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Booking Ahead of OnlineMarch 1, 2008 By: Eric Butterman Home-Based Travel Agent
Reservations technology moves fast, and GDSs and online booking tools push each other to keep up
The travel industry has its share of complaints: delays, lack of personal service, cutthroat methods. And that's sometimes referring to the agent side of the business, not just the airlines who try their hardest to hold on to what little market share they can muster. The GDSs are down to three players and the jury's still out on whether consolidation has strengthened technology or weakened the spirit of competition, something necessary to further the legacy of companies once married to the Legacy system. Here, we look at the latest booking solutions and strategies—and how online competition continues to change the playing field. Travel agents have grudgingly accepted help from online booking tools
A Consumer Feel
Owen Wild, director of marketing for Amadeus North America, says part of the booking tools' objective is to provide as close to what a consumer might see on an online travel site on the agent desktop as possible, but making sure all functionalities and office integration are also made through that process. "The payoff is when you start to see the look and feel of agent interfaces with a multimedia graphical environment," he says. "We are starting to see new products with integrated search capabilities by location and points of interest. We tried to go beyond the traditional sale of transportation to help people with on-sale experience through Amadeus Activities and Entertainment, which concentrates on theater recommendations, restaurants and the commission opportunities that go along with it. We need to encourage these points not just for moneymaking, but to clearly define what an agent can do that a website can't compete with." The tab is featured in its main selling area and includes a partnership with Unaira, a company marketing itself as a provider of tickets for local offerings in a wide array of destinations.
Henry Harteveldt, vice president and principal analyst of airline and travel research for Forrester Research, says this is a key way for agents to capitalize. "It's not that Amadeus didn't want to expand to this offering sooner, but you need to have the inventory and the providers to sell the product," he says. "It's one thing if you're integrating with a ticket broker service like Ticketmaster, which is selling tickets to hundreds of events; it's another thing if you're talking about a small mom-and-pop operation or local attraction that only does walk-up business or call centers."
Craig Cartwright, senior director of product strategy for Travelport, feels his company's Cruise and Tour, released in November, is a brand that allows their GDS to firmly compete. "It's a booking portal with strong direct and instant access to leading cruises and tour suppliers," he says. "It affords them the ability to electronically book cruises and tours rather than have to go to brochures or phone cruise lines directly." Cartwright says it goes beyond profiles and preferences to incorporate customer relationship management. "It's not just about new customers but satisfying repeat customers. Using CRM-related functions allows agents to be able to manage information, which will show their client they know them well and are looking out for their interests."
Lee Rosen, vice president of Sabre Travel Network, says booking tools need to be about saving time as well as impressing the client. "There was a day and a time when the GDS was about hardware training and everything linked to the back office, a one-stop shop technology," he says. "Now agents are getting their own PCs, own Outlook and Explorer and it's about coming up with a variety of ways to help in their itinerary processing system without having to reenter information three times. We start with our tool ClientBase. It allows you to send promotions to particular consumers, which truly takes into account their travel history and link to trips so it's one click to the shopping engine." TripTailor (released in 2007) gives the agents the ability to match components and create the package for credit card processing for their markup and goes from CRM to their process tools." TripTailor, which was up more than 50 percent at the end of 2007 versus a year before, features VacationStudio on MySabre to book custom cruises without having to sign a contract.
Future In Flight
Wild believes the future for GDS booking versus online comes down to one thing: seamlessness. "I think you will see continued expansion that gets away from the technical connectivity that bogged down the technology. We'll allow more types of travel suppliers an easy way via the GDS and always improve the scope of leisure content in terms of cruise. Also, there will be more choice in the automation provided for smaller agents using traditional GDS setups and those who want the full GDS with all economic benefits of a hosting model."
Harteveldt also believes Amadeus and Sabre getting away from TPF technology will be a huge advantage going forward. "They've substantially moved to open standards within industry standards to develop XML because hotel executives feel frustrated by the booking process and the restrictions the GDSs have had in the past. Hotels have trouble loading their rates into the systems and for cruise lines to do the booking through GDS, it still seems to involve call centers."
For the online competitors to GDSs, Harteveldt sees niche players such as Viator taking advantage. "They are becoming specialists in the non-transportation and non-accommodation part of the business through entertainment and events. Business partnerships and the standards from the Open Travel Alliance make it easier for the (ticketing) industry to take better advantage of the market."
Also, with many predicting that the economy is heading into a recession, online becomes more of a competitive player with the GDSs, particularly for low cost alternatives. Says Harteveldt: "Hotwire and Priceline are very different than they were when they started. Priceline is in the retail business as well as name-your-own-price, and Hotwire has limited branded content, but its core base business of opaque content has them positioned nicely for countercyclical times. The tradeoff of losing the convenience of customers picking their travel times and control will be worth it for the savings. These companies have been making good use of excess inventory and they have become smarter about the way they do business."
There's also, of course, the continued contradiction of GDSs owning the very websites that agents are competing with, but Harteveldt says that won't be changing any time soon. "For Sabre, Travelocity has been a mainstay of their success and allows them branding and travel value," he says. "However, as long as GDSs invest in tools agents need, they'll accept the drawbacks—though begrudgingly."
GDS BOOKING STRATEGIES
- 1. Incorporate Amadeus Activities and Entertainment to allow agents to show their flexibility and knowledge.
- 2. Get away from TPF technology to embrace more open technologies.
- 1. Continue to market TripTailor, which saw encouraging growth in 2007.
- 2. Utilize CRM tool ClientBase to help agents customize better with regard to clients.
- 1. Expand the focus of Cruise and Tour, released in November.
- 2. Continue to showcase and improve CRM offerings.
Harteveldt's Online Analysis
- 1. Viator and other companies focusing on event tickets can take advantage of the GDSs' limitations.
- 2. Opaque models Hotwire and Priceline will likely steer away customers if the economy heads to a possible recession.
- 3. GDS involvement with online sites such as Travelocity could lead to agent resentment if offerings aren't improved.
— Eric Butterman