More on CWT France to move from Amadeus from Sabre

Quick update on recent post on CWT France moving their GDS contract from Amadeus to Sabre. An industry insider from Europe sent me a few info pieces to add to the rumours around this migration. Story is that the migration has been in the works since as early as late 2006 - under the secret project name "Project Score". There have been commercials issues for the delay from then until know but (as is often the case) there are some technology issues. Looks like there was/is some work to be done between Sabre and SNCF that has been problematic. This all conjecture and innuedo but adds to a great story.

Any Amadeus or Sabre officials out there wish to comment?

One year later - a BOOT rumour comes true. Carlson Wagonlit in France (starts) to move from Amadeus to Sabre

The world of GDS is never that fast moving so it is probably no surprise that a GDS rumour that I spread in July 2007 has taken until Oct 2008 to come true. Back then I predicted that Amadeus would lose Carlson Wagonlit in France to Sabre. Well that "Scoop" is now confirmed as true (here is French news story from earlier this month). Of course in saying that the article says that the deal is "still not official" but that "testing is about to start" (my translation) .

This aritcle is about 4 weeks old. Anyone out there have access to something more recent?

David Saunders gets Acting MD gig for Galileo Pacific

Congratulations to David Saunders who was appointed as the Acting MD for Galileo in the Pacific region while current boss Shelley Beasley is on maternity leave.

Saw the story in Traveltoday

A little bit of Amadeus + A little bit of Sabre = Moneydirect

Press releases have been flying all over the place confirming the name and nature of the Amadeus and Sabre Euro announced last month. The version on AsiaTravelTips tells us that the new venture - called Moneydirect - do payment processing and collections. They describe it as

an industry solution for secure, automated payment processing, clearing and reconciliation for the travel and tourism industry

This is not completely a new business. The Australian arm has been in operation since 1991 and claims to already have 6,000 customers, including Australian based offline giant Flight Centre (according to the customer comment section of their website).

I wonder what if anything can be read out of the announcement that it with be the Sabre rep - James Filsinger - that will be CEO with the Amadeus rep - Laurent Chartier - coming in as the COO/number 2. Someone always has to be number one in a company even in a 50:50 JV but this is one with two competitors and one of those competitors is the boss. Could be very interesting to see or maybe I am trying too hard to find a bit of spicy conflict to liven up the story.

UPDATE - Amadeus have given us some more insight the comments section. Sadly no conflict or spice.

Meta-search and GDS: Bezurk and Amadeus do a deal

Asian meta-search company Bezurk.com and European GDS giant Amadeus are officially working together. A deal was announced last week for Bezurk to use the Amadeus web services product known as Meta-Pricer. This does not mean that Bezurk will move to doing its own bookings. Rather the deal is to reduce the toll that Bezurk places on the websites of its airline partners. Here is the press release.

It is an unexpected twist for a meta-search partner to seek out a deal with a GDS so I wrote to Bezurk CEO Martin Symes to get the inside scope. Here is our exchange.

BOOT Asks: Why do you need GDS help?

Martin Symes Answers: Using Amadeus MetaPricer to access airline fares and availability does a few things for us:

1. Improves our supplier proposition – offer airlines a no cost solution
2. Streamlines number of places we need to go to get fares/availability
3. Speeds up response times – gets results to users faster

Most important is the first reason. The airlines we work with have a wide variety of approaches to getting their fares on to their websites. Some connect straight to their host systems from their internet booking engine (IBE). Some have a cache sitting between their host and the IBE. Some use the host of one of the GDS's. Many use a third party IBE which accesses their own host. Each of these arrangements has it's own technical constraints and economics associated with giving 3rd parties access to the data on any sort of scale.

Many carriers that embraced search engine marketing some time ago offer travel search engines access to API's, which typically query a cache populated predominantly by natural search traffic. Unfortunately many carriers don't yet offer these direct API's, although some have plans to do so. In some cases, we have been asked to provide advice on the design of these.

