David Radcliffe
HRG chief executive David Radcliffe spoke with The Transnationalduring an Association of Corporate Travel Executives conference here about the company's Universal Super Platform, which he said may be offered to the marketplace as a standalone product enabling other travel management companies to access content from global distribution systems, as well as other sources. An excerpt of the discussion follows.
Technology execs often say travel management companies shouldn't be spending money on technology as it's not their core competency. That's of course what they would say in their self-interest, but there is an argument to be made there, especially if you're not a large TMC. How did you justify the investment?
Sure, I agree. We spend a lot of time looking at the value between the TMC and the client, and a lot of our value will be in accessing appropriate inventory at the right price for the client. I think what's needed that has not happened is a common platform. The debate is still raging within HRG as to whether, ultimately, we release our platform to the industry. Anyone who says, "No, TMCs are not here for technology" ... well, I think the big ones have to be. It's quite well known in the industry that HRG has got this technology. It's a question of how fast it takes off, and that's really driven by the client.
Was the investment amount disclosed?
No, it was made when we were a private company. The big investment is in what we call Super Platform and that's the chassis or the bed upon which you plant all the other software and services. That investment is made. The rest of the products, like HRG Online or the traveler tracking products, can be planted on that chassis. In any case, it comes back to the driving forces for profitability. There is, in my opinion, some huge difference in the value of the TMCs to the client. Those TMCs a few years ago who said they are a fulfillment shop now are being driven purely down a low-cost route. Those who stood up and said, "We want to stand for value," are in a very different place.
When you mentioned possibly bringing out an industry solution, would it be with your affiliates?
To clarify, we are still debating within the company whether to release it. At the moment, I would describe it as "time out." We recognize we've got this technology; we also recognize there is a place for industry standards. The industry is crying out for standards, and we need to evaluate the downside and upside of whether we release this. Certainly the smaller TMCs--in fact, anyone who hasn't invested in it by now--has left it too late. And that means they're going to have to get it from somewhere. We are arguing about it right now.
Is the counterargument that it offers a competitive advantage?
Absolutely. One argument is that the chassis itself is the competitive product, and the other is that the products on it are the competitive products. Both sides are really valid and maybe if you release the chassis and you allow people to put their own products on it ... I don't know at the moment. It is still an open discussion.
Are you comfortable with your ability to balance this development of an independent technology setup versus your relationships with technology providers?
Of course. It's a bit like the Internet. Everyone said it would come out and wipe out classic communication forever, and it hasn't. It turned into another communication vehicle. I still believe the GDS model in the right financial structure is the most efficient model for our industry. The question is whether we will ever get to the right financial structure on a global basis. If we are, it will happen very slowly. We can see the wars happening over here in Europe. You can see the different positions happening in the States. So there is an opportunity for someone to say, OK, here's a brand new system that can be put to one side. Will it ever be 100 percent in its own right? No, but there's certainly a place for it to sit alongside.