Sabre To Redefine Agency Terms

Sabre Travel Network today is unveiling an optional fee-based program that gives its U.S.-based global distribution subscribers access to full airfare content and immunity from airline service charges. The GDS said it would spend the next 60 days discussing its agency relationship overhaul with customers and plans to launch the new model on Aug. 1.

Although Sabre would not disclose the new agency payment terms, Sabre Travel Network senior vice president of North America Chris Kroeger told BTN that travel management companies in effect will pay Sabre to leverage full content, but still receive incentives from the GDS. "Sabre-connected agencies that elect not to participate will not have assurance of access to full content," Kroeger said.

Amid buyer concerns of content fragmentation and airlines' professed need for deeper discounts, Sabre is attempting to strike a balance among those in the distribution chain through its Efficient Access Solution, Kroeger said. "It does not put an end to incentives," Kroeger said. "We've been very open as we've talked about this balanced approach that there is a role for incentives." Sabre CEO Sam Gilliland has said incentives are coming down and Kroeger concurred.

Kroeger did not venture to speculate about specific airlines' service fees, but said, "We have no idea what the airlines may do as it relates to service charges, but you only have to take a step back to realize that historically there have been airlines that have put service charges into the marketplace. Not only here in the U.S., but other parts of the world. Recently, there have been several airlines that have been vocal to the industry, highlighting that they are considering putting service charges into the marketplace on top of certain types of bookings."

Kroeger said the new model has been in works for some time and weighed into discussion with major U.S. airlines as they enter into new full-content arrangements with GDSs. Sabre so far has signed five of the six legacy carriers—Continental, Delta, Northwest, United and US Airways—as well as AirTran Airways, and said the terms of the new agency model apply to all of the carriers' content.

"As part of those agreements with those airlines, we have agreed to provide discounts on their booking fees and in return those airlines have agreed to provide certain benefits and protections to travel agencies that participate in our Efficient Access Solution program," Kroeger told BTN.

Sabre already has begun reaching out to some agency customers, but Kroeger said it will spend much of the next 60 days getting TMCs on board and preparing them for a shift in GDS relationships. "In the past, when there have been economic model changes, sometimes those have happened overnight," Kroeger said. "We wanted to make sure that all the constituents in what the new model looks like have some time to prepare."

Meanwhile, in conjunction with each of its major U.S. airline deals, competitor Worldspan noted that it "has developed two new optional products to introduce into the marketplace." The GDS also plans to launch its optional products on Aug. 1. The GDS has been mum on the details.

John Smith, president of Chicago-based travel management firm Tower Travel Management, who had yet to see the terms of the deal, said, "Obviously, we need to have the content available to our customers, but to the extent that access detracts from our revenue stream we have incentive to further reduce our costs, increase fees to customers or locate distribution sources that don't have those limitations. It may be an incentive to find or buy a better mousetrap."

Meanwhile, Kroeger said Sabre also would offer agencies a series of new capabilities. Most significantly to corporate travel buyers, Sabre is beginning development of traveler-tracking tools for agency and corporate customers. Although Kroeger could not give a timeframe for release, Sabre will build new tracking systems that can serve either as a turnkey—for agencies without such a system—or a complement, for those that have developed their own. "Providing traveler-tracking capabilities, if done properly, levels the playing field and may marginalize those of us who have made proprietary investments into such products," Smith said.