This has meant that screenscraping has been the next best means of us getting access to airline data. Screenscraping works perfectly fine for many airlines which have a system with sufficient capacity, are fast enough, can control and track access, have a layout that doesn't require multiple page requests per query and who aren't getting billed per query by a 3rd party company running their IBE or host for them.

So for reasons both technical and economic, screenscraping is not always a viable means of us getting the data we need. In these situations Amadeus MetaPricer is a good solution because there is no cost to the carriers or extra load placed on their websites because we are querying fares and availability via the Amadeus system. The only thing the carrier needs to do is distribute their fares to our Amadeus Office Id's for each point of sale.

BOOT Asks: Why Amadeus?

Martin Symes Answers: We issued a mini-RFP to all the GDS’s; Amadeus’ response was the most appropriate from a functionality and price perspective. We have also found them to be very responsive to deal with.

BOOT Asks: Who's paying?

Martin Answers: We pay a nominal fee per query; which is more than covered by the revenue we generate from the commercial agreements we have with our airline partners.

BOOT Asks: What about the non-GDS participating airlines like Air Asia, Virgin Blue, Jetstar, Tiger?

Martin Answers: We continue to maintain direct connectivity with non-GDS airlines; many of which are able to provide access to their inventory through API’s or via screenscraping their public websites, where they have given us permission to do so.

BOOT Asks Are non-airline sites (ie hotles) concerned about the number of searches you are doing? If so, what's the plan?

Martin Answers: We work closely with our OTA and hotel partners and have developed unique search methodologies for each partner to minimise any impact. The conversion rates and therefore incremental revenue benefit we drive for our partners far outweighs any search cost issues they may have.

I was going to write that this was the first GDS and meta-search deal but after some investigating found that back in 2001 Amadeus did a deal with Sidestep. Am told by an Amadeus spokesperson that this 2001 is very different to the Meta-Pricer deal with Bezurk. The first difference is that the 2001 deal was a lower level of connectivity (an API vs Web Services) and secondly it was not for the full searching capability that is in this deal - this one includes fares.

Will give them the benefit of the doubt and agree for now that this is a first of its kind. UPDATE - Kevin at Travolution points out in the comments that Kayak and Amadeus entered into the first meta-pricer deal.

It raises some interesting questions about the ability of supplier and OTA sites/systems to support the pounding that meta-search companies threaten to deliver and of the GDS' companies continued efforts to re-invent themselves as technology companies. I get the product reason behind Bezurk's decision here as they need to continue to improve the product delivery to their inventory providers. Is further proof that the meta-search model is still in development and I hope that this deal helps Bezurk continue to grow its product range.

Sabre and Amadeus joint venture - then there were two?

Hot on the heals of the imminent approval of the Galileo and Worldspan merger is news of a Sabre and Amadeus joint venture. But don't get too excited this does not mean we are down to two GDS companies as the JV is for non-air product only according to Travelmole. Unclear to me how that will technically work but given the quantity of non-GDS ways for consumers and travel agents to book non-air would be surprised in the competition authorities rejected the deal.

Amadeus about to be smacked by Sabre in France

Here is GDS the rumour of the year - my spies in France tell me that Carlson Wagonlit Travel France is about to dump Amadeus as its GDS and migrate to Sabre. This is big news in the world of GDS client stealing. CWT is worth some 6 million segments a year or more than 15% of the French market. If the rumour proves true (and my sources say it is a done deal) then it will be one of the largest GDS conversations/migrations in European history.

Now apparently while this is a done deal the "i's" are not yet dotted and the "t's" are not yet crossed. With 6 million segments at stake and with Amadeus' ties to European airlines there is a chance of a last minute "dropping of the pants" in Madrid to stop Sabre making this happen.

Anyone else out there in France know any more?

UPDATE - Sabre's own website has picked up my post in their "Sabre In the News" section but with no hint of a denial.

UPDATE 2 - Given the scepticism of some readers I have gone back to my source for confirmation on this rumour. My insider stands by her story. She says the rumour has been doing the rounds within Sabre's European customers for a couple of months. She should know as she works for one.

