Agencies Move To High Gear To Greet TheYear 2K

<B> Agencies Move To High Gear To Greet TheYear 2K</B>

By Sarah Welt

Industry insiders agree that the approaching Year 2000 is less an issue for travel agencies than it is for airlines and other vendors, but most members of the travel management community still are not taking the Y2K compliance issue lightly. Rather, travel agencies are working diligently to convert existing hardware, run tests and develop contingency plans in case any systems fail.

The biggest concern among agencies is whether all the systems of all the entities upon whom they rely are going to be ready in time. That is especially true regarding the computer reservation systems with which they are integrally linked, but it also extends to government agencies, banking and credit-card institutions, communications services and businesses based in other countries.

When it comes to getting their own houses in order, many agencies realize that because of advanced booking deadlines, they need to be ready long before Dec. 31, 1999.

"We're treating this as our top priority project," said Loren Brown, Carlson Wagonlit Travel's vice president of global development. CWT is working with a third-party consulting organization and spending "in the tens of millions" to make sure its systems are ready.

Travel buyers, meanwhile, are asking CWT for legal documents "saying yes, we will be Y2K compliant," said president Travis Tanner at last month's ACTE conference in New Orleans. While the initiative is companywide, Tanner said the European mindset is that "it will go away"--and the European market, therefore, is "six months to a year behind."

Carlson Wagonlit has dedicated resources managing its effort in North and Latin America, Europe, the Middle East, Africa and the Asia-Pacific region. Brown said that because of the global challenges ahead, a sense of urgency was established over a year ago. The biggest problem is "effective communication and coordination across different geographies with different cultures," Brown said. However, the fact that technology is not as advanced in other parts of the world is actually working to CWT's advantage. In some countries where the level of automation is still low, the agency "does not provide high levels of proprietary technology," Brown said. Therefore, Y2K compliance in many regions is more a vendor issue than an agency one.

CWT's dominant CRS is Galileo, but it also works wth Sabre and Amadeus. The agency is working with all three CRSs to test and certify interfaces. Additionally, it has asked the CRSs for a warranty that they will achieve Y2K compliance by Jan. 20, 1999.

CWT's internal deadline is Jan. 1, 1999, for all mainstream systems that are transaction oriented, said Brown. All remaining systems that aren't impacted have until September 1999.

WorldTravel Partners in Atlanta has a significantly reduced Y2K spend of about $700,000, but the agency already has accomplished a great deal to beat the Y2K deadline.

The company is busy working with its technology sister, Travel Technologies Group, to finish a Y2K testing system that it plans to market to other agencies beginning in the next three to six months. Internally referred to as Y2Kopectate, the system will be distributed by TTG. WTP and TTG are creating this product because they couldn't find an affordable solution to Y2K testing in the marketplace.

According to president of corporate travel and technology Danny Hood, a major Y2K issue is the network's BIOS, or its basic input/output system. The BIOS is built-in software that determines a computer's capabilities without accessing programs from a disk. Hood said that because of BIOS the company has to test every computer on every desk.

WTP also already is conducting an internal study of Y2K effects and researching the readiness of technologies most people take for granted, like voice mail, e-mail and phone systems.

Hood said WTP will have contingency plans in place to handle travel if any system fails. "What if a phone system onsite is not Y2K compliant--where are we going to forward calls?" Hood said. If a phone system is down, the company would work on "some type of call forwarding mechanism, maybe from the central office" that would send the calls into a Y2K-compliant telephone switch. "We are going to have to have our contingency plans ready pretty much over the next six months, at least for advanced reservations," Hood said.

Travel Incorporated also is not taking the issue lightly. It has spent $1.5 million on hardware and software since November 1997.

Travel Inc. used its move from Atlanta to new headquarters in Deluth, Ga., as an opportunity to install Y2K-compliant hardware. It plans to be completely ready on the reservations side by July 31, 1998, and compliant in all other areas by June 1999.

By July of this year its dominant CRS, Worldspan, plans to have installed new Pentium workstations and Windows '95 upgrades in all Travel Inc. facilities. Travel Inc. vice president of technology Linwood Hayes said Worldspan communicates with the agency on a quarterly basis.

The travel management company's Y2K strategy falls into three phases: hardware, CRS vendor and internal applications. Hayes said that hardware is now 90 percent compliant. On the internal applications side, the company has moved all data into a single server database, and is writing a new front end in Visual Basic for all internal departments.

"We're trashing all our old applications and starting on fresh new ones," said Hayes. "We will cut over in the fourth quarter of this year, but won't be completely finished until June 1998."

Travel Inc. uses the Aqua mid-office quality control system, and has just upgraded to its Y2K compliant version, Aqua 2000.

On the client side, Travel Inc. is sending surveys provided by the International Air Transportation Association or a notarized letter focusing on the Y2K issue to customers. By the fourth quarter of this year it plans to do a mass mailing on the subject.

"We are very comfortable with the CRS, internal applications and hardware. But we are not comfortable with the Federal Aviation Administration, control towers at airports and vendors," Hayes said. "If our vendors are not ready, we will have contingency vendors in place to fill our orders. This is a big concern right now."

Hayes said there has been little communication from the FAA other than a call to "be prepared in the month of January to consult clients on the form of travel they should take from each location throughout the country."

Like Carlson Wagonlit, Philadelphia-based Rosenbluth International has hired outside experts, the consulting firm Cap Gemini, to help solve its Year 2000 puzzle.

President Hal Rosenbluth at ACTE said the company plans to be finished with its initiatives by the end of this year. And chief operating officer Hans Amell said the agency is doing an inventory of all products to determine interdependencies.

