Casto Travel is planning to switch its global distribution
system to Sabre from Travelport. Scheduled for completion on May 1, the
conversion represents a fairly uncommon move by a midsize or large corporate
travel management company and, according to Casto president and COO Marc Casto,
will require thorough training and a meticulously planned implementation.
Casto said the TMC's pre-existing mix has been 95 percent
Travelport and 5 percent Sabre. After the conversion, "it's going to be
100 percent Sabre." Casto Travel's 2009 ARC air sales were about $46
million and non-ARC sales about $5 million, according to the 2010 Business Travel News Business Travel
Survey.
San Jose, Calif.-based Casto's Sabre selection follows a
25-year relationship with Travelport (and its predecessors) and an
"extensive" request for proposals involving all three GDS operators.
"We invited each of the GDSs to come in and do a full deep-dive
evaluation, so that when they did their RFP it was not just pitching products
from the marketing team but things that will actually be applicable to how we
operate," Casto explained. "I was truly impressed by the responses
from all three.
"It is clear that all three are starting to focus a
little differently on how they position themselves," Casto continued.
"As a result, it became pretty clear that based on where we are going,
Sabre was going to be the best fit."
That decision, Casto said, relates to the evolving role of
GDSs and Sabre's ongoing development. "We are looking at how we integrate
elements that are outside of the normal sphere—i.e., your ancillary fees—and
from there I do see the GDS as being the central platform to integrate things
that are not normally related to the travel sell but are important to the
travelers themselves," he said. "That can be anything from selling
Wi-Fi access in hotels to providing taxi services. I am not saying they are
there, but the platform that they've built is really designed to be a fully
extensible suite that is able to integrate with lots of third-party providers.
When some techie develops an app that does one thing very specifically but very
pointedly for the purposes of travelers, who are they going to code it to? They
are going to code it to Sabre."
Casto would not share any details of the financial structure
of the new five-year Sabre deal, saying only that the agreement "is one
you'd expect in this industry." He added that the TMC "did not see any decrease in the
offers provided by anybody. Everybody is at least as aggressive as in years
past."
Asked if the Sabre-American Airlines dispute led to any
hesitation, Casto replied, "If anything, it gave me further encouragement.
I firmly believe that the conversations that have taken place are economic in
nature and not about business process. Issues about economics get resolved.
Issues about business processes are more challenging.
"I am extremely bullish on the future," Casto
continued. "At the end of the day, particularly with airlines, they are
going to come to the conclusion that it's better to be participants in the game
than sit on the sidelines."
Focus On Training
According to industry consultant Steve Reynolds,
"conversion is a chore due to profile migration, script and function key
setup, agent productivity, back- and mid-office integration change, etc. [It]
takes a good six months to convert and stabilize."
Any TMC in Casto's position approaches a GDS conversion
"a little differently," Casto said. "We have our own project
road map. It is planned out to the day from here on out." That plan
includes implementation of the Sabre Red point of sale agent workspace for 50
Casto agents, a "data merge" and transition to the Sabre Trams
back-office system.
Casto indicated that employee training will be the linchpin.
"We are flying in every person in the company during April to have
extensive hands-on training," he said. "Literally every single person
in the company—be they accountants, account managers or salespeople—is going
through the same training. They will all be brought up to speed to agent-level
proficiency on Sabre."
The TMC also intends to use Sabre's XML profile database
once it's available, Casto added. The agency "currently has all profiles
in an XML database, but it's in an unproprietary system and we would prefer to
house that in the architecture of the GDS, so long as it's written in that
language," he explained. "From my standpoint, the profile sits at the
center of everything. The development [Sabre] is doing there is
industry-leading—to house the profile in a manner that would be independent of
anything else, yet able to integrate with everything else, be it a CRM system,
be it a GDS, be they outside providers, mid-office, back-office, expense
reporting, the whole deal."
Rare But Not Unprecedented
Casto's conversion represents a relative rarity among corporate
TMCs for two reasons, according to Innovative Travel Acquisitions president Bob
Sweeney. For one, given corporate agency consolidation during the past 15
years, "there are fewer midsized corporate agencies left in the United
States," he wrote in an email to The
Beat. "It is also a matter of only three GDSs versus four,"
following consolidation among those players as well.
But such conversions do occur from time to time. Industry
attorney Mark Pestronk told The Beat
that he is aware of "two other very large agencies that converted from Travelport
to Sabre in the last year—both were well over 500,000 annual segments,"
but he would not identify them without client permission.
A Travelport spokesman would not comment specifically on
which TMC accounts recently have been won or lost, but said the GDS operator in
2009 in the United States "saw three such notable accounts move the other
way—to us." Outside the United States, Travelport during 2010 picked up
two substantial agency accounts: CWT India (to Galileo) and Thomas Cook Group,
which moved all U.K. entities to Galileo from another GDS operator (widely
reported to be Amadeus, which subsequently announced Thomas Cook had selected
it for GDS services in five other countries, bringing the total to 14 countries).
"For larger TMCs, the strategy is to keep the GDSs in
balance to obtain the maximum incentive," Reynolds suggested. "In
other words, if you can get them to pay you to not move share away, it's better
than having to commit to volumes. The problem with volume commitments is it
becomes a zero-sum game once you've moved 100 percent."
Source: The Beat