CRS Strategies - The TTA White Papers Revisited

Slightly Edited Version Published in Travel Distribution Review, October 9, 1997

A year later, each CRS has remained "true" to the foresight of its President in the 1996 Travel Technology Association White Paper. With CRS interest in Internet in virtual infancy a year ago, each of the CRSs has today evolved independent strategies that reflects the leadership of each of the President's.

SABRE has implemented a dual strategy that appears intent on dominating, if not controlling, all aspects of the travel distribution process. On the one hand, the SABRE Travel Information Network (STIN) endeavors to sustain its core travel agent network with Internet and Intranet "friendly" tools such as PlanetSABRE and the Business Travel Solutions corporate travel product. Concurrently, SABRE is investing heavily in its SABRE Interactive (SI) products that are directly focused on eliminating intermediaries between buyer and seller as it competes with Microsoft. In so doing, SABRE is pioneering new direct booking solutions. SABRE has undertaken what appears to be a two-pronged approach consistent with the words "...many channels, many players, and new rules."

As System One/Amadeus (SOA) strives to expand its share of the U.S. domestic market, new innovative SOA solutions are focused on gaining rapid access to already networked or consortium linked agencies. Rapidly installing "agent friendly Internet tools" that lend themselves to collective human interaction, SOA is teaching agents how use the new technologies in a very human based selling mode. System One/Amadeus seems focused on providing agents with tools that enable "...them collect, maintain, and access detailed information on customers ... and quickly find and package data." The have recently added an agent Internet interface eliminating the need for dedicated lines to agency sites.

Worldspan seems to have taken the most "laid back" strategic path at the point-of-sale. Rather than build point-of-sale solutions, Worldspan appears focused on becoming a "switch" to the airlines. Thus, virtually any vendor with a product that provides point-of-sale solutions is enabled via Worldspan. With Microsoft, American Express, Abacus, Travel Technologies, and tour operators, among others, providing the point-of-sale investment solutions, Worldspan has focused its development money on its "switch" effort. Rather than experiment with alternative "front end" solutions, Worldspan seems targeted on becoming an "On-line transaction processing and electronic funds transfer..." utility that will, over time, "... streamline the travel selling process."

Only Apollo/Galileo remains an enigma as one attempts to identify specific initial Internet strategies. It would appear that a yearlong "tug-of-war" between the Apollo and Galileo entities over strategic direction (including Internet) might have been resolved with the recent proposed Galileo IPO and acquisition of Apollo. Still, to date, most of Apollo's Internet exposure has not been of its own impetus, but through "front end" providers such as the now defunct PC Travel. Apollo has remained consistent with the thought that suggests the Internet is unlikely to "... alter the essential structure of today's travel distribution system." Apollo's recent announcement of Mellinium3 shows some "reaction" progress, but delivery is still months away.

Over the past year, each CRS has kept its strategic investments targeted along lines originally outlined by their respective leaders a year ago. Obviously, each CRS is, in fact, "testing the waters" in as many travel distribution alternatives as possible. But, other than for defensive marketing positions, the next few years are likely to see increasing investments in the strategies initially taken by each. It will take at least three to five more years of "testing" evolution in the distribution structure before one or more of the strategies begin to show results.

As these strategies evolve, the importance of selecting a CRS that fits a given company's business strategy becomes important. While the author uses the term "agency" below, the strategic direction is equally applicable to any travel distribution solution that uses CRSs (i.e., corporations, consolidator, tour operators, etc.).

Agencies (or corporations) that seek to offer travelers self-service functionality from a "name brand" travel provider will want to look closely at solutions from SABRE Interactive (Travelocity). However, implicit in most SABRE Interactive (SI) solutions is a functional independence from the traditional agency distribution channel. Microsoft's Expedia offers similar self-service through Worldspan. Microsoft, of course, is an agency and makes no provision within Expedia for working with other agencies. SABRE, on the other hand, will allow self-booking travelers to pass records to designated agencies ... although this is more often through the SABRE Travel Information Network (STIN) tools rather than SI gateways.

Agencies needing "high end" policy controlled booking functionality using live interactive agents to provide the booking service will find, in today's environment, the best CRS provided solution is STIN's BTS product. The BTS solution represents the only current "in the market" CRS provided solution available to any agency seeking agent tools to effect mass-booking-volume bridges to new technology solutions. The BTS solution is corporate focused (although there is nothing to prevent its use for other agency services). As with most SABRE products, these tools are largely "cradle-to-the-grave" solutions from an agency's perspective ... and are priced accordingly.

Agencies that believe strongly in the use of Internet as an information resource to facilitate human knowledge and interaction in the travel service process will most likely find their best current CRS solution in the System One/Amadeus product offerings. The new SOA Entrée Internet-based browser reflects the need to serve a growing market of "at home" agents with tools that enable the same kinds of services that "store front" offices offer. Further, The pricing and solution alternatives reflected in the SOA group purchase agreements of the past few months is very attractive to agencies seeking control over their own hardware, those seeking interactive agency team support, and/or those wanting innovative self-participation in the growth of the Internet phenomenon. Still, agents or agencies that seek this strategic path will need or acquire greater PC skills than has been necessary in the past.

Somewhere between the SABRE "cradle-to-the-grave" solutions and the Amadeus "own-your-own" strategy lies the current Worldspan path. The Microsoft Expedia self-service solution noted above is representative. In other applications of this strategy, Worldspan has enabled other business entities to provide different types of booking interfaces. It competes with the SABRE BTS solution through the American Express AIX solution and Travel Technologies Group's Trip Manager. It competes with Travelocity through E-Travel's Internet booking product(s). These are only a few examples where Worldspan has enable agency/user technology to be the "front-ended" human interface, while Worldspan serves as the "switch" to the airline and other vendor inventory systems.

Apollo (about to be Galileo) has yet to implement a clear strategic direction. It appears that many Apollo agencies, almost in self-defense, have pioneered many different "front end" solutions. Unlike Worldspan, who appears to have exercised some strategic control over the development of its solutions, Apollo has exercised little (if any) strategic control over those developing in its environment. This is exemplified in the Apollo pricing strategies that (a) virtually forced PC Travel out of the Internet solutions, (b) negate self-owned hardware solutions for agencies, or (c) de-incentivize third party developers to evolve new tools in the Galileo environment. Agencies seeking to implement any future strategic direction other than "do-as-we've-always-done-it", put themselves at some risk until such time as Galileo asserts its strategic controls. It should be noted here that, in other parts of the world, Galileo seems to be aggressively implementing an open systems strategy.

Clearly, users of the CRS environment should pay close attention to these evolving strategies.

As each of the CRSs has evolved strategies that represent different ways to survive in the digital economy, so too are each agency's vendors and clients evolving and testing new strategies. Using allied strategies can be a strong link in reaching mutually satisfactory contractual agreements with the CRSs. Innovators of technology solutions will want to seek out those CRSs that have strategic goals most closely aligned with the agency's service levels and product differentiation. Those CRSs with strategies most closely aligned to the business needs of the "customer interface" are more likely to evolve economic platforms of mutual dependency.