UPDATE 3 - Spoke this evening (June 5) with a spokesperson from Amadeus. They said

"The rumour is more advanced that than the reality...CWT regularly review their suppliers and partnerships as part of prudent business practice."

This is not a denial of the rumour but is a clear comment that Amadeus believes they are still in the hunt to retain this client and that the sales battle is not over yet.

EU Phase 2 look should cost Travelport money but not a deal

The EU is planning a Phase 2 investigation of the Travelport (Galileo) and Worldspan merger (here is the Travelmole article. This does not mean that the merger will be blocked as it is really just the equivalent of the Competition Commission saying "hmm...let me think about it". It does however create a headache for Travelport as the cost of submissions and approvals just went up - somewhere in Brussels there is a partner in the EU practice of a big law firm rubbing his/her hands with glee. It also delays synergies and strategic plans causing more costs and pain.

I would be surprised if the Commission ultimately decides to reject the deal. While their initial analysis is right that this would give the combined organisation a powerful number two status in the European GDS wars but that does not mean what it used to mean 10 years ago. There is so much inventory now being booked off GDS such as through low cost and full service airlines direct online, hotels online through extranet based intermediaries (just look at the killer results coming out of Priceline in Europe) and even the interactive tools that the wholesalers are using. Being dominant or strong in GDS should not be the concern for competition that an siilar analysis in 1995 would determine. If the European Commission can clear the MyTravel and Thomas Cook merger then would be strange to make a stand here.

This should make it almost a certainty however that the Commission will want to have a phase 2 look at the Pegaus/Wizom deal. More joy for regulatory lawyers.

Pegasus, Wizcom and the attempted rise of GDS New Entrants (GNEs)

You don't need me to tell you that Pegasus bought Wizcom. If you do, here is BTOnline's report and here is the Internet Travel News Report. You also don't need me to tell you that this means that a supposedly fiercely competitive two horse race is now a co-operative ride in the country. Where there was once two mechanisms for a hotel connecting to the GDS' without going direct. There is now only one. I have been thinking about the angle to put on this. My natural (and historic) angle is to focus on the Travelport elements. To link all of this to my commentary around Cendant becoming Travelport becoming Blackstone and being sold off (see this index).

Instead I see it as a good opportunity to talk about the GNE vs GDS debate. Again you probably don't need me to say that GNE stands for GDS New Entrant. For years it was thought that it was not possible to replicate the infrastructure of the big GDS' - most of which was borne from years of tech investment in airline rez systems. GDS' are some of the biggest and most complicated computers on the planet making the tech side extra-ordinarily expensive. On the revenue side, the business model and therefore the "rivers of gold" like profits is under threat. So (the thinking went) surely there this no way to build a new in GDS or GDS like product in a profitable/sustainable way.

In the last year or so, the GNE's have emerged - led by G2 Switchworks and ITA Software - trying use different forms of connectivity (APIs, xml and other web forms) to provide the same/similar connectivity services of the GDS without the huge infrastructure cost. As they are starting from scratch they are trying different (read cheaper and less complicated) business models than the "I charge you, then give lots to the agent" model of the GDS.

Let's assume that this new model gets traction. Combine this with the enormous power of other non-GDS channels to agents for hotel access and bookings such as wholesaler web platforms, meta-search and plain old Internet sites with xml connections everywhere and in-house dynamic packaging and it could mean that the effect of Pegaus having the main key to the GDS door will be lessened over time.

This is a big assumption to make for now as the GNE model's success is by no means guaranteed. There is not even certainty yet whether they will be able to grow out of the North American market. I have more to learn about it to comment further. If you have some inside knowledge about the GNE market please post a comment. If you work in the sector send me an email and we can organise an interview. For a little more background their is an interesting piece (video and pdf) here with reps from Worldspan, Accenture and G2.

