<B> Direct Links To Debut</B>
<I>E-Travel Pushes The CRS Bypass Envelope</I>
By Mary Ann McNulty
<I>Concord, Mass.</I> - E-Travel Inc.'s ETLink this month will become the first online booking system to connect corporate travel buyers and suppliers without a CRS intermediary. The system links with Continental Airlines, Pegasus Systems Inc. and The Hertz Corp.
Two other vendors are expected to add the functionality this year, while others like Sabre Business Travel Solutions and American Express's AXI continue to study corporate demand and search for an economic model that makes business sense.
Besides the three original ETLink vendors, E-Travel is working with two large international airlines, domestic airlines, rail and limo companies and another car rental supplier, said vice president of product marketing and business development Rick Lifsitz.
The company also plans to add Radisson Hotels Worldwide and Accor, sister hotel brands to Carlson Wagonlit Travel, one of E-Travel's agency distribution partners.
At press time, programmers still were fine-tuning the Hertz link before finishing up the Continental and Pegasus connections and conducting tests to get all parties comfortable with the technology. But the backlog of interested customers remains "pretty significant as other suppliers view this as a competitive advantage," Lifsitz said.
On the corporate buyers' side, Lifsitz said he has talked to more than 20 large corporations about the product, including Coca-Cola, Time and Fidelity Investments. At press time, the beta tests were just starting.
Fidelity is interested both as a travel buyer and supplier to lower booking costs for its BostonCoach unit, said travel services director David Hamilton. As with most new travel management technologies, the pioneers are raring to go, while others are taking a wait-and-see attitude.
Seagram director of global travel management Earl Foster is working with car rental suppliers on developing direct booking links, and in some cases with hotels. "I'd love to work with all suppliers on a direct basis, because I can get inventory faster and cut costs out of the equation. It's a win-win for everybody," he said.
VeriFone's Dorian Stonie said he has been too focused on implementation of the online ITN booking system (see story, page 1) to devote much time to direct booking. Preferred vendor deals and direct booking don't mean much if travelers aren't using an automated system, he said.
"This seems to be a critical issue on travel managers' minds right now," Lifsitz said. "They're incurring high transaction costs, and when they're doing a couple hundred thousand transactions a year, they're looking for ways to reduce all costs, even though they might not be paying them directly."
In most instances, vendors are paying the GDS fees, which range from $10 to $15 for airline reservations and $5 to $10 for car and hotel, Lifsitz said. The fees vary, depending on the GDS, type of connection and volume deal that each vendor has negotiated with the GDS.
Internet Travel Network co-founder and vice president of new business development Dan Whaley said vendor costs--and therefore direct booking savings--also depend on how the systems are hosted. For Continental, which is hosted in Shares, direct bookings save money, but for American and United Airlines, which host in Sabre and Apollo, respectively, the savings might not be as high. ITN has been studying adding a direct booking functionality and has slated development time for the project, he said.
For Hertz, direct bookings "are definitely less expensive" than other channels, said director of electronic distribution Peter Budd. But cost savings aren't the only reason they are piquing corporate interest. "Corporate accounts are very interested in controlling their reservations and vendors," he noted.
E-Travel decided to roll out the new version of the product with ETLink included, instead of charging separately for it, as executives believe the direct booking feature will provide a competitive edge, Lifsitz said. The new version, 3.5, was released March 1.
Vendors, meanwhile, will pay a nominal fee for E-Travel to complete the programming necessary for such a link, Lifsitz said.
Lifsitz acknowledged that E-Travel underestimated the complexity of connecting its online booking system directly to vendors. The programming took six people a year, instead of the eight months the company expected. "It was a massive undertaking and took almost as much time as it took to build the core product," he said. When E-Travel announced plans for ETLink last summer (<I>BTN,</I> Aug. 3 and 17), executives said the feature would be functional by the end of 1998.
"It was extremely challenging to build an intelligent switch that is fully multidimensional, showing everything on the green screen, plus interactive messaging and seating within a plane," he noted.
E-Travel also had to be able to identify travelers by classes or corporate policies, to allow vendors to display the correct inventory. Usually, a corporation will use five or six different classes for all travelers or divisions, but the software can accommodate an infinite number, he added.
Now that programming for the first three is completed, though, adding other vendors will be a much quicker process, Lifsitz said.
Of course, direct booking only will be attractive to corporate customers if E-Travel can solve the reconciliation and reporting issues. While it plans for now to use the Airlines Reporting Corp. for settlement, it is looking into the feasibility of direct settlement as well. It also has developed several new reports. Beyond that, vendors plan to provide more detailed and accurate reports to direct customers.
"One of the great things about a direct link is that it's easily identified," said Budd. "Let's say a corporation is using a booking product through a CRS to send reservations to Hertz. In that scenario, it's very difficult to see how the reservation was made. If it comes through this link, we know it's E-Travel."
Hertz has designed some new corporate reports specifically for direct connections and plans to continue providing its regular reporting package as well, essentially offering double the reporting.