PHOENIX—Speaking on the theme of “red is dead, black is back,” Galileo International’s James E. Barlett told the 800 delegates attending the PhoCusWright Executive Conference that it’s time for the new economy to start turning a profit.
“Brace yourself for the shakeout. Consolidation is coming. It always does.”
Barlett, the chairman, president and CEO of Galileo, offered insights into the new Internet economy and the essential role GDSs can play in the travel equation as the dot.com shake-out continues. He told the Internet and travel-industry executives that a new collaborative and integrated business model is taking shape in the online travel marketplace and that his own company is poised to leverage its network and technology solutions to remain a key market maker.
The PhoCusWright Executive Conference on “The Internet Faces Reality,” held last week, offered a forum for key Internet and travel executives to debate and define the new reality of the Internet travel marketplace. “The Internet economy needs more than just grand visions. We need more profits and fewer prophets,” Barlett said. “The Internet economy has been a `craze` long enough. It`s time to turn this into commerce and no one knows this better or has more collective experience than GDS companies. For more than 30 years, we have been running a very successful e-commerce marketplace for travel.”
Barlett said he sees the GDSs, and his own company in particular, as helping to build a new collaborative and integrated model for the online travel marketplace from both the supplier- and agency-side of the equation. “GDSs can create an integrated marketplace that e-enables both travel suppliers and travel agency customers. Travel suppliers must have a way of managing the entire distribution landscape—yield, pricing, offerings and inventory availability—and travel agents need a back-end integrator to consolidate store front, call centers and Web site operations and transactions,`` Barlett said.
To take advantage of its market maker position, Barlett said Galileo has been aggressively updating its network, through its Quantitude subsidiary, becoming one of the largest advanced TCP/IP global networks in the world, reaching 107 countries. It is also leveraging its recently launched XML Select product. XML Select is a structured data application programming interface (API) that enables travel agencies, third-party suppliers, consolidators and travel-industry e-commerce and software developers to create their own high-volume Web booking engines and server-based applications using the Internet language of XML (eXtensible Markup Language).
Barlett said that to enhance its Web-based travel applications Galileo is working closely with Microsoft and its recently announced beta 1 versions of Microsoft Visual Studio.NET and the Microsoft .NET Framework. Galileo was showcased this week at COMDEX 2000 in Microsoft Chairman and Chief Software Architect Bill Gates` keynote address as developing cutting-edge Web-based applications for the travel industry.
Visual Studio.NET and the .NET Framework are two key technologies for enabling Web developers and programmers to build Internet-based applications and components. These applications will enable Galileo to take XML Select to a much larger audience, opening up Galileo`s computer reservation systems to an even wider customer base.
At the PhoCusWright conference, Barlett said that travel, the Internet`s leading category of sales, is frantically looking to find a profitable business model online. PhoCusWright estimates that 8% of all travel will be booked online by 2001, compared to 3% last year. “The online marketplace has yet to fulfill its full potential,” Barlett said. “Right now, the distribution environment actively discriminates in price and inventory among Internet players. This has created a maze-like environment that undercuts the clarity and convenience consumers cherish.”
Barlett said that to offer consumer convenience and to take advantage of the estimated $10.6 billion in online travel agency sales in 2001, travel agents will have to provide value-added services and “treat the trip, not the ticket,” Barlett said. “Travel will always be a deeply personal experience and while it`s true that customers will look to the Internet to save time and money, they will always value the role of the travel agent.”
We`re only in the first two minutes of the first quarter of the Internet game. The Internet race is for the distance. To see the finish line, it is important to take the long view and run with strategic partners,” Barlett said. “More than just `e-enabling` our customers, Galileo exists to help pull together the infrastructure of a new and integrated electronic travel marketplace—across all channels, tiers and competitive divides. As the market continues to grow, GDSs sit at the nexus, as the market makers, connecting buyers and sellers in an open and integrated environment.”