Emirates Deal To Boost Sabre's EMEA Presence - Business Travel News

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Emirates Deal To Boost Sabre's EMEA Presence

September 09, 2008 - 12:00 AM ET

Sabre Holdings today said it signed a 10-year distribution pact with Dubai-based travel services provider EmQuest, giving the U.S.-based global distribution provider entry into several African countries and further penetration in the rapidly growing Middle Eastern travel market.

Sabre also announced a separate 10-year content pact with EmQuest's parent company, Emirates Airlines, which begins immediately. Sabre Travel Network and Airline Solutions president Tom Klein said the Emirates contract represents the longest content agreement it holds with any carrier. The companies would not disclose the financials for either deal.

EmQuest, a travel distributor that works with travel agencies, suppliers and corporate customers, will distribute Sabre products and services to agents and travel suppliers beginning in January 2009. Klein said Sabre is working with the company to "define the service offering, which they'll lead on, and the product offering, which we'll lead on."

Sabre gained EmQuest's distributor business from Travelport-owned GDS Galileo, which will continue to operate under an agreement with EmQuest until the end of the year.

Travelport GDS president of Middle East and Africa Bryan Conway today said Travelport had been in discussions with Emirates to renew the agreement it has held since 1991. "In the end, we just couldn't agree to a foundation for the relationship going forward which makes sense for us," Conway said, adding that Travelport is working to bolster its direct agency relationships in the region, in some cases foregoing agreements with distributors like EmQuest.

Travelport GDS earlier this year "announced the intent to set up our own direct operations—direct to travel agents—in Egypt, Saudi Arabia and UAE, and to reinvigorate some of our distribution relationships in the region," Conway said. He stressed that the dissolution of its distributor agreement with EmQuest does not impact its global airline content deal with Emirates.

Conway said Travelport is by no means ditching the distributor model in the Middle East, but added, "Saudi Arabia is the largest market in the region, UAE is second and Egypt is third. In those markets we want to have as much control as possible. We felt we had the best opportunity to do that in a direct distribution model."

Conway said Travelport GDS claims "about 50 percent marketshare in the Middle East" and said the company is "making investments of well over $20 million this year to establish our presence in this region," setting up offices in the largest Middle Eastern markets. "We're not making that level of investment with the plan to lose business. Our plan is to grow in one of the most rapidly growing travel markets in the world," he said.

Sabre's Klein, meanwhile, said its new partnership will bolster Sabre's business in the Middle East—a region that already is experiencing double-digit percentage booking growth for the GDSs.

"We've been growing our presence in the Middle East and have been creeping up in the 20 percent range or so with our current book of business," Klein said. "This will greatly enhance that. You read so much about the BRIC countries—Brazil, Russia, India and China—but we really include the Middle East in that category, because if you look at the region's growth rates, they're in many cases exceeding the BRIC countries." Klein said the region relies heavily on the agent market for travel services, and "there's very low online penetration for travel sold."

Klein said the EmQuest agreement also gives Sabre immediate access to five African countries—South Africa, Kenya, Tanzania, Uganda and Zambia—creating untapped access to the region. "We don't play in a meaningful way in Africa today. Starting pretty much immediately we'll have EmQuest distributing us in Africa. Then in early 2009, they'll be distributing us in this region," Klein said by telephone from Dubai today.

Klein said some multinational corporate customers, including Oracle and Cisco, "have been pushing us to get into a few of the markets that we're going into, South Africa is a big example."

Emirates and Sabre in a joint statement said they would further cooperation, and Klein mused on some of the possibilities. "Obviously we have a big subsidiary that sells technology and services to airlines, with Sabre airline solutions," he said. "Emirates has their own technology company that services other airlines, but certainly there are things in our portfolio that we think makes sense for the airline. Also, online travel is pretty nascent in the region, so there are things to at least discuss where things go from an online travel perspective."
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