Worldspan chairman, president and CEO Rakesh Gangwal yesterday told
Business Travel News that his company would not offer fulfillment services to new corporate clients in an effort to distinguish itself from moves made by Cendant and Sabre into the travel management company arena. Although not competing with agencies has been a Worldspan mantra for years--reiterated by the company last summer
(BTN, Aug. 25, 2003)--it turned out that Worldspan actually was providing agency services to PNC Financial
(BTN, Oct. 27, 2003) and a small number of additional clients.
"Unraveling what we agreed to do in the past would not be fair to those guys," said Gangwal, who took over at the helm of Worldspan after its sale last summer
(BTN, July 7, 2003). "We went down a certain strategy with a small number of companies, and we did these deals and they have a certain expectation from us. My view is that we signed a contract and we have to honor it, but it does not mean we have to pursue that process going forward. How does one go to a traditional or e-commerce agency to do business, but say, 'By the way, we want to diversify and be an agency also?' There are enormous conflicts there, and it's a very awkward thing. I would have to spin around it and say, 'We won't take too much of your business.' Not only do I think that's fundamentally wrong, but maybe it's not even smart for the business. So we want to very clearly communicate that we will not compete with the agency community."
Gangwal said part of the reason agency subscribers should not be comfortable with their global distribution system partners competing with them is that those GDS firms "have all the data. At the end of the day, the executive committee has to run the business, and it's very difficult to compartmentalize your brain and say this should not compete with that, and let me not use this data in my decision-making. It doesn't happen." Nevertheless, he said, "The other GDSs that are becoming an agency will sort out this conflict, create fences in their companies as best they can and, deep down, I believe they will be very successful. They have significant cash flows and are better-funded than the travel agencies."
Travelport, the corporate-facing unit of Cendant Corp. that offers the Highwire self-booking tool, the Galileo GDS as well as fulfillment, has not experienced "a lot of pushback on selling directly," said Travelport COO Kurt Ekert, speaking at The Masters Program in Washington, D.C., where Gangwal was a keynote speaker. "We don't see the growth of Travelport and the agency channel as mutually exclusive--so far so good."
"To be honest with you, I think it's making a lot of people nervous," responded Masters Program moderator and TRX president and CEO Trip Davis, whose company has navigated through conflicts of its own
(BTN, Sept. 8, 2003).
As part of the integration of GetThere
(BTN, Sept. 16, 2003), Sabre Holdings has drawn a line between the Sabre Travel Network, which serves agencies, and full-service corporate options as part of Travelocity Business. Amadeus has said it has no plans to get into fulfillment.