Last In A Three-Part Series On Web Fares: GDSs Use Rate Bots

Unwilling to wait for a day that may never come—when airlines put Web-only inventory into the global distribution systems—Sabre and other GDSs are seeking to use Internet fare-searching software to expand the fares and schedules they provide to clients.

The GDSs aim to stay on top of a trend that already has numerous travel agencies buying such so-called screen-scraping tools, also known as bots, to help their corporate customers quell traveler complaints by bringing Web-only fares into the managed travel process.

A spokesperson for Southlake, Texas-based Sabre last week confirmed the company is preparing for a beta test with FareChase, a site that compares fares from more than 80 other sites. A FareChase executive also said the company is in talks with another GDS, as well as some of the mega travel management companies.

An American Express executive confirmed that one of its corporate clients is using FareChase.

Meanwhile, Galileo International in Parsippany, N.J., is "very aware that Web-only fares pose a challenge to travel managers, and we're looking at solutions to support them," said vice president of product innovation Todd Dubner. "It's all in the very preliminary stages, but we're aware of the issue. We recognize the perceived need for that in the market and are evaluating ways to deliver like solutions."

That this need has been articulated by a growing chorus of complaints stems from the increasing applicability of Web-only fares to business travel.

"It used to be that we would have one or two complaints a month," said Mary Savoie-Stephens, global travel and meetings manager with 3Com in Santa Clara, Calif., referring to instances in which travelers "beat the agent" using Web shopping. "Now it's three or four a day. It used to be only, for example, on the 6:30 a.m. flight. Today, it's a different issue. We're talking about $300 Boston to Dallas flights with no Saturday-night stays."

Tampa-based consulting firm T2Impact said its research that compared Web fares with GDS fares for the first time in September found the Web to be cheaper.

"With a large sample size, we saw previously that GDS-based logic returned lower fares when in the hands of a seasoned agent," said managing partner Timothy O'Neill-Dunne. "Now, however, we see that Web fares returned a lower basket back, thanks, in large part, to Orbitz." Increasingly, Orbitz, Expedia, Travelocity and other online travel agencies are being discussed as a possible option for business travel (see story, page 19).

While the American Society of Travel Agents and the National Business Travel Association are lobbying to regulate the airlines into putting Web fares into the GDSs, the GDSs are taking a more market-oriented approach to what amounts to a bypass of their own systems.

On the one hand, partnering with FareChase or others of its ilk—such as AgentWare, Excambria, FareWeasel, SideStep and others—could provide agents access to Web-only fares. But GDSs also acknowledge the possibility that airlines may put such fares into private databases within the GDS for top-performing clients, though no sources know of such an arrangement.

"Worldspan will provide Web fares in a phased approach," said a spokesperson for the last remaining fully airline-owned GDS, based in Atlanta. "Initially, we will be working with our airline suppliers for them to provide us these fares via ATPCO. It will enable airlines to provide Web fares automatically to corporations as they file other fares."

Meanwhile, buyers and GDSs are considering what incentives could prompt airlines to be more flexible in putting Web-only fares in the GDSs, the former by perhaps covering the difference in cost associated with the GDS versus the Web, and the latter by exploring lower segment fees for such fares.

"This puts a lot more price pressure on the GDSs, and maybe they need to look at lower fees," said Steve Reynolds, executive vice president for Atlanta-based TRX Inc., which is exploring its own Web fare solutions. "If I was an airline, I'd negotiate a deal to make my best customers happy. I'd place my bet with the really strong partners and handle these one-offs in the big markets."

"There are talks along the lines of, 'We will lower our booking fees if you put the Internet fares in our system,'" said John Hach, Galileo vice president of corporate and consumer sales and marketing. "We're seeing sophisticated travel managers negotiating with carriers to put those fares on proper displays. We can display those fares, but we haven't seen the dam break. I think it will be determined on a case-by-case basis."

Indeed, generally the airlines are reluctant to show any flexibility on the matter. Asked whether Northwest would take advantage of Worldspan's plan to "phase in" Web fares, Northwest Airlines vice president of distribution planning Al Lenza said, "They are working to provide the capability, but them having the capability and us being willing to use it are two different things. Nwa.com is open to everybody, but our objective there is not just to sell Web fares but also to create loyalty and to reinforce products like our Web checkin. Last time I checked, we didn't have a 'Corporations Do Not Come In' sign on our site."

Lenza said the airline had yet to make a decision on whether to offer Web-only fares in its corporate portal, called CorpNet, which is not yet available to clients. Delta Air Lines already offers a similar portal in which it includes some Web-only inventory.

Meanwhile, another potential strategy for the GDSs may be to offer Web-only fares through their corporate self-booking tools, if not also in the GDS mainframes themselves.

"Our longer term approach will allow a broad base of Web fares to be integrated in our availability fare search and pricing engine for Trip Manager display," said the Worldspan spokesperson. "We will ensure that these Web fares are integrated with the corporation's travel policies, and secure rates to effectively give our customers the best fare pricing."

According to Jeff Palmer, president of Menlo Park, Calif-based GetThere, a unit of Sabre, "It's a keen issue for us. The whole thing with Web fares has three prongs: first, whether the GDSs come up with mechanisms to show those fares; second, the deployment of direct connections; and third, the deployment of our faring engine over the next year to mix, match and sort fares once you've found them. I don't think there is a one-size-fits-all solution."

Amadeus' E-travel, which has a new corporate structure (see story, page 10), in a company statement wrote that it, "believes Web fares do offer some cost-savings opportunity, but not to the extent that we feel we should, at this time, undertake a project to build, on our own, technology that integrates Web fares into our display. However, we are interested in following progress of the 'screen-scraping' vendors because we would prefer to partner to integrate Web fares into our technology to mitigate our risk in this area should Web fares not prove to be a viable opportunity going forward."