Travelocity, MasterCard Embark On Rewards, Sweepstakes Venture

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Travelocity and MasterCard International Inc. have entered a marketing alliance that made the credit firm the featured payment brand on the travel company's Web site.

Travelocity, Fort Worth, TX, and MasterCard International, Purchase, NY, also jointly launched a credit card and a Getaways Sweepstakes. Issued by Citibank USA, the co-branded card -- the Travelocity World MasterCard -- rewards MasterCard members with points and money toward future purchases every time they use the card on Travelocity's Web site,

With the co-branded sweepstakes, MasterCard members who make purchases on Travelocity by March 31 will be entered into a sweepstakes in which five entrants will win vacation awards to Europe, Hawaii or the Caribbean.

The announcement of the sweepstakes this month came more than two weeks after Travelocity issued formal apologies to 15,000 people for inadvertently placing their personal information on a link on its Web site while transferring data from servers in San Francisco to Tulsa, OK. The personal information was from individuals who had entered sweepstakes on the site from May to November. No credit information was exposed, however.

"That was an unfortunate incident, but we acknowledged it," said Chris McAndrews, senior vice president of leisure travel and media at Travelocity. "We've taken a series of steps to redouble our efforts to make sure that doesn't happen again.

"Hey, we wish it hadn't happened, but we have tackled it," he added. "It's a critical issue for our company to maintain the confidence or our users, and we think we've done that."

McAndrews said that in addition to sending apologies to users, Travelocity communicated with sponsors involved in those sweepstakes. He would not say whether MasterCard was a sponsor of any of those promotions.

Gary Grosso, vice president of North American Acceptance at MasterCard, said he was "not familiar with [Travelocity] sending out apologies." He did not know whether MasterCard was involved in any of the sweepstakes.

Under terms of the multiyear agreement, Travelocity is featuring MasterCard as its preferred payment brand at point-of-purchase areas on its Web site, McAndrews said. While other credit card companies are displayed on the site, he said, Travelocity has made MasterCard more visible and provides a link on its home page that drives users to a pop-up box describing MasterCard's zero-liability guarantee.

"We're doing nothing to restrict choice, but we're raising [MasterCard's] voice on the site," McAndrews said. "We're providing very tangible reasons for people to say, 'You know, I will use my MasterCard for this purchase,' and we're starting to see some of the results of that."

Travelocity saw an 8.1 percent conversion rate in the fourth quarter of 2000, McAndrews said, up 1 percent from the previous quarter. While other factors contributed to the increase, such as repeat purchases and a loyal customer base, the MasterCard deal "was definitely part of the reason," he said.

Meanwhile, MasterCard partnered with Travelocity in part because of the rise in online flight reservations, Grosso said.

"Projections are staggering, and of course Travelocity is the leader in that category, with over 22 million subscribers," he said.

McAndrews said MasterCard has been promoting the partnership through offline inserts included in monthly statements.


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