Gordon - King of the GDS

Congrats to Gordon Wilson. No surprises that he was named CEO of the combined Galileo/Worldspan GDS businesses. Plenty of talk for years about the death of the GDS but there is not a technology around that makes interline bookings and complicate combinations easier than a GDS. Sure point to point is easy without the GDS but then there are back office systems, agencies, PNR combinations and more. GDS' makes that possible. Plenty of reasons to criticise a model that that has airlines paying x dollars to a GDS for a GDS to pay more and more of those dollars to an agent. Clearly an inefficient flow of money. But I see the value in the business and know that Gordon is smart enough to reinvent the business. With the combined volumes, technology and e-commerce spread of Worldspan and Galileo, it is clear that Dallas (Sabre) and Nice (Amadeus) are going to be looking over their shoulder.

UPDATE - As an Amadeus reader quite rightly pointed out in an email to me the true HQ for Amadeus is Madrid with the main development centre being in Nice (also have a data-centre just outside Munich)

Sabre - no rumours to monger over

Sabre is now private...a public company no more. I am a little disappointed. With the little hiccup last week over the announcement of a delay in the approval meeting I had hoped for a list minute twist to give me something juicy to blog about - but atlas. The deal is done and the TSG ticker is no more (for now).

Can't ingore $11billion

Have been trying to ignore the actual deal around the $11billion buy-out of Qantas as I wanted to focus my thoughts/rant on the Australian Government's constant screwing up of competition on the Pacific Route.

The story behind the deal is a simple/traditional PE deal - large US group (Texas Pacific Group) joins forces with with the Australian Millionaires Factory (Macquarie) and another Australian group Allco to de-list the Red Rat. I would normally say that owning an airline is a dangerous aim to have. The airline business is subject to constant out of your control shocks (SARS, War, Terrorism, etc), huge capital outlays for airlines and the number one cost element (gas) is not only variable but wildly so. However the Texas Pacific Group are good at owning airlines - they are credited with the turn around of Continental Airlines. Oh - and they now own Sabre. We always used to joke at Galileo that one way to protect segment fee margins was to own and airline...

Too busy looking at Travelport to see the money chasing Sabre

We were all so busy tracking the Travelport and Worldspan rumours that the hints around the possible privatisation missed me until today. Forbes (and many others) say that there are two PE groups bidding for the business in the $4billion dollar range. The stock price has reacted accordingly - up more than 10% at the time I type this. Lots of good assets inside Sabre - of course there is Travelocity and Lastminute - but also the small but successful Holiday Autos and the booming in the US Site59.

Not that it will likely weigh much in the mind of the PE bidders - their weakness is in the Asian online market. Zuji talks a good game with localised sites in many countries - Hong Kong, Singapore, Australia, New Zealand, Taiwan and Korea- but in each of those (except I think Taiwan) they are well behind the leaders despite years in the market and millions in marketing money. Mainly this is due to the product - both functionality and inventory - always being a step behind the competition. The single ownerships structure (as opposed to their early life under a dozen or more airlines) should help fix this however that will depend on them having the right management and almost flawless execution.

UPDATE - here is RedHerring's take on the announced deal. Thanks to Anon in the comments below for being the first to let me know of confirmation of the deal.

"Worldspan+Travelport=Gal-World" - how a search term became a company

First it was a strange rumour. Then it was a search term here and there. Finally it became a mountain (well a small hill) of traffic to travel blogs such as yours truly, Travolution and Travel.Beat. Now it is reality - Travelport (Galileo) has acquired Worldspan.

Interesting points from the deal:

• Cendant bought Orbitz in part because of the huge revenues that Galileo would gain from migrating Orbitz from Worlspan to Gal. Presumably part of the reason behind Galileo buying Worldspan is eliminating the litigation risk and migration cost that arose from that strategy - how serendipitous;
  
• Worldspan itself has been in some financial trouble. This deal will not simply be a case of cutting costs. The Worldspan and Gal products will both have to be kept alive for some time. Reviving Worldspan will be a enormous integration task for Gal; and
• There are lots of financial machinations behind the deal - an immediate recapitalisation of Worldspan and a $125mm loan to Worldspan. The item to keep a close eye on is the comment that
  

  The initial integration focus will be on consolidating technology and administrative operations resulting in near-term cost savings of approximately $50 million

  That is - a lot more head count to go.

