New Vision: The Web As CRS

<B> New Vision: The Web As CRS</B>

By Mary Ann McNulty and Cheryl Rosen

<I>Orlando</I> - An Internet technology called object-oriented programming is helping vendors like E-Travel develop ways to book directly with airlines, hotels and car rental companies, bypassing the global distribution systems, yet still consolidating all the data.

Before the end of 1998, E-Travel expects to begin offering its 200 corporate users the ability to use its ETLink product to book Hertz, Continental Airlines and thousands of hotels participating in the Pegasus THISCO UltraDirect system.

Technology gurus predict direct connections might get an even bigger push if this emerging Internet technology is embraced more widely by travel suppliers. Essentially, object-oriented programming allows applications written this way to work together--to combine reservations booked on multiple Websites into one passenger name record, for example.

In a presentation at the NBTA conference, Jeff Hoffman, vice president of distribution planning and development for Worldspan, told participants, "It's estimated that 10 percent of Websites are travel-related. What's coming are intelligent agents that will scan many Websites. Worldspan, for example, is working on object-oriented programming that will allow you to book wherever you want and bring all the pieces of the reservation--the air, hotel and car from three different sites--back to one PNR."

Putting a slightly different spin on Hoffman's comments, Sue Powers, Worldspan's sales and marketing vice president, said Hoffman was essentially detailing how Worldspan's Odyssey reengineering--expected to continue for another two years--will give the GDS a platform to "embrace the Internet rather than fight it." In making Worldspan Internet compliant, executives hope to give customers richer data sets from the merger of both reservation and Website data, such as weather, directions, and bed and breakfast booking capabilities.

"Our goal is not to replace things in the CRS, but supplement them," Powers said.

While the technology might pave the way for more direct bookings, Norm Rose of TravelTech Consulting in Belmont, Calif., said the bigger question is, "Where's the beef? Where is the savings for corporations, suppliers, everyone?"

It's the same question The Sabre Group and its accounting firm consultants have been asking for two years as they developed Business Travel Solutions and the business model for it, said Pete Stevens, director of marketing and business planning. "It makes a lot of sense, it sounds interesting, but does it scale?" Stevens asked of direct bookings. "Right now, we're proving that the big gains are in corporate travel management. We believe that the current model is efficient today."

More importantly, the current model of booking through a CRS and travel management company ensures that the traveler who needs to change a reservation at 2 a.m. can do so, Stevens noted. "If the booking is made directly with the airline, who's going to handle that call?"

The existing travel management companies will, countered E-Travel. The new E-Travel ETLink will use the existing infrastructure of agencies and even the Airlines Reporting Corporation to settle financial transactions. It also will send data feeds to the back-office accounting systems of travel agencies for reporting; both processes are similar to bookings made in the GDS today. The links with the three vendors announced are the first of what E-Travel expects to be many direct link participants.

"We're at a point now where the world is saying there are better ways to purchase and distribute products," said E-Travel president and CEO John Ackermann. "Companies are looking at travel and asking why they can't do this in a more efficient way. We are building the facility to do that, to eliminate cost and to allow the supplier to differentiate his product. The technology and the market have matured to the point where companies are saying, 'I buy Hertz and Continental, and I want to buy in the most efficient way--why not link directly and eliminate the GDS and the costs associated with it?' We're saying, 'Okay, let's take the distribution system apart, take costs out and share the savings.' "

A handful of companies already have signed up to beta test the links, Ackermann said. Without question, sources said, it is customer demand that prompted the development.

John Johnson, vice president of sales for The Hertz Corp., said, "Corporations have been looking to do this for some time and we've been working with a number of vendors, while E-Travel has been working with a number of our large accounts. Customers have been pushing for this type of link."

They have indeed, according to results of a recent survey of more than 30 corporations--with combined air volume of $27.9 million--conducted by the Travel Management Group of Alexandria, Va. Half of the respondents said they "would like to create direct booking connections" with air, hotel and car rental suppliers, said TMG president Tom Wilkinson. The survey revealed that travel managers' greatest concern about direct connections was the loss of consolidated management information.

But as more corporations build or buy their own data warehousing systems exclusive of their travel agency relationships, that concern will dissipate, Wilkinson said.

On the NBTA trade show floor, Betts Demott, travel manager for Clorox Corp. in Oakland, Calif., said that direct link technology alone wouldn't be enough to persuade her to sign up for E-Travel, though she liked the concept. "I'd press my car vendor to do something similar," she said. "I think it's great for the industry."

But for many, the real question came down to whether vendors will share some of the savings resulting from direct bookings. Said another travel manager, "If there isn't a financial benefit to me in productivity of my travelers or in price, who cares?"

Continental's staff vice president of distribution planning Steve Cossette declared emphatically that as e-ticketing, the E-Travel deal, its partnership with via World Network and other developments play out, "we will share the savings with you."

Hertz' Johnson was more non-committal, but left open the possibility. "That's something that will have to evolve over time. If corporate customers could move all their rentals tomorrow that would be one thing, but no one is sure yet how much volume will be involved. In six months, we'll have a better idea of how the whole thing balances out. The res element is one piece, but it still depends on how much volume comes through.