasus will receive an initial payment of $1.5 million and a $3.00 transaction
fee for each reservation processed by the new technology.
``The current online hotel net-rate discount marketplace has been flourishing despite using virtually all manual
processes,'' said Pegasus Solutions Chief Executive Officer and Chairman of the Board John F. Davis III. ``Companies
offering net-rate inventory currently process all of their net-rate reservations manually, using faxes or email
to communicate hotel reservations between the hotel discounter and the hotel.
``Using the new Pegasus technology, hotels will be able to electronically and seamlessly supply net rates via their
central reservations systems (CRS) directly through Pegasus' Electronic Distribution System to net-rate providers,
significantly reducing the hotels' distribution costs. As a result, for the first time, hotels will be able to
conduct real-time revenue or yield management of their discounted net rates, ensuring that they leverage the discount
channel as it's intended to be used: to fill hotel rooms during low occupancy periods.
``In addition, HDS will be the first hotel discounter to use our new automated net-rate 'merchant-model mark-up'
technology, which provides the credit card processing and automatic rate mark-up capability,'' Davis said.
``The end result of our new net-rate technology will provide benefits to both online shoppers and hotels by providing
better information for consumers, greater accuracy in reservations and customer service, and more reliable efficiency
in reservation system connectivity to Internet retailers,'' Davis concluded.
Pegasus Solutions' Utell subsidiary is expected to be one of the first hotel suppliers to distribute net rates
through HDS. All of Utell's 5,500 hotel members will be able to use a single source to supply net rates to HDS
and any of its affiliates, such as Orbitz. By using Utell's Web-based NetRez system, Utell member hotels will be
able to dynamically open and close access to their net-rate room inventory based upon their last-minute occupancy
needs.
According to Forrester Research, the number of Americans making online travel purchases increased nearly 17 percent
in 2001, to 17.8 million U.S. households. Forrester also predicts that online leisure travel sales will total $14.2
billion in 2001, despite a 20 percent drop in overall travel industry revenues for the year.
COMPANY INFORMATION
Dallas-based Pegasus Solutions, Inc. (http://www.pegs.com ) is a leading global
provider of hotel reservation technologies. Its services include central reservations systems; electronic distribution
services that connect more than 42,000 hotels to the Internet and to the global distribution systems (GDS); travel
agent commission processing and payment services; the Utell marketing and reservation representation service (http://www.Utell.com ); and PegasusCentral(TM), a Web-based enterprise solution
with property management applications. Pegasus' customers comprise the majority of travel agencies around the world,
including the top 10 largest U.S.-based travel agencies (1); more than 46,000 hotel properties around the globe,
including 48 of the 50 largest hotel brands in the world based on total number of guest rooms (2); and thousands
of Web sites/services have their hotel reservations Powered by Pegasus(TM).
In addition to its corporate headquarters in Dallas, Pegasus has 22 offices in 16 countries, including regional
hubs in Phoenix, London and Singapore. The company's stock is traded on the Nasdaq National Market under the symbol
PEGS.
This statement contains references to future events and projected results, including anticipated transactions involving
the Company and its service offerings. There can be no assurance that the referenced future events or projected
results will actually occur or that the future financial performance of the Company will be as projected. Actual
occurrences, results and performance may differ substantially and materially from those projected as a result of
a number of risks and uncertainties, such as adverse changes in general market conditions for business and leisure
travel as a result of additional terrorist activities, action by U.S. military forces, changes in hotel room rates,
capacity adjustments by airlines, trends in the overall demand for travel, and the inherent difficulty in making
projections during this period of uncertainty, as well as other risks and uncertainties mentioned in this statement
or detailed in the Company's periodic reports and registration statements filed with the Securities and Exchange
Commission including its Form 10-K for the year ended December 31, 2000.
(1) Travel Weekly, June 25, 2001, "Top 50 Travel Agencies"
(2) Hotel Business, February 7, 2001, "The Top Hotel Brands"
SOURCE: Pegasus Solutions, Inc.