But my favourite part of the deal is that it confirms that Google knows everything. There is no secrecy in M&A activity any more because the answers are all in Google's logs. If I can sit he with my tiny free tracking service and see that people with Worldspan and Travelport IP addresses are furiously typing in every combination of Worldspan and Travelport you can think of, can you imagine what could be gleamed from Google, Yahoo, MSN search logs by looking for combinations of company names.

Now comes the fun part - need to pick a new name for the combined company. "Worldport", "Travelspan", "Portspan", "Worldtravel"...all too corporate and boring. We need something fresh that speaks to generation Y - which is why I propose "Gal-World"....OK, maybe not...it probably wouldn't work too well typed in a search engine.

Thanks to Ed Silver who was first to forward the PR news to me.

UPDATE - e-tid are reporting that (registration required)

Worldspan will assume the Galileo name

Record Traffic Day - thank you Worldspan and Travelport

The day is only half over and already I have had a record day for traffic to the blog. Nothing that is going to blow out the stats engines of Nielsen Netrating or Hitwise but enough to make me turn to my referral logs and try to figure out what is going on. There have been some links from fellow bloggers such as Guilliaume at HotelBlogs and Kevin at Travolution (thanks to both). However the area is which traffic is going bananas is search engine traffic around the following terms:

• worldspan + travelport
• worldspan travelport announcement
• travelport acquires worldspan
• galileo rumour
• worlspan rumour
• and so on....

Search traffic is hardly a definitive indicator of M&A activity but it sure is a useful buzz measure. I first 'felt' this traffic spike building last Thursday but today is exponentially higher.

Rumour of the week - Travelport is interested in Worldspan

ATW are reporting the underground rumour that Travelport may be interested in buying the struggling Worldspan.

Worldspan has long been the rumored target of acquisition by Amadeus, but the attention has now shifted to Travelport's Galileo.

I have no idea either way but the searches of "Worldspan" and "Travelport" in the same search entry are one of the leading drivers of traffic to my blog. Clearly someone/people are typing that a lot into Google.

White label, agency label and change in the weather

If recent deal history is anything to go by it is going to be a White (label) Christmas

• Expedia does the full online white label for John Lewis (large UK dept store chain) - first major deal with a non-travel retailer or activity based site;
• Sabre launches a full travel agency white label tool for dynamic packaging, matching (maybe bettering- will have to wait and see) Galileo's Leisure product; and
  
• Zuji has been quietly putting together a collection of Asian white-label partners including taking over the Virgin Blue Holiday business from Spree holidays and a reverse white-label in all of market deal in NZ with Gullivers (where it is all Gullivers in the back end)

Most of these deals mean abandoning the traditional desires of the various players (customer acquisition for the online agents and segment fees for the GDS) for the raw activity of chasing volume. I applaud the creativity of all these guys in finding new models and distribution but it does not take a weather man to know that a change in model can mean that the growth in the existing one is going cold.

The power of advice and recommendation

Amadeus has received approval for its acquisition of 85 people strong, German based Traveltainment. Amadeus have been promoting Traveltainment services in Germany since 2004 so this has not come out of the blue. I have not seen Traveltainment in action but it is claimed that as well as providing an IBE they have a recommendation/advisory capability that works well in the German leisure market. Expedia has also been using Traveltainment at it's DE and AT sites.

Advice and recommendation is a core part of the success in the general web market of social networking. For example I have been having a great time learning about new music and artists through streaming radio station and social network last.fm. It develops personal and artist based streaming radio stations based on the listening patterns of all users. The community decides what to recommend to you, not an algorithm or computer. For example I am a big fan of both Stevie Wonder and Black Crowes - artists that do not have much in common. Through last.fm I have discovered others that have similar tastes and have been recommended songs that fans of both like. The big last.fm competitor Pandora on the other hand looks to music analysts to cut a song and artist into hundreds of "genetic" identifiers to help automatically create recommendations list. Both result in automated recommendations that work. Tripadvisor has been trying to do this for travel through access to an enormous quantity of user reviews and submissions and its new wiki service however has a lot to do before it can automated recommendations as a result.

