Sam Gilliland
The Transnationalin July spoke with Sabre Holdings Corp. chairman and CEO Sam Gilliland about international expansion and the evolution of global distribution systems. An excerpt of the discussion with Gilliland, which took place during the National Business Travel Association convention, follows.
Is international growth at Sabre any more of a key initiative this year than in the past, given the state of the U.S. economy?
Not that it was deemphasized before that, but global growth has been a key initiative for the last five years with venture partners, agency partners and we're making good progress in the corporate environment with GetThere in Europe. Our global growth will come on a platform built around the world with local delivery capabilities. We have about 500 employees based on Bangalore, India. In part, their mission is to serve the Indian market. I imagine 65 percent of passengers boarded in India will be using Sabre technology. The other growth market of course is China. That market is still, for all intents and purposes, closed, at least as it relates to the GDS and airline reservations markets. We work with a lot of airlines there with our Airline Solutions business--running or providing technology to run their systems operation centers. There's also an opportunity online, although we haven't made any specific decisions to move in that market. If you go beyond what you think about traditionally, and get into the hotel market, [Sabre hotel central reservations system provider] SynXis is growing like crazy, and a lot with international customers. We started small there, acquired it a couple years back and were focused on the smaller end of the market. We have moved up market much more quickly than I would have ever imagined, and we're hopeful we'll see some big brands take advantage of that technology, too.
Travelport recently signed an interlining and content-sharing agreement with Chinese GDS TravelSky. Sabre's joint-venture partner in Asia-Pacific is Abacus. Is there an opportunity to work more closely with Abacus?
Our Asian presence through Abacus represents an opportunity for TravelSky. TravelSky wants to extend, and we can be helpful there. There's clearly room for multiple players, but a lot of that comes back to how the government wants the market to play out.
The European Commission has advocated the establishment of better rail booking capabilities in existing GDSs, or perhaps a new rail GDS, partly to support environmental goals. What's your take?
Building a new rail GDS is quite an undertaking; better automating the rail process through the GDS is a big opportunity. We're making big headway on automating rail in the GDS and GetThere. The rail companies are at a place where they can seize their moment to provide seamless service across rail lines, and we're beginning to see that. There's a lot of opportunity right now, where the airline experience--mostly outside the airlines' control--is pretty challenging.
The companies that we call "GDSs" are actually kind of different in terms of market strengths, orientation and where they're trying to grow. For example, as they evolved from ownership by airlines, some have online agencies and others do not. How do you think they are similar and different now?
There seems to be, at least with the two other GDS competitors, a declining interest in owning in the online space with Travelport spinning Orbitz and you hear that at least around Amadeus' interest in its online assets (though I have not seen any specific evidence of that). So there's less emphasis in that way, but, in large part, there are more similarities in how we look at the world today than differences. In Europe, there have been some skirmishes around the relationships between GDSs and airlines. It's a common view that corporations really would like to be able to decide how to purchase their travel and not have someone else decide for them--and not have to go to many different outlets to purchase their travel. In recent years, it's become more important that they do their purchasing in a consolidated fashion, as opposed to what would be hundreds of outlets. The other GDSs have a similar philosophy in that they need content in the system, and there isn't a more efficient way of doing that. We've seen a lot of attempts to replicate GDSs, but it's difficult to do and takes a lot of investment over many years. The other GDSs do seem to differ on how to get content, with whether it's Air Canadaor easyJet, and the competitors are getting it however they need to, even if it hurts productivity. But Sabre is saying, "No it should be in the GDS."
What else is going on at Sabre in terms of serving multinational clients?
For global corporations, there's a pretty short list of markets where they say, "We want you to be here, and you're not here yet." We keep pushing that out. Our investment spend is up this year compared with last year in terms of products and technology. We continue to invest heavily in pricing and shopping technology.