Agencies To Buy MIDT: Sabre Will Hide Corp. Data From Airlines By Fourth Quarter

Sabre last month announced an initiative to derive additional value from its core technology by selling to travel management companies booking data previously only affordable to large airlines and tools to support preferred vendors at the point of sale.

The Southlake, Texas-based global distribution system also is programming in a new corporate identification number that by year-end will allow travel agencies to roll up corporate account information while making it invisible to airlines, citing a privacy-related request by the National Business Travel Association. The new identifier expands on Sabre's decision as of May 1 (BTN, March 4) to encrypt data sold to airlines in an attempt to prevent carriers from poaching travelers already booked on competitors—that is, "unless the agency wants them to," said Eric Speck, who Sabre last week appointed chief marketing officer.

Airlines pay millions a year for MIDT, marketing information data transfer, data they use for schedules, fares and preferred relationships.

Meanwhile, following a test among 30 agencies, Sabre next month will provide through its browser-based Webtop interface—which Speck said is in its "initial phase"—a temporary fix that gives a view of Web fares via New York-based Fare Chase's screen-scraping technology.

The industry still is coming to grips with what Sabre said it is providing with these and other new tools, packaged as the Empowering Agenda. The initiative could bolster Sabre both in competition and cooperation with suppliers and agency automation providers. Others, including American Express, Galileo and Rosenbluth have developed or are developing similar products.

The moves also are designed to extract value out of the core GDS transaction processing facility technology as it becomes just another source for travel inventory, rates and data reporting. Sabre's fastest-growing booking channel, the GetThere subsidiary for corporate self-bookings, has developed a platform that no longer counts the TPF as its only source, recently adding a live connection with American Airlines.

Sabre said beginning this month it will sell to agencies, under the Sabre Magnify brand, slices of MIDT data and yield management tools to forecast, measure and dynamically shift bookings toward preferred suppliers.

Eighteen months in the making, Magnify is designed "not just to highlight preferred sales options," Speck said. "The agency inputs all the terms and conditions of agreements they or their clients may have, whether by month or quarter, city pair or regional, etc. Then we put real-time MIDT booking information into a rules engine embedded within the TPF system to steer the agency toward maximizing performance."

Sabre does not obtain from airlines flown data, on which some corporate-airline negotiations ultimately are based. "Say you have a corporate account that has net deals and you need to meet a certain percentage of market share to maintain the contract after a year," said Steve McKnight, an associate with San Diego Travel Group, a business-oriented agency that has been testing Magnify. "We can program Magnify to track that one account using a dedicated pseudo-city code. When they fix the bugs, we will be able to identify where the corporate customer needs to push more business to a given supplier. The airlines have always had this data. So it's about time that we have it too."

A component of Magnify due out this month known as Revenue Insight will allow agencies to compare their performance with a peer group. "You can't see what a competitor is doing, but you can compare with each other in aggregate," Speck said. "Agencies, in many cases, have been flying blind without these dials on their dashboards." Asked about competitors, Speck said: "From what I can tell, no one else comes close to this in terms of sophistication. Nobody has our breadth, but we certainly have competitors in various niches."

Galileo International subsidiary Bradenton, Fla.-based Shepherd Systems last week announced its own MIDT tool for agencies, called Agentflash, which already has five clients. Using Agentflash, agencies can monitor the sales performance of each outlet or account "and take corrective action by alerting the appropriate parties through the system," it said. Shepherd president and CEO Mike Malik said his company identified the agencies as possible customers "a couple of years ago. I thought there was no one else until this Sabre thing appeared out of the blue." Parsippany, N.J.-based Galileo, a subsidiary of Cendant Corp., will sell Agentflash.

Malik said Galileo later this year will mask the PNR record locator, the same field of MIDT data Sabre has encrypted, in feeds to airlines that are not part of the reservation. "We're not rushed because we haven't had any major complaints about poaching that I'm aware of," he said. "We want to find the best mechanism for it."

Sabre will charge agencies, based on their size, a monthly subscription fee for Magnify products. Shepherd charges $7,500 a month for the Galileo MIDT data. Both companies said they will sell other GDSs' MIDT information for an additional price.

Philadelphia-based Eclipse Advisors, a unit of Rosenbluth International, is marketing products that use agency MIS booking data to "inform agencies of underperforming and overperforming markets," said managing partner for business development and marketing, Sumeet Bhullar. The Eclipse products now are in use only by Rosenbluth, but the company recently teamed with Atlanta-based data consolidator Hi-Mark (see story, page 4) partly to expand its agency customer base. "We may have other companies resell it for us," Bhullar said. Eclipse now can feed contract specifics into the GetThere corporate self-booking tool, he added. Menlo Park, Calif.-based GetThere recently revealed it automatically can load contract data into its system to steer travelers dynamically toward preferred suppliers. Speck said Sabre's Magnify tools will work the same way for GetThere clients on the Sabre GDS.

Also working with GetThere is American Express, which is developing its own point-of-sale preferencing tools for agents (BTN, Oct. 22. 2001). An Amex spokesperson said, "We're close to the end of testing and you'll see a formal announcement soon. I'm not sure we'd use a GDS offer because our point-of-sale methodology is unique to us." A Sabre spokesperson said the Magnify product line, "began as an offering primarily targeted to large agencies."



Choosing Sides?

If they work, some of the products Sabre is launching will prove beneficial to GDS-based agencies and their clients by helping them to drive market share. Sabre also made the argument that "Airlines will benefit because we're giving agents the tools needed to be a low-cost, highly productive distribution channel over the long term. We believe these tools will strengthen the alliance between airlines and agencies."

Airlines may not see these changes as improvements, however. In announcing the Empowering Agenda, Sabre limited MIDT data for which airlines pay millions, accused carriers of poaching and scolded them for "ignoring their obligations to publish their discounted fare content for Sabre agents," Speck said. He said the Fare Chase fix will not access content from Sabre's Travelocity, which Northwest Airlines vice president of distribution planning Al Lenza called a bigger threat to bricks-and-mortar travel agencies than Orbitz.

"There's nothing good for the suppliers in anything Sabre announced," Lenza said. "Sabre is trying to extend Web fares to channels that weren't intended by the supplier. We won't allow these search engines to ding our site to find fares. It doesn't matter if they will not be booked. Further hiding MIDT data detracts from its value. Sabre has done nothing here to address GDS costs."

As its creator, American Airlines is technically and culturally closer to Sabre than is Northwest, but even AA is at odds. "Some of those relationships are more contentious than complementary," said chairman and CEO Don Carty. "We think they charge unbelievably unfair and unreasonable CRS booking fees."

Carty said GDSs should "get that booking fee to a level where we think we are getting value for our money. It is absolutely possible, but if they don't do it, there will be more technology efforts to circumvent them. That is just a reality of the marketplace. If there ever is an unnatural flow of funds in any business, somebody tries to cut into it. Orbitz clearly is trying to cut into it."

Worldspan CEO Paul Blackney said Sabre is taking "an interesting approach" and is "clearly choosing sides."

According to CIBC World Markets analyst Paul Keung, "The gloves are off now between airlines and GDSs."