As I say - do not know if Traveltainment uses tech or community to generate recommendations (though suspect it is tech) but believe that this is the time when the combination of technology and social media have made reliable automated recommendation services a viable - maybe necessary - product in online travel.

Update 15 April 08 - TravelTainment is now the basis for a new Leisure focused division of Amadeus. The group has a cumbersome name "TravelTainment – The Amadeus Leisure Group". According to the press release it will be the "the only multi-market, multi-channel, community distribution system for selling leisure content of all types" (sure, ok, nice, what does that mean). Ralf Usbeck will be the boss/CEO.

Come on Tim - stop complaining and use a Travel Agent

Yesterday I spoke of the difficulties in booking a combined London and Tel Aviv trip and longed for the old direct access to Galileo.

Good comment was posted in response -

"Here's a wild concept, Try a Travel Agent Amazing when you delegate this sort of task how much more time one has to spend with family..."

It is a good point - but - I am. I use a great corporate travel agency - Fcm. Worked with them in my old job and very happy to bring them across to my new company. I find that as a heavy user business traveller I cannot get the service I need as an online only self booker. That might sound hypocritical given my rants about trying to book leisure travel offline but hear me out.

There a couple of things that a great corporate agent gives me that I can't do on my own online:

• pricing - despite all the advances in loading of net fares and search and matching technology I have not found a site that gives me access to the cream of the negotiated business class fares, especially those that are more complicated that London or San Fran return and even more so now that I am in a very small company (6 people). This is certainly the case ex-Australia but I think is also true if I was based in Europe or the US;
• panic in the middle of the night service - I have had half a dozen occasions in which I have had to find someone to speak to out of business hours to fix a big problem: stranded in Paris trying to get home on a Friday with Heathrow shut-down due to a fuel spill; re-routed to Brisbane due to fog; called on a Saturday morning by boss needing me to be in London by Monday morning etc....; and
  
• billing, expensing and reporting - I know that the various corporate arms of Expedia, Travelocity, Orbitz and more have great compliance and expensing mechanisms but none of those are available in Australia.

They are the good points. On the bad side, I find that the individual agents (while very responsive) are not as upto date in their knowledge of non-conventional routings. With each complicated booking combination I find that I have to send suggestions as to which routing to take and airline to use. So while the "panic in the middle of the night" service is fantastic from a good corporate agent, the "find the creative/crazy options" service is not. This is why I want Galileo/GDS access to search and explore. Leads to a product recommendation for corporate travel providers - self booking tools and nice but for complicated users like me I would love:

• web access to itineraries that can be stored on multiple devices and feed into outlook;
• search tool that looks at native GDS for scheduling options (no need to prove availability and pricing); and
• hotel review information

Of course - if you want this level of service you have to be prepared to pay more for it in service fees...I am.

UPDATE - Anonymous commentator recommended that I save time and follow the advice in this link - oh that I could. (link fell off the comment page so am reposting here)

Strangely, I am missing GDS access

I try to cram all of my business travel into the shortest amount of time to minimise days away from the family. Has resulted in some interesting itineraries in the past including a 4 hour layover in Istanbul airport, a 10 hour backtrack from Greece to Australia via Frankfurt and manufacturing an red eye flight from Sydney to Singapore (much harder than it sounds).

I have a new trip I am working on that I did not think would be hard but is proving frustratingly hard to figure out. Across a five day week I want to spend two days in London and two days in Tel Aviv (with a day in between to travel between the two). This should be easy - Tel Aviv is only 5.5 hours from London and almost in a straight line from Sydney. However the benefits of this geography are not reflected in airline schedules or the politics of the Middle East. Therefore I am struggling to find a way that does not involve going through London both ways - which means leaving on a Saturday not a Sunday, increases the security delays and therefore costs a lot of time. I have tried a few of the new generation websites and information destinations for tips - but have found nothing.

Have found myself missing the access to native Galileo that I had in my old job where I was able to look deep into airline schedules without the biasing and deal dependencies that exist in the online travel agent world. Wow...I just said that I missed GDS access...who'd have thought it.