"There might be thousands of items, so we need to do this extremely thoroughly, then prioritize, then test," Amell said. "My estimate is that most corporations cannot fathom how big an issue this is."

It is a big cost as well. Amell said the millenium change is costing Rosenbluth "in the millions."

At Rosenbluth, as with many agencies, the compliance effort spans the globe. Said Amell, "Every single general manager is giving input and has been doing so for a long time." While the company is not passing the cost back to clients, "every agency is accepting a lower profitability level" until all systems are updated.

"The world may very well fall apart," he quipped, "but we want to make sure it's not our fault."

Maritz Travel Co. of St. Louis, meanwhile, has been preparing for the Year 2000 for three years, and now is "in excellent shape," said president and chief executive officer Michael Boland. "We have made major investments in new client-server technology and new software to get ready for this. We have upgraded phone systems, upgraded our network and replaced some legacy systems, and we are bringing a new group system online this year."

Maritz has spent several million dollars so far to become Y2K compliant. In addition, a great deal of investment has gone into developing new technology products that have the benefit of being Y2K ready, like Northstar, Proview and the company's new group meeting system.

Like many, Boland is worried not so much about his own company's readiness, but about the rest of the industry. "We're about 95 percent done, but we are not an island," he said. "There are a lot of bridges out there to other places, and if some of those bridges are shaky, we'll feel the pain, and our customers will too."

In New York, meanwhile, American Express is spending hundreds of millions of dollars to ensure that its global travel and card business is ready. Ed Gilligan, president of corporate services, said at ACTE that the company will be finished with all testing this year and will issue "our first Y2K charge cards next month." Gilligan added, though, that whether terminals in Asia and Europe will be ready to accept the cards is still an unresolved issue.

Charles Petruccelli, president of Amex's international travel services group, said that his group and Gilligan's work closely on all strategic initiatives, and are applying the same Y2K strategy worldwide. Amex in 1997 laid out and began following a strict schedule, Petruccelli said, and it now has the situation "well under control."

Petruccelli said some customers are asking for formal compliance confirmation--a request he called "quite logical, because we are asking the same thing from our own suppliers." He, too, noted that, "I would be presumptuous if I said I was completely comfortable that everything was going to be perfect in the industry."

But at Travel One in New Jersey, the investment for Y2K compliance has not been overwhelming, said Charles Roumas, senior vice president of strategic planning, because the agency has taken the opportunity to combine compliance with technology updates. "At the most, it has cost us tens of thousands of dollars," he said.

Many of Travel One's back-office and mid-office products already were compliant, and it is converting to a new version of its back-office system, Global MAX, by the fourth quarter. Travel One also will convert to a Y2K-compliant version of TravelGuard, a product based on Aqua, by the end of the summer.

Roumas said that all Y2K projects are scheduled for completion by the the fourth quarter, and the only thing that makes him slightly nervous is the readiness of the CRSs.

"Their timing is beyond or behind the timing of individual agency products," Roumas said. "For the most part we interact with Apollo and Sabre, and both have told us they're in the process and their target date is the first quarter of 1999."

On the sales side, Travel One is starting to get RFPs that ask about Y2K readiness, and customers are inquiring as well. To address these questions, it is planning to release Y2K compliance information next week through its internal publication.

Compliance At Minimal Cost

McCord Travel Management also has kept its outside Year 2000 costs to a minimum, though vice president of finance Ralph DeLetto estimated that in the area of staffing it has spent between $100,000 and $200,000. The company took inventory of various applications within the organization, grouped them and "looked at which were mission critical," DeLetto said. "Obviously, CRS providers are mission critical." The company has received letters from its three CRSs, Worldspan, Sabre and Apollo, saying they will come up with a solution in time.

McCord also is in the process of trading in its MAX back office system for the latest version, and hopes to be compliant in all areas by January 1999. Said DeLetto, "Most of what we've had to do hasn't been internal programming--it has been upgrading existing software and getting current versions. We've also received a lot of technical support from software vendors."

Boeing Travel Management Co. in Irvine, Calif., is a subsidiary of Boeing Co. formed when it acquired McDonnell Douglas in December 1997. According to Dennis Hextell, vice president of business development and COO, the travel company is now in the process of verifying what equipment may cause difficulties. "We are still in the discovery stage," he acknowledged. Hextell said the goal is to "know exactly where we are, what is compliant and what is not, by the end of 1998." Aside from concerns with the phone systems, Hextell also said part of a back-office system is not Y2K compliant today, "but it will be." As for outside systems, "Our IT team validates what the vendor does."

As part of a shared services group for The Boeing Co., the travel agency can tap into larger resources and expertise as needed. Therefore, it has less of a cash outlay than many of its agency partners in the field.

Hextell said the agency has spent "less than tens of thousands" of dollars, and has not passed that cost back to its clients at this point. Indeed, it does not anticipate doing so unless there is some unforeseen complication. Additionally, Hextell said the Y2K compliance process has not delayed any other initiatives in the works.

On the other side of the Atlantic, European travel agencies need to be just as concerned about Y2K as those in the United States. David Radcliffe, chief executive officer of Hogg Robinson plc and chief executive of Business Travel International, said at ACTE earlier this month that "we recognize the importance of Y2K and we are putting a task force together."

Radcliffe said Hogg Robinson got to work on the problem about 18 months ago and has dedicated part of the workforce to looking into the myriad issues involved in the millennium change. "We are working in-house and are as ready as any company can be. We are virtually ready now," he said.

The biggest issue facing the industry right now, he agreed, is "making sure that we as the agent also are able to get our suppliers millennium compliant.