Travelport and G2Switchworks

On Friday April 4, 2008 Travelport announced that they were acquiring from G2 Switchworks "certain software assets and intellectual property to be used in the development of a future Travelport agent desktop solution." Given all the hype of GDS verses GNE over the last four years, what does this deal mean to alternative distribution?

There are a number of ways to look at this announcement.

• The need for a multi-source desktop- G2Swithworks recognized from the start that to be successful as an alternative distribution platform they would need to provide travel agent call centers with a new multi-source desktop that could mirror the multi-source nature of self-booking applications and sites. Over the last four years G2 has worked hard to develop this platform. Despite this effort, though travel management firms (TMCs) particularly the second and third tier TMCs, have tested the G2 platform, few have actually signed up to run their entire agency using the desktop application. One reality is that despite the drop in financial assistance from the GDS to the TMCs, this type of monetary compensation for larger TMCs still exists. With economics playing a role in keeping the GDS as the platform for the TMC, G2 found that having a better more intuitive application was not enough to develop the necessary beachhead customers to be successful.
  
• A recognition that current solutions do not provide the right platform for TMCs going forward - On the Travelport side, with the acquisition of Worldspan last year, Travelport not only had agents on their Focalpoint/Viewpoint desktop but also inherited the Worldspan's GO! point of sale solution (POS). The announcement to acquire the G2 POS is confirming that neither of these long standing agent desktop applications can truly support the multi-source and workflow needs of today's modern TMC agents. A simple but often overlooked aspect of the G2 platform is the housing a more robust traveler profile outside the GDS. This is a critical requirements for any truly multi-source platform. An GDS-independent profile should allow the airlines to target specific customers with dynamic offers representing their value as a customer, a clear part of the unbundling effort.
  
• Eliminating a potential competitor: By acquiring G2, Travelport may simply be eliminating a potential competitive platform that would put pressure on the GDS/Airline negotiations when they are set to expire in 2010/2011. In addition, the Travelport action may be designed to prevent Sabre from acquiring the G2 platform. A bit of history of the GDS might put this into a different perspective. Back in the early 1980s at that time Apollo (the domestic GDS that is now part of the Galileo brand) licensed a travel agent back office system from an independent firm called ADS. The goal was to expand Apollo's offerings to travel agencies by becoming the chief provider of back office accounting software. After this announcement, Sabre, Apollo's chief competitor, bought the ADS company and incorporated it into their agency solution essentially trumping the licensing deal. This scenario was repeated in the late 1990s after Galileo licensed the GetThere corporate booking solution, Sabre turned around and acquired the company. With both G2 and Sabre now both owned by the Texas Pacific Group perhaps Travelport perhaps was simply heading off another potential competitive effort that would have again allowed Sabre the upper hand in a new platform initiative.

The G2 approach further reinforces the concept of a shift of aggregation to the TMC from the GDS. Today even with content agreements with the major airlines, no GDS has total content as some low cost carrier (LCCs) and Web only content still exists.

So what does this mean for the big picture of alternative distribution? I have repeatedly stated my belief that the GDS are not going away. The role of competition often is to accelerate development outside the constraints large companies. With perhaps the exception of Apple, few companies innovate due to the dysfunctional nature of large corporations. Time and time again, particularly here in the Silicon Valley, small start-up create innovative applications disrupting the market. When the disruptor is acquired, the larger organization can benefit from the start-ups innovation. I see the G2 acquisition by Travelport as an important evolutionary step in travel distribution, providing the market a much needed robust multi-source platform for TMC agents.

Agent POS platform

Yesterday, I had the opportunity to talk with Steven Bloom from SkyGate a Danish travel technology company. SkyGate has developed an agency POS platform called NewPort. The conversation and demonstration provided further evidence that the need for an enhanced point of sale platform for travel agents is a universal requirement throughout the global. For European travel agents, there has always been a requirement to deliver so called "backroom functionality" to the desktop due to the multi-source nature of European travel inventory and the need to drive invoices from the agent desktop. NewPort uses both cryptic formats and Web-based CRM techniques to deliver a platform that is easier to implement while significantly enhancing the call center reservation process. SkyGate has created a limited set of cryptic commands that are seamlessly integrated into an Amadeus booking window. This includes an innovative command which checks to see if two one-way fares are cheaper than a roundtrip fare. The NewPort off GDS profile system synchronizes with both the GDS profile as well as Self-booking tools such as iFAO's Cytric. The POS system was designed with the corporate travel agent in mind with the goal of both simplifying the transaction and enhancing the CRM aspect of the call by allowing the agent to reference prior trip activity as part of the reservation conversation. This may sound somewhat basic, but due to nature of traditional GDS only POS systems rarely will a corporate agent use past history as a way to enhance the reservation process (e.g. "Mr. Jones I see that for your last trip to London you stayed at the Park Plaza Victoria, shall I confirm you at the same hotel for this trip?). It my belief that all travel agents both leisure and corporate need a more open, robust point of sale tool that not only incorporates GDS information but seamlessly blends Web content and CRM capabilities into the reservation flow. SkyGate's NewPort product addresses this need in a practical and innovative way.