WTTC Global Summit interview: Tom Klein, president of Sabre Holdings
As the WTTC Global Summit 2012 in Japan draws to a close, Breaking Travel News catches up with Tom Klein, chief executive of Sabre Holdings, to discuss future travel technology trends, the importance of data transparency for consumers and Sabre’s latest initiatives.
Breaking Travel News: What has been on the agenda for Sabre at the WTTC Summit?
Tom Klein: I really enjoy attending WTTC each year. It brings the industry’s top leaders together to discuss opportunities to enrich health of the global industry. The past few years have been a mixed bag for travel, with phenomenal growth in some segments and traditional pressures on others. Through it all governments increasingly see the human and economic value that travel delivers.
It’s fitting then, that Japan hosted this year’s event; a country that is in economic transition forced overnight to deal with a devastating tsunami. Instead of halting the nation, the Japanese united in defiant resilience and demonstrated to the world a modern day blueprint for survival.
Their new slogan: Japan, Rising Again” is spot on. It’s a motto I hope will also inspire the global travel industry to continue striving for improvement, enrichment, collaboration and growth.
BTN: What are some of the topics you highlighed in the session ‘Understanding Tomorrow’s Consumers’?
TK: I spoke about some of the emerging technology trends driving consumer behaviour and trends consumers are driving themselves when making travel decisions. Broadly speaking there are three key areas:
• Consumerisation of business travel –a decade ago, consumers were at the mercy of companies who drove technology innovation. Now personal consumer technology is driving some companies to keep up in the workplace. Companies will lag behind but those that keep pace will be successful
• “Think mobile first”: the shift from online to mobile will accelerate, and new technologies like near-field-communication and it’s integration with social media will give travellers the flexibility to do even more on their mobile in a self-service manner
• Travel shoppers will continue to search for deals and discounts at record levels: In 2012 consumers will again be willing to invest more time in the research process to save money – they will look for the best deals they can find, to get the most for their money
BTN: What are the most significant developments for Sabre so far this year?
TK: We’re making significant investments in ourSoftware-as-a-Service (SaaS) business for airlines and hotels. It’s a bigyear with Etihad, LAN and Virgin Australia migrating to our reservations software, and we also renewed hosting agreements for a number of our carriers including Southwest Airlines, Gulf Air, Aeroflot, Aerolineas Argentinas andAlaska Air to name a few. There’s a strong demand for self-serve software, mobile and next-generation crew solutions, and we’re working with the U.S. and European governments on upgrading to a Next Gen Air Traffic Controlsystem.
For agencies, it’s all about apps and mobile. Travelocity launched a free iPad app in February to book flights and hotels, with special” mobile exclusive” offers. It’s been a hit and was recently ranked as the #4 travel app by CNN. We also recently launched Sabre Red App Centre, the world’s first B2B apps store for the travelindustry. Like consumer app stores, agencies use the Red App Centre to get new apps that help them improve their business and their job. We believe this new marketplace will spur a new level of innovation by bringing together agencies around the world with developers.
We’re making great strides with online agency customers. We have long-standing relationships with many of the world’s top OTAs including Expedia and Despagar in Latin America, and we’re winning a number of online agencies in Europe where there is desire to work with an alternative technologyprovider with leading online shopping capabilities
For corporations, we’re building Sabre Virtual Meetings, the world’s first platform connecting employees and agencies to high-endvideo conferencing equipment and conference rooms. The trend for video conferencing continues to increase, as both a replacement for conference calls and tosupplement in-person meetings.
BTN: Can you comment on the ongoing dispute between U.S. carriers and Global Distribution Systems on data transparency? Where does Sabre stand on this? Does this debate seem any closer to a resolution?
TK: Consumers and travel agents have been vocal about the need to see the total trip cost. They also want consumer protections to ensure transparent access to full fare content. New traveller protections introduced by the U.S. Department of Transportation (DOT) last summer represents a significant first step in addressing some of these concerns. Greater transparency on airline charges promotes competition and empowers travellers to make more informed decisions when buying travel.
Transparency stimulates buying decision which is great for everybody, and we continue to do our part for airlines and travel sellers in making that happen. The GDS provides suppliers’ access to the highest yield customers – business travellers and others who want broader service options – in the most cost effective way.
We provide significant value to the more than 400 airlines that are part of the Sabre GDS. We also support airline ancillary strategies at no additional cost in the GDS so airlines can up-sell and generate more value for their customers. More and more carriers join the Sabre GDS every year, and I believe airlines will continue to leverage the GDS as the important sales channel it is.
BTN: What are your main goals / priorities at Sabre over the next six months?
TK: Technology companies need to stay on top of trends, so investments are made in the right software for the future. We’re experimenting with a lot of new technology right now, and testing these in the marketplace. We need to anticipate future needs and meet these before there’s demand. I’d like to think Sabre has a history of doing that well over the years.
There’s a lot of focus on mobile right now. Travelocity expects 30 to 40 percent of all its bookings to come from mobile transactions in the next three to five years. We’ve hired a number of developers and executives with strong e-commerce experience to boost our expertise in these areas.
On the Sabre side, we’re moving our suite of mobile services into TripCase to offer agencies a complete web, mobile, and email product to travellers. TripCase is different because travellers and agencies use the same platform to shop, book, manage travel services, and offer value-add services like upgrades and destination services before, during and after the trip when it’s most appropriate.
Our SaaS business is also a priority. We’ve won a lot of new business from around the world, and now it’s important we seamlessly migrate these new airline and hotel customers to our systems. Moving to a new reservations system is the single biggest technology project an airline or hotel will face so it’s critical everything runs smoothly– we’re obsessive about getting it right.
BTN: Can you share any predictions for the travel technology landscape over the next decade?
TK: Social media is fundamentally changing how companies do business today. It has graciously and in some cases unceremoniously humanized brands, unleashed new ways to understand and engage with customers, and is driving step change in how products are researched, developed and delivered to the market.
Consumers’ tolerance for sharing personal information is opening up a ton of potential to unlock the value of that underlying data. Consequently, there’s an emerging ability to market on a far more targeted and segmented basis, almost down to the individual level.
The amount of data in the world is doubling every two years, and as this ‘big data’ explodes, so does the competitive value of effectively mining it. This will be a big focus for technology companies as we adapt and take advantage of being in a real-time, transparent and data rich marketplace.
BTN: What are the main challenges the industry is facing and how can these be overcome?
TK: There’s growing awareness of our industry’s 9% contribution to global GDP but there’s a lot more that can be done to facilitate the health and growth of travel and tourism. We’re still a target for unnecessary taxes and fees; the most visible being the ill-advised European’s Emission Trading Scheme. Volatile fuel costs continue to be a concern – a small increase significantly impacts an airline’s bottom line and this invariably flows to the rest of the travel chain. Add to this, an ageing and highly inefficient air traffic control infrastructure and you quickly see why airlines struggle to make a decent living.
TK: For travellers, preserving the freedom to travel safely, securely and efficiently is a top priority. Adopting visa and airport security policies that encourage travel and tourism will go a long way to maintaining a healthy industry. Finally, the transition to a mobile, always-connected world where data is king will likely raise privacy, security and intellectual property concerns in future that will need to be addressed.
Some of these challenges are rightly being tackled by policymakers and associations, and my hope is that they land on the right side of up for our industry. Others require us to stand united to drive awareness and meaningful change for our industry. This is where you’ll find Sabre.