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One travel is bankrupt !

Travel Industry Secrets !

OneTravel.com is the definitive website for the traveler on a budget. Customers can easily search and book bargains from 500 airlines, 54,000 hotels, 48 car rental companies, and over 1 million vacation packages and cruises for domestic and global travel. AirSave : Save up to 70% off your next trip!
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OneTravel Holdings will emerge from bankruptcy in 45 to 60 days with a new owner, a downsized staff, a reduced cost structure and new technology that will enable the company to be profitable, according to OneTravel President and CEO Ed Wegel.

OneTravel's unpaid commissions remain a question (07/28/2006)

By David Cogswell found at http://www.travelweekly.com

But it remains unclear whether the agents who sued OneTravel’s subsidiary FS SunTours (a.k.a. SunTrips) will ever see their unpaid back commissions.

OneTravel filed for Chapter 11 bankruptcy on July 7. OneTravel’s No. 1 secured creditor, Palisades Master Fund, extended a loan of approximately $3 million to the company to keep it afloat while the reorganization takes place. Palisades also put up a bid to buy the company.

“We’re talking to potential buyers,” said Wegel.

“We’ll receive bids in the next several weeks. In six weeks we’ll hold an auction, and the company will be sold.”

The core business, which consists of the travel Web sites OneTravel.com, 11thHour-.com, CheapSeats.com and DiscountHotels-.com, is sound, Wegel said, with $260 million in gross annual bookings.

OneTravel has attributed its troubles to its purchase of SunTours, a traditional wholesaler outside of its online business model. “That acquisition turned out not to be successful,” Wegel said.

But the online businesses have not been profitable either “for a number of reasons,” he acknowledged.

“The company grew too fast. It needed to reorganize. CheapSeats bought OneTravel from Amadeus, and there was an integration expense.”

The company has now trimmed $8 million out of its yearly costs by cutting staff and shifting from keyword marketing on Yahoo and Google to more direct-to-consumer marketing.

It recently implemented dynamic packaging on its sites, Wegel said.

“We’ve increased our net margin from 7.5% to 10%,” said Wegel. “The big ones are in the 14% range.”

To achieve such margins, the company needs to become less airline-centric, he said, and sell more hotels and car rentals in packages. The company also plans to redesign its sites to increase their “stickiness” and their conversion rates.

Al Anolik, the attorney representing agents who claim in a class action that they are owed more than $1 million in commissions, vows to be a thorn in OneTravel’s side.

In early July, Anolik filed to force FS SunTours into involuntary Chapter 7 bankruptcy. At press time, he said he had not yet received a response to his petition, and he said that OneTravel may try to pull SunTours into Chapter 11 (reorganization) instead of Chapter 7 (liquidation), Anolik said.

“If they ask for reorganization, then we will protest and say that as part of the reorganization they should pay off some agents,” he said.

To contact reporter David Cogswell, send e-mail to dcogswell@travelweekly.com

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