Serko's Grafton discusses:
- Completing the GetThere integration
- Heading toward the next step with NDC
- Easing friction with AI
Early this year, Serko closed its $12 million acquisition of online booking platform GetThere from Sabre, making it the second-largest corporate online booking provider in North America. Serko co-founder CEO Darrin Grafton spoke recently to BTN executive editor Michael B. Baker about the integration progress as well as Serko's strategies around AI and New Distribution Capability. An edited transcript follows.
BTN: How is integration of GetThere progressing?
Darrin Grafton: We've just completed the last part of it in February, so it's all gone very well. Incredible kudos to both teams coming together both culturally and operationally to get everything running smoothly, and the teams from Sabre as well. Sabre for the next four years will be running the environment to create the stability with the customers and how it's set up across there. It's quite complex when you're carving out a division out of a business to bring all of those parts, because we also have to make sure we've got the capability and capacity to take on each of those sections that then come across with it as well. It's been fantastic to see the company absorb that and run through those processes.
BTN: With that acquisition complete, what are the top priorities for Serko now?
Grafton: One point would be to say what we're trying to do is build out next generation technology for the industry. One is, how do we bring a group of customers on that journey to help us actually work out where GetThere was, where they want the platforms to be, how does it need to really operate efficiently with the travel management community, and how do you build this marketplace around that? And that's what we're focused on.
GetThere's got this incredible talent pool of people that are passionate about the customer, that understand the complexity. We've got now right through [GetThere] U.S. government and high complexity and global managed programs. We've been doing really well in our section, which also does that in our home markets and part of the U.S., and then we have our [Booking.com for Business] SMB solution. We've got over 800,000 registered companies on the SMB platform, and then you have the spread of customers with GetThere and Zeno. That knowledge, of being able to get to a single platform on all those insights, is really the why.
Underneath that, both teams are now working on the architectural components that enable this next generation, embedding AI foundations into those sort of levels but taking the knowledge. What was incredible was that with GetThere, a big percentage of their platform had already started to go through this process, so the thinking was exactly the same. You'd expect that when you've got a team that's passionate about the movements in the market and what needs to occur. Looking at that, and how you create this next-generation framework, has been really exciting. That's where we're embedding into, and then, how do we go to market with the customers collectively and actually plug the right solution that fits them? And how do we seamlessly bring in that new technology with them as part of that journey?
BTN: You've announced a significant investment plan for the next few years. What will that entail?
Grafton: It's over $100 million, when you look at what we're spending in research and development today at Serko, then we're adding on to that. The key part of that is an all-business platform and an all-business marketplace that enables startups and all of the community to build with us. We don't want to build everything. Quite often, tech providers get caught up in thinking that they can solve every problem in the industry, and that distracts them from the core. We've seen that with a lot of the different startups coming into play and how they then move into becoming a [travel management company] or doing that sort of thing. We're saying no.
If we can get the true connected-trip framework in place, which is what we've patented and done, we can bring our TMC community, startups and everything to generate with us, and that means we can go deep on our platform, and they can go wide with us. That's kind of what we think is the next generation. At the same time, we can build the technology that potentially self-heals using AI when people change versions of APIs working with us. It just makes that part seamless. We're thinking about the problem really differently, and that's the uniqueness of what we're doing.
BTN: Might there be more acquisitions to come?
Grafton: My key focus is partner, build, buy, and it's in that order. While we're building our platform in the center, we kind of go, is there a partner that can actually work with us to help us jumpstart the width of our platform offering? If there's not, we'll build it. If there is a partner, we may look to invest into them to help them hit that acceleration and bring them as part of the overall platform across the whole suite of what we do. Then, if they're really, really good and work with us long-term, then potentially we'll buy them. It [lets] people be part of a group that's building up a community of technology that's next-generation for the market. That's my philosophy. So, we're always open to the right acquisitions and the right investments.
BTN: How do you plan to grow business with Booking.com?
Grafton: There are two angles with the Booking side. It's building the world's best small business platform for Booking.com and bringing in features and technology around that. That's a continual joint program between Booking and Serko, and we've got great teams working on that. We're building in New Zealand at least a world-class data science team, and that data science team can become the backbone of travel AI for our industry as well. You've seen the talent that we've brought on. We've just brought on Matt Gerrie for chief operating officer and his excellence in operational efficiency and data and strategy, and he's done it for Booking.com and Booking Holdings. So, it's exciting to have people joining us to help amplify that part of the journey.
BTN: What are your expansion plans in terms of geography?
Grafton: Part of our process of building a high-scale platform means we need to have around-the-world 24/7 support and 24/7 infrastructure around engineering capacity. Part of that GetThere acquisition was that we had a phenomenal team in India led by [VP of engineering] Sanjeep [Patel], who is ex-Walmart. We had an incredible talent of people there that we can build from. That's been our next hub, and then we have people in the U.K. now. We're starting to build out capability and capacity and then really looking at how we get really high-quality [global client solutions] function and also how we help customers best use the technology to do that.
