Travelport CEO Jeff Clarke spoke with Business Travel News senior editor Jay Boehmer last month about the
global distribution system's role in airline unbundling efforts, the deployment
of Travelport's next-generation Universal Desktop agent workstation and the
trend of strong, but slowing, growth in corporate travel.
Business Travel News:
Continental CEO Jeff Smisek says he can sell ancillaries through
Continental.com, but the GDSs are behind. Where do efforts stand to bring
parity between airline sites and the GDS channel?
Jeff Clarke: Our
major customers—Carlson Wagonlit, BCD, many others—have all said, What’s
important here is transparency and the ability to purchase at all points of
sale. There’s no question that people will be able to go buy things on airline
sites, but what’s important is that they also have the ability to purchase the
attribute at whatever decision point they want.
If you’re a corporation, you should be able to buy it all at
once and work the appropriate private rate in. I wouldn’t be surprised if a
corporation could negotiate two bags and free Internet on the flight, and they
shouldn’t have to pull out a credit card to prove that. They should be able to
buy that at the front end, at the point of sale, including through
distribution.
It is not a technical issue. The fact is, today we aggregate
four billion attributes—they happen to be flights and cars and so forth—and do
75 million searches. We have the ability to add 10 billion attributes, or as
many attributes as people will file in the fares. If you file it on ATPCo,
we’ll get it on the GDS and make it available. This is a question of, right
now, the suppliers—specifically the airlines—being willing to listen to the
customer, understand what the customer adamantly wants at all points of sale
and have transparency. The only way to do that is through the GDS.
BTN: If it’s not
a technology issue, what kind of issue is it?
Clarke: It’s a
business decision by the airlines to listen to the customers.
BTN: We’ve been
living with the phrase “full content” for a few years now. Does that include
ancillaries?
Clarke: As new
products and services are provided, it should go into the distribution. This is
not a contractual issue. I’m sure there will be some contractual disputes about
what was in the last negotiation with each airline. The majority of our U.S.
network deals are either not up for negotiations for many years or have just
been renegotiated. Most of our international deals have been negotiated. This
is really a question of, when a product comes out, do you want that product to
be available and transparent at all points of sale? This is a business decision
and it is an economic decision. Like any decision, the people who sell that
have to make some money, or they’re not going to bother selling it.
BTN: How does the
Universal Desktop play into making sense of all these different attributes at
the point of sale for preserving comparison-shopping integrity?
Clarke: The
Universal Desktop was needed before attribute unbundling, but now it is the
reason to be. It is the primary reason for agents to have the Universal
Desktop—to have this kind of content. Now, there are wonderful things—the
configurability, the better graphical user interface, the ability to
merchandize more effectively, to advertise more—but the ability to get this
additional content is what the Universal Desktop will be best at.
BTN: At what
point will you consider the Universal Desktop fully deployed?
Clarke: It
depends on the timeframe of our customers. Let’s take Flight Centre—a very
large, global agency with corporate and leisure, but primarily leisure. They’ve
chosen to test it in large regions and eventually shift it globally. That
rollout will probably take between six and nine months. It’s really a question
of when a corporation wants to adopt it, and then what features and customization
they want. We think we have a lot of pent-up demand for this, but it will take
many years before every travel agent in the world is converted onto Universal
Desktop, yet that’s the mission.
BTN: Do the next
generation of desktops change the next generation of agents? Some think that if
we dumb down the interface, we dumb down the agent.
Clarke: The
domain knowledge, which today is driven by a vast understanding of a particular
set of codes, will shift. While it will be more intuitive than a classic
green-screen cryptic entry, it can be more robust, and travel agents will have
a training cycle and a domain knowledge that will be very special. Travel
agents do so much more than just a booking. The agent can spend more time with
the customer and configure processes to clients, rather than one-size-fits-all.
BTN: What are
your growth opportunities?
Clarke: The
unified area of growth is corporate travel. We’re seeing solid double-digit
corporate travel growth around the world. The robust profitability that the
airlines had this past quarter—in some cases, some of their best in a decade—is
because of the resurgence and recovery of corporate travel. That’s very
important and particularly relevant to GDSs, because that’s where we add our
most value—in those more complex, inter-regional, corporate managed travel
transactions. We are seeing particularly good growth in India, where we have
roughly 40 percent marketshare and double-digit growth. We continue to see good
growth in most of the rest of Asia/Pacific. We’re seeing strong growth in
China, and we’re doing very well in the portion of the non-domestic business
that we can transact on. Europe and the U.S. is slower. We saw a slower June
and July than April through May, and we’re hopeful that we’ll see recovery in
the second half of the year.
BTN: What’s your
read on forward bookings?
Clarke: We’ve
seen a slowdown, and we’ve not seen a signal yet of recovery on that. Now,
let’s put that in perspective: We’re still seeing market growth of low single
digits. This is not a decline.
This report originally
appeared in the Sept. 6, 2010, issue of Business Travel News.