<B>Whale Spouts Rate Robot</B>
By Jay Campbell
Attempting to tackle what it considers "discrimination" by travel suppliers against small and midsize businesses, one-year-old Whale Media early next year will begin testing its Dynamic Travel Exchange that allows vendors--particularly hotels--to price inventory with a clear view of the profile and real-time needs of a prospective business travel customer.
Whale, which this summer demonstrated its beta site at the National Business Travel Association conference for Bass Hotels, agency consortium Radius (formerly Woodside Travel Trust) and Northwest Airlines, is consulting with the corporate travel department at Hewlett-Packard and is in talks with the GDSs for inventory feeds. H-P also owns a piece of the company.
Whale is developing patent-pending "smart agent" technology that enables buyers to request a rate and suppliers to answer based on up-to-date supply and demand dynamics. The software would be hosted by Whale in an application service provider model.
"It allows a company to build a profile in their own 'smart agent robot' and this bot goes out and knocks on the doors of smart agents of various suppliers, say airlines," said Whale CEO Max Starkov, who has more than 20 years of experience in travel including stints with all of the major supplier segments. "The bot then says, 'I'm X Corp. from this zip code, with this T&E and air budget. I don't have contracts with any of you. Mr. Jones wants to travel X dates, what can you do for me?'
"Depending on how they set up the rules for their smart agent bots, some airlines will say, 'He's plain business travel, so he gets my unrestricted rate.' Others might say, 'That's a new client,' and offer a rate that is independent of what's in the GDSs," said Starkov.
The smart agents also can learn. According to Starkov, Whale has set up "the first bot university, which teaches them how to be smarter and how to self-learn, taking into account the realities of the market and to project behavior in the future."
Randy Malin, a veteran of the airline and travel technology industries, is on Whale's board of directors. "If you think of this in terms of hotel space, where a group just canceled and you've got 20 rooms to fill in three days, the negotiated rates published in a book 14 months ago don't help much."
Starkov has commitments from Hewlett-Packard and "several major carriers" to participate in the pilot of Dynamic Travel Exchange by the end of the first quarter next year. Hilton also has taken a look, and Whale has strategic partnerships with "all major hotel chains." Starkov said the company is even talking to a GDS about incorporating DTE into its corporate booking system. Pricing would be "on par with market levels at the lower end," he said.
Kevin Iwamoto, global air and car travel supplier manager at H-P, sees Whale as an opportunity to address suppliers with which H-P does a small amount of business relative to its bigger partners, such as the $2 million it spends on Southwest Airlines annually.
"If we can do Southwest on this Web site, the agents can then concentrate on high-ticket items," said Iwamoto, who recently saw a demo. "It looks like an effective day-to-day tool. With hotels, there's often a lower rate available than the corporate rate, and sometimes a large room block suddenly drops out. The question is, how do we want it to interface, because I still want the data. Whale claims they can interface with the GDSs or GetThere or whoever."
Starkov said the likely interface is the corporate intranet connecting to Whale's host. He noted that there is no room for a travel agent in his vision.
Asked about Whale's chances for success, Malin said, "With any startup, you have to make sure you have the money to keep it going, you have to develop the technology and be sure it works and even if it works, you have to have it adopted. Those are our challenges."
Parent company of five-year-old Web site developer Ten Online and leisure-oriented travel bidding site Travelbreak.com, Whale Media sports an impressive roster of employees, partners and directors, including Bankers Trust's last CEO and a former senior scientific officer at the Defense Research Agency of the United Kingdom. Whale employs 26 people directly and 18 in full-time consulting roles.
Whale's chairman of the board is Gerald Crotty, founder and CEO of Excelsior Ventures Management LLC, an Internet investment and managed equity concern. He is a former president and CEO of ITT Information Services.
Whale just completed Series A financing, which included H-P, a "major Internet fund and a major software company," said Starkov. The company is in its Series B financing now, which will close in November. "We're cash sufficient and very picky," he added.
Starkov said Whale had been trying to keep "below the radar screen" until it garners sufficient big vendors and corporate clients for its pilot. As for the name Whale Media, director of business development Jason Price said it doesn't pin down the company as a dot.com or a tech company, and "we didn't want something specific to travel, because we want to pursue other verticals."
Ten Online, which started out in 1994 developing Web sites for Loews Hotels, recently has moved into the business of aggregating inventory from the global distribution systems and other databases. It redistributes that inventory through a partnership with Radius and will be involved in Hewlett-Packard's offering with Yahoo for corporate Internet portals that combine Yahoo's consumer information with such internal corporate information as employee directories, benefits, supply chain status and accounts payable.
Ten Online also has more than 100 hotel customers for its "platform-agnostic" Internet distribution services, which launched in May. Version 2.0 of the product will launch Nov. 15 with fully automated enrollment. "By the end of November, we'll have 58,000 bookable hotels," said Starkov.
He said Whale plans to offer car and hotel inventory for corporate travel intranet sites, as well as airline inventory through a five-year partnership with H-P's Open Skies reservation and revenue management division, which counts AirTran, JetBlue and Ireland's Ryanair as customers, among others.
Broadly, Whale Media's mission is "to organize and optimize supply and demand in the travel domain," said Starkov. "The travel industry is highly fragmented and inefficiently served by the existing distribution systems. Within corporate travel, we feel midsize and smaller companies are being underserved by existing solutions and plainly left behind the big corporations. There are 6.5 million corporations in the U.S., and a very small percentage have dedicated travel offices. A small percentage can negotiate special rates, but the others are treated like plain consumers without fully utilizing their negotiating power."
To broaden its distribution and sales opportunities, Whale plans to ally with such "non-competing services" as expense reporting, direct payment, B2B media groups, large travel agencies to serve as call centers and even trade publications. .