Sabre Holdings chairman and CEO Sam Gilliland recently sat
down with Business Travel News
editor-in-chief David Meyer and senior editor Jay Boehmer to discuss the
industry's next steps in distributing ancillary airline services through the
global distribution system, the growth of hotel bookings through the channel
and the evolution of follow-the-sun travel management.
Business Travel News:
What is your focus in terms of enabling ancillary airline services through the
GDS?
Sam Gilliland: What is important in the
coming months and years is the front-end shopping, so the consumer and traveler
is making the right choice up front. Clearly, our position has been one of
wanting that data available during the shopping process. I go to a grocery
store and I can look at all the different items on the shelf. I can shop by
brand if I want, but I can also see the unit price right there on every item,
and it's very simple. Now, I don't know that it was simple to put in place, but
it's really easy for the consumer to make a brand choice or a price choice.
That's what we need to do in the shopping process.
We'll be focused on that, and we want to make it as
frictionless as possible. We have no intentions of charging fees for those
distribution capabilities, while on the other hand there will be costs to
implement that kind capability in the GDS. While there have been some talks
that there is a technology issue, it's not a technology issue. The display to
the consumer may be one area where you have to put a fair amount of thought in
the design of it so it's understandable, but the technology itself is not a
problem.
BTN: As your Air Total Pricing initiative proves, though, you don't need airlines' participation
to display the cost of the trip at the point of sale.
Gilliland: True
enough, but you want those capabilities to be bookable during the shopping
process. Some of them, maybe it's not as important. As an example, I for one
know whether I'll have a checked bag when I book a trip, because I never check
a bag, but some people don't know what they're taking along with them, so you
may not want to buy that up front in the shopping process and instead just take
care of it at the airport. There are other things that over time will be
offered during the shopping process, and you'll want to get that squared away
before you get to the airport.
Having the data there is important, but bookability is
important in some cases, but there are things you'll want to take care of at
the airport as well.
BTN: How much
buy-in do you need from the airlines for Air Total Pricing?
Gilliland: We'll
want the airlines signed up, if you will, for providing that type of data. That
way, we'll have the richest, most up-to-date information that might be
available. Look at our Car Total Pricing product, which came out quite a few
years ago. It was hugely successful because it allowed the customer to have a
good understanding, before they turned their car back in, of what they had
purchased. Down to the nickel, it was predicting what the price would be. That's
what we're looking at here as well. We don't want any surprises and we want
travelers to have the information before they leave.
Broadly speaking, we would have to have the airlines bought
in. We have a number that are both bought in and want to make buying their
services easy through the travel management company and through the global
distribution system. That's been clear in the types of distribution agreements
that we've reached with numerous airlines over the past year or two. There are
some that seem to want to buck the system and others that feel like they want
to make it easy, in particular for high-yield customers, so that they have a
good shopping and buying experience.
BTN: The industry
should be able to provide it without regulation, right?
Gilliland: I don't
know. Maybe. I think that sure should be the case, but I think in some cases
the airlines need a push. We've seen that in the past, and maybe they need a
push here too.
BTN: As we see
airlines adopt more joint ventures, does that impact their approach to
negotiating with GDSs?
Gilliland: They
don't have the immunity to do that with the GDS. They do with others, but not
with the GDS, so I don't expect that we're going to change our approach there, but
who knows? There may be an opportunity to engage with a larger group of
airlines, but we're not compelled to. It may be something where we might
approach them, or they might approach us. There aren't any rules in terms of
how we engage with an airline or several airlines.
BTN: We've always
seen hotel adoption lag airline adoption when it comes to bookings. Is the gap
closing?
Gilliland: It's
been interesting to see this year the increase in hotel bookings on a
year-over-year basis through the GDS, even exceeding what we're seeing in terms
of air growth, which has also been quite nice. What we call the attach rate
between an air booking and a hotel booking
has been relatively low historically. There's still a lot of
headroom there in terms of getting more and more travel counselors and travel
agencies comfortable with the integrity of the rates in the system.
I think many more people are getting comfortable and many
more travel management companies are getting comfortable booking hotels through
Sabre or other GDSs, because there's been a lot of effort to make sure we have
all the rates in the system, which had been an age-old issue. Then, it always
goes back to the content question: Do we
have all the properties in the system that they want? There's
been a big effort on our part, and I'm sure on the part of our competitors, to
get more content—both the properties themselves and all the rates that are
applicable to a particular corporation or travel management company.
BTN: Does Sabre
have any plans to follow competitors in efforts to go public?
Gilliland: We
haven't made any decisions about when or if we might be a public company again.
BTN: Do you
expect more companies to adopt the follow-the-sun strategy, in which they use
one global GDS, one global TMC and one global technology platform, or are we
still in the early days?
Gilliland: If you
think about those that have really been focused on this, we're really only
three or four years in. I think more widespread adoption comes in the coming
several years. We are seeing more companies do this. That requires them to
either have the resources themselves or partner with those that can do that for
them on a global basis. There are several TMCs that can do that and do it
well—certainly from a Sabre perspective, we feel like we know how to do that
well. There are some markets that we need to enter that we're not in today, but
our geographic footprint and service footprint is such that we can and do
service corporations well on a global basis. Where we may not have a solution,
we find them. In some cases where there's a market we need to be in, we move
into that market to provide the service offering that a global corporation
needs. There are a few spots where we need to move into over time.
How far down the market segment will we see it go? It's a
little hard to say at this point. That's not so different from what you see in
many of these business-to-business lifecycles anyway. You've got the early
adopters in B-to-B, and it takes five, seven or even 10 years in some cases for
what happens with early adopters to make its way to the larger market.
Today, you need a multinational company with a lot of
resolve around getting to a global service offering and really wanting to push
for those types of efficiencies, and if it's not a top-down approach, it will
never get there. You need the right culture and the right resolve from the top
to get there.
BTN: What makes
Sabre Red different from previous generations of Sabre desktops?
Gilliland: I've
been with Sabre for 22 years. I started in the agent desktop area, and I was
writing code for the agent desktop. I have both been a part of and I have
witnessed Sabre rolling out many different desktops. Some were intended to get
to a more graphical set of capabilities, and we had more or less success in
those, but we've invested a lot. I'm really excited about Sabre Red and what it
does. I'm excited about the flexibility it offers up, and I think we're going
to be able to automate workflows in ways we haven't before. Now, we automate
them today, but gearing the workflow to the exact criteria or specification of
the customer and integrating a lot of different data in the same desktop—that
could be multi-GDS, could be many different types or sources of data—that can
all come together in one place. It is a really flexible platform and we've
gotten great feedback on it. While it will offer many of the same feature
functions you've seen in our desktops before that can accommodate those agents
who really like what we've had before, we will be offering graphical interfaces
as well, since we have a younger workforce that is inclined toward that.
I'm thrilled about it, and I haven't been as excited about a
desktop offering as I am about this one in many years. I would like to think
that some of the ones that I rolled out years ago were better, but I don't
think that they were.
This report appeared
in the Oct. 25 issue of Business Travel News.