We're very focused at Serko to make sure that the platform is already, for every part of that ecosystem, creating incremental value for them and on how we're delivering that,—whether it's for Booking.com, or Flight Centre or American Express or BCD—and how we create that incrementality at the same time.
BTN: What's your progress report with NDC?
Grafton: We're working with quite a few providers. You've seen our release on Sabre with NDC, and we're working together to make sure that as they bring new functionality, we're supporting it for the customers as well. That creates [no] direct conflict between channel partners, because I think a healthy ecosystem and supporting that model is absolutely key.
Then, you have partners like TPConnects, and you have other parties that are aggregating NDC. You have some of the direct connects with the airlines as well. We also have Amadeus NDC-X doing that work as well. The air content has almost become a standard.
That's just a consistent thing that will evolve and get better: fares, and I don't think we've actually seen the full offer of NDC, with bundles and corporate offers. We'll see an evolution as people learn what they need. It's really good at getting it to the corporate level, but as we get to driving what [you need] because [you were] disrupted on a flight, and then the shopping experience may get to the point where [a competing carrier] can come back with an offer in real time due to the shopping experience. [Maybe] you may offer them a $200 discount in real time on their next shopping experience.
I think loyalty in NDC will be the shift. How do we understand the human that's now in the process, affected by the process, and how can AI actually work with the airlines' NDC to actually achieve that outcome? We're going to go through an evolution of understanding. You had to embed it, activate it, learn from it and then get to that next step. We're heading towards that next step in NDC, and our job is to make sure all of those parts can work on any channel.
BTN: Where will you see the biggest impact from AI?
Grafton: I think friction. Travel is inherently complex. People think there's potentially 1,000 providers that work just to get [through a trip], an airline, from when you hop on the plane from the food, from Menzies [Aviation services], doing the things with all these different people that have to work together to get you and your bag through that journey, and we take that for granted now. Then, we have taxi services and all these sorts of things that collect along the way.
But when one thing goes wrong, the friction just amplifies. And we've been looking at how a framework needs to work to connect, and how AI can actually start to help build those connections and build the insights. That's where it's going to be a continual removal of friction. When you're flying, and your flight's disrupted, it's auto-changed. Imagine a world where when you land, you're delivered the boarding pass, and if you're having to stay overnight because the flight can't get you there, you're delivered your voucher on your phone. AI can help deliver that and make sure they're making the right choice. And, how do you make it contextual, to understand your calendar and understand your impact? AI can do a lot of the insights you would normally have to plug together to actually make happen. It's this continual movement of friction, and when we're looking at AI, what was really key for us was to understand the human element of that. The human element is, how does a small business, a government agency and the largest enterprises think about this, in every culture? We think about it in a one-country point of view, but we actually have to think about language sets, we have to think about how it interacts.
Some of the shifts in AI are not going to change the way people book. They may have a prompt and be able to type in a chat message, but what you'll find is people will still use the traditional processes. But the people that do their job every day, and you can simplify that and actually make it quicker for them and less repetitive so that they get more time to do other things or do their job easier, that will be the first impact. The people that are used to the same type of search will probably still default to that, and it takes about six years for that to really pick up. There's lot of excitement, but we see this curve in technology. Early adopters mainstream them through.
As Sean Gourley has come on [to Serko's board]—he was working on a panel with [OpenAI CEO] Sam [Altman] in the early days from OpenAI—he's an incredible mind. He's done Quid and Primer AI, and leveraging his knowledge on our board as an advisor and to how we can actually build a real unique travel AI model really excites me. You've got to back that up with really incredible data scientists and data talent, which is what we've done. We're doing the right things. It will take time.
BTN: We talked recently with Marriott CEO Anthony Capuano, and he also highlighted the potential around trip planning.
Grafton: It's quite incredible to think back in 2017 we were doing that, and when we presented it in 2017 with Ask Zeno, and I think it was 2019 [at the Global Business Travel Association convention] in Boston, we showed the first digital human where you could talk to and make a full omnichannel booking. And we showed that running with Booking.com at the last GBTA. The technology is already there, but it actually the foundations of that have actually been there for a long time. What we've improved is how the speech language and understanding of natural language has increased because of the large language models, which is amplifying that. It's balancing that with the hallucinations and all the other things that you still have to work through as a base model.
BTN: What's your strategy to accomplish all of this?
Grafton: One of the things that you're seeing from Serko at the moment, which I think I mentioned at the start is the talent we're bringing on, the people that are coming across from different companies to help us on the journey—really smart coming together to form and help the industry move together. We're trying to do it without the conflicts. We're trying to do it without acquiring a TMC and becoming something else. We're trying to do it to help the industry generally shift forward through the technology or use pieces of our technology.
As you'll see our platform evolve, you'll see that some of these parts that we may be able to bring together that are unique will help across the board, even through potentially to competitors. It's bringing great minds together to help solve the industry problems, and looking at it differently is quite key.