Breaking Travel News

Breaking Travel News Interview; Richard Adams, SVP EMEA, Sabre Travel Network

Breaking Travel News Speaks to Richard Adams, Senior Vice President EMEA, Sabre Travel Network
, to determine Sabre’s positioning in the online travel arena and what the future may hold for Sabre in a de-regulatory environment.BTN: What is Sabre Travel Network’s EMEA bookings share?

We have about 15 percent of the bookings share in the European markets where we have a presence.  We are a strong challenger to the dominant GDS in each of these markets and are making strong gains, particularly in Germany, Scandinavia and Southern Europe.

BTN. How has Sabre Travel Network’s role in the travel industry changed over the last two years?

RA. We have evolved successfully from being simply a distributor of fares and a bookings facilitator, into an organisation that helps travel agents market themselves and negotiates with travel providers for the best range of fares and travel content which we make available to a wider range of travellers than ever before.  We sell to leisure travellers through our global network of travel agency customers and to business travellers through travel management companies and our industry-leading online corporate self-booking tool, GetThere. 

BTN. What are Sabre Travel Network’s main strengths?

RA. The breadth of our parent organisation, Sabre Holdings, which gives us a leading presence in every single channel of travel distribution.

BTN. With the volume of GDS transactions diminishing at a fairly rapid rate, where will you go for new revenue streams?

RA. We are constantly opening up new revenue streams to supplement the traditional source of GDS fee income.  Examples to date include boosting the penetration of the GetThere corporate self-booking tool, for which we charge corporations, and the Merchant Content we have negotiated for Travelocity and Sabre Travel Network. 


BTN. When do you anticipate that de-regulation will come to Europe and what will a de-regulatory environment mean for Sabre Travel Network?

RA. Last year the EC’s Directorate-General for Energy and Transport (DG TREN) commissioned the Brattle Group to examine its proposal for modifying the European GDS Code of Conduct.
The Brattle Group’s recommendations, issued on 30 January 2004, favoured modifying the changes to the European GDS Code of Conduct proposed by the EU in November 2002. 

Deregulation on its own is unlikely to change substantially the number of airlines participating in each GDS or the level at which they do so since only three carriers globally are legislated into participating in all GDSs on a non-discriminatory basis, while virtually all major carriers globally choose to participate in several GDSs.

However, substantial deregulation will help put GDS relationships with airlines onto a more commercial, market-based footing.  We look forward to this as we believe we can compete strongly on the basis of our leadership in every channel of travel distribution.

BTN. Sabre Holdings said in its 2003 annual report that deregulation of global distribution system firms by the U.S. Department of Transportation will enable it to “vary incentives by the identity of the airline.” Could this trend spread in the UK?

RA. No decisions have yet been reached on how we might structure incentive payments in the deregulated environment.  Suffice to say that we are determined to ensure the greatest degree of flexibility for all of our customer groups, and that we do not intend to slash incentive payments to travel agencies.  That said - we do have to take control of the shape of the incentive curve - this is our largest single expense line and it cannot keep rising ad infinitum.

BTN. Do corporate travel buyers need to be wary of varying airline participation levels and display bias in global distribution systems, as well as airline access to booking data?

RA. Sure - display bias is something corporate travel buyers need to keep an eye on.  From Sabre Travel Network’s perspective, no decisions have been reached on how we might structure future screen displays in the deregulated environment.  Even if we were to go down the route of an adjusted display we recognise that many travel agents and corporate travel buyers value GDS neutrality and we will ensure that they retain the option to use a neutral display.

BTN. What is Sabre Travel Network doing to add value to agencies to enable them to add value to the traveller?

RA. We are ensuring that they have access through the GDS to the greatest possible range of published airline fares with the DCA Three Year Option!  We are improving the breadth and depth of bookable leisure travel content in the system.  We are ensuring our strength in every channel of travel sales and distribution.  We are making available to agents our Internet booking technology.  We are developing travel management tools that they can pass on to the end traveller -adding value to their function as travel consultants.

BTN. Hotel bookings have become an increasing important revenue growth area for most B2C sites with the merchant model continuing to grow at a rapid rate. In what ways are you tackling this situation?

RA. We have introduced our Sabre Exclusives merchant hotel content programme, through which we are making some terrific rates available to the end traveller, through Travelocity, and to the travel agent through the Sabre GDS.

BTN. On the B2B front, most corporate bookings tools are looking at integration with alternative distribution channels, as it is suggested that GDSs cannot provide all the content that is required. Can you comment on this situation?

RA. It is a testament to the stunning success of online corporate travel booking systems that users continue to demand an ever-wider range of content.

Wherever possible we are adding content, such as European ferries, through the Sabre system.  Where this is not possible we are working with third parties to ensure that we continue to expand GetThere content. 

In short we will do whatever it takes, as creatively as necessary, to ensure that business travellers continue to have access to the content they need in order to book travel online.

BTN. Most suppliers already have good websites and with the growing emergence of Web Services, this looks set to continue to grow. How do you see this situation evolving in the next few years and how will GDSs effectively compete?

RA. GDSs can only compete if they continue to ensure that they offer users the greatest possible range of content at the best rate.  Hence Sabre Holdings’ focus on securing leadership in every channel of travel sales and distribution, leveraging that leadership to negotiate great deals with travel suppliers, and making that content available through all its channels of distribution.

BTN. What are your predictions with regards to the GDSs’ role in the distribution chain in two years time?

RA. I’ll tell you what my predecessors were saying two years, five years and ten years ago when exactly the same questions were being asked - as long as we remain humble, flexible, responsive and quick to develop distribution solutions that the travel industry needs, we will be here serving the industry.  A little changed, to be sure, but just as useful.

BTN. Do you foresee a time when one GDS will dominate?

RA. No - this industry needs competition as much as the next.