TRX Emerges As Tech Entity

<B>TRX Emerges As Tech Entity</B>

<I>Six months after changing its name from WorldTravel Technologies and setting its sights on the public markets, (BTN, March 6), TRX is proving that it has evolved from its beginnings as WorldTravel Partners' technology arm to take wing as an industry entity in its own right. Approaching his first anniversary as president and CEO of TRX, Trip Davis recently talked with BTN technology editor Jay Campbell about the company's positioning in the world of what he called "procurement management for the travel category."</I>


<B>BTN:</B> In March, you said you planned to integrate your fulfillment, mid-office and data management lines with a focus on customer relationship management. Please give us an update.

<B>Trip Davis:</B> To the extent that corporate travel managers are seeing an increased set of requirements in managing their vendors and partners, we have not gotten closer to full scale integration for the types of services that they are looking for. In the broader sense, I think a travel manager would define that as procurement management for the travel category as opposed to corporate travel management, and I think that's the trend. In other words, how does travel fit in to a broader procurement strategy that is more linked into payroll, expense and operational systems in the company? We're seeing two types of integration: On one hand, we're seeing a more holistic view of procurement and investments and development inside the corporation to make all this work together with the internal systems, and part of that is travel.

Externally, you have different sets of vendors and types of data that need to be integrated. The principle that is really important is that in the old world, we talked about integration and aggregation. In the new world, because of the Internet protocol, we have a communication network and what we're looking for is access to data. The ability to do that across vendors, platforms and databases is real today. We are working extensively on XML and other types of platforms that enable us to have that access and communication without going through massive system integration jobs on a one-by-one basis. On the corporate travel front, we're focused on broadening the customer base with the major corporations that have the ability to drive material adoption of Internet usage. When you look at those types of corporations, you might take the Fortune 1000 and whittle that down to 400.

<B>BTN:</B> WTP's Danny Hood told us TRX would be doing corporate online fulfillment for Sabre BTS and Sprint (BTN, July 31), but Sabre later said it was for their internal travel, not BTS. Can you clear that up?

<B>Davis:</B> We are involved at an ownership and operational level with WTP in corporate fulfillment services and are very committed to a robust offering in corporate travel fulfillment. But we are very cautious about commenting about clients because we are a total behind-the-scenes player. The second the traveler knows that we exist, that's when we're in trouble. We need seamlessness and transparency. The companies that Danny mentioned are his WTP clients, so he's doing his best to move with them into the future, so we're Danny's "wing man" and do a lot of that stuff for them, not all of it, as a partner and a vendor. He could tell you it's Sabre and it's Sprint, and yeah those are two that we're working on, but those are his relationships and we're here as a support company.

<B>BTN:</B> Then, is there some step to be taken to further separate TRX from WTP?

<B>Davis:</B> This is no different than saying, look there's Maritz and they have clients and we are their wing man, or Expedia's wing man. Nobody knows that we exist. You call 1-800-Expedia or you send an e-mail to Expedia.com, you buy a ticket and get confirmation by e-mail or mail, you never know that came from TRX. Take a corporate client of Maritz, say all their transactions go through the CoRRe service bureau, you as a traveler who gets the Maritz ticket jacket and all that never know what happened. So that's just a fundamental statement across the board. We call it the behind-the-scenes strategy, and it just so happens that we got our start being behind the scenes for WTP.

<B>BTN:</B> What are you doing to diversify your initial client base for fulfillment beyond Continental, Expedia, Orbitz and US Airways?

<B>Davis:</B> We've found a major advantage in concentrating on a handful of big clients, both in terms of our tech service bureau as well as fulfillment operations, and that gave us the opportunity to scale and learn--volume-tested and complexity-tested--as opposed to being diluted across hundreds of clients. In consumer fulfillment, there is a discreet set of prospective Web sites and suppliers, both domestic and internationally, so we do have an airline on board for business travel fulfillment that we have not announced.

<B>BTN:</B> Delta is the only one of the largest domestic majors that has announced a business travel site (BTN, May 17, 1999). What about internationally?

<B>Davis:</B> We hired Leo van Dorp from Galileo as senior vice president of international development. We formed a joint venture in the U.K. with Hogg Robinson, and we're in the process with several other partners in Central and Western Europe to offer CoRRe and ResAssist. We'll be making some fourth quarter announcements that apply to both the consumer and corporate fronts. The first major development has been the fulfillment and customer support for britishairways.com.

<B>BTN:</B> Are many of the ResAssist clients now switching over to the low-cost fulfillment option?

<B>Davis:</B> Corporations are interested in understanding how they can pay for different services at different rates as opposed to one bundled rate, and that's the initial impact of the promise of corporate travel fulfillment that may or may not be agency based. But ResAssist clients have not yet shifted from the traditional to the newer models; you're still seeing the traditional model driving nearly all decisions, with interest from a strategic and growing set of corporations.

<B>BTN:</B> Along the lines of channel-specific pricing, to what extent can you facilitate direct connections?

<B>Davis:</B> You're continuing to see a trend there. We have built, first and foremost, ResAssist to work seamlessly on all four major GDSs, and then we have put in place the development of XDS--or XML-based Distribution System--which is the next level in direct access to supplier data and inventory.

<B>BTN:</B> What is TRX working on in terms of support for travelers while they're in the booking process?

<B>Davis:</B> A huge strategic key to fulfillment is to be GDS- and booking engine-agnostic. Today, we work with eight different booking engines. When they ask us what type of services we offer, we tell them real-time Web-based support. We have not found enough demand for chatting or voice-over IP or "browser driving," but we're mirroring the traveler's browser and synchronizing when they're on the phone. That's mostly in the consumer and leisure world right now, but corporate is next. Eighty percent of our customer service requests are what we call "pedestrian requests," simple questions, but 20 percent of it is post-transaction support, whether booked, exchanged, voided or refunded. For that you do need specialized travel training. There aren't a lot of calls coming in where the traveler says, "I'm booking now and I need your help." In terms of file finishing, when we inserted into the PNR a tracking number so the traveler or arranger gets an e-mail and can track his status by clicking on a Web site, we saw 20 to 25 percent of our calls drop off.

<B>BTN:</B> How about new ticketing options, such as printing tickets from a personal computer?

<B>Davis:</B> We're looking into the new wave of ticketing options. There's clearly a difference between ticketing and fulfillment. Ticketing is the electronic moment when a ticket is issued. Fulfillment is the delivery and consummation of the transaction. For us, they're on different floors.

<B>BTN:</B> At what stage is your IPO?

<B>Davis:</B> We're still in registration with the SEC. We are working closely with our advisors and we are in a total wait-and-see mode in terms of the market position. So, we're not in a position to discuss it more than that.