Face To Face With Sabre CEO Sam Gilliland - Business Travel News

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Face To Face With Sabre CEO Sam Gilliland

November 01, 2010 - 10:15 PM ET

By David Meyerand Jay Boehmer

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.

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