SolarNet on the Net

19th Apr 2002

  (Solars Computing Systems Inc.) is a provider of information technology solutions for the travel industry. The company was founded back in 1991 and has been a public company since September 1995. With offices based in Vancouver, Canada, SolarNet are looking to expand their global presence.

Andrew O`Leary
, President and Chief Technology Officer, is responsible for overseeing the evolution of SolarNet. In an excusive interview with ITN, Andrew reveals his future expectations for the company.


What makes SolarNet a leading Distribution Network for the travel industry?

What we have that is unique is a `pipeline` with the ability to host and manage environments on all the four major GDS`s - Galileo International, Sabre, Amadeus and Worldspan. We are able to take vendors - whatever presence they may have on the internet - and instantly distribute their travel product information to retail agents worldwide on their GDS work stations. SolarNet also manages and distributes the same information via the internet, ensuring total market coverage through all possible channels.

As far as we know, at this stage, there is no-one that specialises and does exactly what we do.



In a press release
, you commented that `consolidator net fares could represent an alternative form of revenue for travel agents.` How can SolarNet help here?

In light of the zero commissions, we have given the retail agents a broader base of product to be able fill their customers needs and earn a substantial commission based on selling those flights. Travel Agents can utilise their primary desktop booking tool - the GDS/CRS - to access SolarNet and instantly check and compare millions of net fares.

The classic case would be if a retailer were booking a flight from London to a destination in North America. They would have 2 options -firstly, to book what is available on their standard GDS and take zero commission. The alternative is to access SolarNet for the same flight. The prices are likely to be either identical, or cheaper, however the agent will earn commission. Alternatively they can mark that price up, but still compete with other online prices - it just gives them a different option.


The recent zero agent commission announcements
almost seem to be a continuation of a trend that is effectively isolating travel agents. How can travel agents ultimately survive in such an environment?

The internet has provided a means whereby the average consumer is able to research a product. Now when a customer walks into a travel agency, they are already well informed. The travel agent needs to be able to suggest alternatives, or at least be equally as informed as the customer. This will depend on the tools that they have; they need a broader range of suppliers, better products and a better income.

The opportunity for SolarNet is to take all the content outside what has been traditionally available to travel agents and provide them with access to that inventory and the ability to book it - not just a standard air-flight seat, but consolidator net fares and other leisure product

The internet certainly offers some challenges for retail, however, once travel starts becomes more complicated, for example, a multi- itinerary type product, retail agents are the only ones that can effectively handle that and fulfil the consumers needs.

Another challenge that I foresee for technology companies like ourselves and for suppliers, is to ensure the accuracy and timely receipt of information in a cost effective manner. Travel vendors need to keep travel agents well informed about their product inventory.

What are your predictions concerning the future of air consolidators and net fares?

I think we would all like a crystal ball to know exactly what is going to happen. In my opinion we will witness a consolidation of the industry. Consolidators` will just be another channel for inventory.

The airlines must look at their long-term costs and select the most effective means to market their fares. Their objective is to fill their planes up. Since consolidators` take on the brunt of that marketing, as well as filling planes up, the retail agent will ultimately get what they want. They can earn a decent living off doing what they do best and doing it professionally.

I do feel that commissions will come back. It is the independent and smaller operators that are at the greatest risk. The larger agencies and chains, I suspect, still have a significant leverage in terms of which carriers they purchase from and what they earn.

I predict that over the next 2 years, you will see agencies with consortia pulling together and becoming stronger. Even with the consolidators and suppliers, those who are strong and have good products will be the ones that are still around in a couple of years.

Earlier this month you launched
an information management and reservation system for tour operators, the TourTek Service Bureau. Who can most benefit from this service and how is it better than competing products on the market?

Medium to small size tour operators will benefit. The leisure industry has not been effectively serviced in the last 5- 10 years. The industry in the UK is a little different, but in North America and the rest of the world, there is a gap.

TourTek can provide a software and distribution solution to meet the tour operators` needs. Firstly, TourTek provides the ability to manage travel inventory in terms of a sophisticated service bureau system. Secondly, this is a system that is designed to grow as a business grows.

This service is unique in its the ability to integrate that product line with the distribution that we have. Tour operators have direct access to retail agents, enabling them to buy their products on their direct channels.

The retail agents benefit because these tour operators come on the system and utilise the distribution providing a broader range of product with which to fulfil their customers` needs.


According to a recent analysis of the corporate travel industry from phocuswright
, statistics were pointing to agencies moving towards utilisation of online travel services. What changes could we witness in the online travel arena?

Standardisation is the biggest challenge faced with online and internet access travel. The internet is progressing and becoming implemented as a technology platform.

The difficulty for retail agents utilising the internet is that every environment in sight is different and that is a very steep learning curve. Especially if you look at staff turnover and training in the industry.

GDSs will continue to be strong over the next five - ten years because they have created that technology forum. This is a tool that is geared up for the selling and management of travel. This is what the internet needs to do if they are going to compete with that forum.

Whilst there may be a broader range of product available in different environments, ultimately the stress for retail agencies is how to manage and administer that product in the long-run. You don`t want to give yourself more flexibility in terms of product line and ultimately more earning power, only to then spend whilst trying to administer the business in terms of commissions and earnings based on that environment.

So whilst I do think that the internet is going to play a larger part, over the next 2 years I foresee far more integration and standardisation in that environment. The online environment is actually created and addressed towards the needs of retail agents being able to book and use it as oppose to vendors just getting onto the internet for the sake of being online. Retail agents are still extremely desirable from the vendors perspective because they are still the cheaper salesman that any travel supplier has.

Over the last 2 years, if you look at the number of companies that have played the internet travel technology forum - many of them have disappeared. The technology available is evolving at such a rapid pace it is difficult to be adopted by the industry in general.

What do you feel still needs to be learnt in order for the industry to fully adapt to the internet?

This is a process and there needs to be an understanding that simply putting a product on the internet is not enough. Knowing what and who your customers are is essential. Some vendors have found out the hard way. Yes, they can get on the internet very cheaply, but this means that they sell their market directly to consumers, and the reality is that all of a sudden their customer changed. This is an added cost that a lot of vendors and suppliers have not seen in terms of fulfillment.
The change that has occurred within business, coupled with the technology that is now available has not quite settled yet and I think it may be a couple of years before it does.

Solarnet has recently integrated Netfaresonline
, bringing much of the Canadian Marketplace to SolarNet. Which region will you target next?

We have already expanded our distribution within the UK and the Pan Pacific region

Through Matel and HitchHiker, we intend to push our presence into the European marketplace.
Can you discuss any forthcoming launches for SolarNet?

We have 2 main focuses now. TourTek is probably the biggest push in terms of our distribution and also the service we are offering. Secondly, the expansion of our distribution partners and alliances. We have a relationship with Matel and the relationship that we have just built with Netfaresonline.

Our objective over the next 3-6 months is to expand our global presence in terms of being able to diversify the major product that we want to offer on the network.

Do you see a bright future for SolarNet?

Yes I do. There is still a settling period in terms of internet technology utilisation and what retail agencies are doing; not only locally in the European and North American environment, but worldwide. It could take between 3-5 years before new, established standards emerge.

With the challenges faced by retailers today, our objective is to ensure they only have to go to one place to find all the distribution products. Whether it`s GDS today or GDS on the internet. The challenge is the ability to be flexible enough to market your product to the broadest base possible.




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