Agents are seeing value in effective tech, says Travelport boss

Agents are seeing value in effective tech, says Travelport boss

The boss of the UK’s largest GDS operator vows to hasten the pace of development of its booking systems and to continue to diversify its products. Lee Hayhurst reports

Agents are increasingly happy to pay for more-advanced desktop sales technology, according to the boss of the company that runs the Worldspan and Galileo global distribution systems.

Gordon Wilson, president and chief executive of Travelport, the UK’s largest GDS, vowed to increase the pace of development, adding: “Agents are quite happy to pay for technology if it makes a difference to their business.”

Paying for products

In 2012 Travelport angered some agents, particularly in the US, when it introduced a licence fee for a bundle of its products known as Agility.

This included the next-generation graphical Smartpoint agency sales system, adoption of which has grown from 35% at the beginning of 2013 to 75%.

Wilson said this figure was probably higher in the UK, where Travelport’s leading position and focus on agents meant many new developments were tailored to their needs.

“This is not a static product. We are enhancing it all the time, there are more and more iterations – and they are being actively pushed out to agents – so the value is becoming more obvious,” he said.

“There were people who were sceptical, but now there are real converts. And it’s going to get better as we put more rich content and branding in and have fully integrated payments.”

Challenged with the common complaint that large technology suppliers such as Travelport are not able to keep up with the fast-changing needs agents have, Wilson said: “Our objective is to forever be quickening the pace of what we do. We are never going to be the panacea for everyone. They are always going to have to do some of that themselves.”

Revenue diversification

Travelport gave a 2013 trading update last week, and revealed that an increasing proportion of revenue was not from its core air distribution division.

Other revenue streams include its eNett payments joint venture; hospitality, which saw increased GDS hotel bookings and a rise in activity on web-based aggregator Rooms and More; and advertising on its websites.

This year, Travelport forecasts the proportion of its non-air revenue will increase from 18% 
to 20%.

Wilson said income from trade technology licensing was “not in the same order”, although he described it as a “not unimportant” contributor to the firm’s commercial performance.

He declined to reveal whether Travelport planned for this income stream to increase, but said: “If we provide great technology to enable travel agents to be more efficient, there is value in that and, generally speaking, people are prepared to pay for value.”

Leisure travel wins

Travelport has announced some big wins in the UK leisure travel sector in the last 12 months, with Hays Travel prominent among them and Travel Counsellors renewing its contract.

Trading figures for 2013 showed an increase in customer loyalty, or agency incentive, payments, from $47 million in 2012 to $78 million.

Wilson said he anticipated payback from some of these upfront payments, in the form of increased business transacted, to be realised from 2014 onwards.

But he said winning market share was not the priority. “Market share in the UK was stable but our big focus is on the quality of business we get,” he added.

“Global transaction volume was up 2% but Revpas (revenue per available segment) was up 4%.

“Volumes are not that important but the quality of the earnings we make is super-important and we track that assiduously.

“The market share that people always talk about is air bookings made through the GDSs. We are not just focused on air bookings, yet we are growing that part of the business.”

Optimistic outlook

Wilson was upbeat about prospects and said transaction growth in the fourth quarter 
of 2013 was the largest quarterly upturn for three-and-a-half years.

He said Travelport was seeing good growth in tough markets such as Spain, Italy, Portugal and Greece, with the latter up 50% despite its economic woes.

And Wilson said the UK’s forecast GDP growth of 2.6% this year “bodes well, and we are a big player in the UK market”.

“There are signs of encouraging growth, even if it was from a pretty low base. That makes me relatively optimistic,” he said.

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