In a move reflective of Travelport's focus on its core GDS business, comprising the Galileo, Apollo and Worldspan brands, Gordon Wilson was named CEO in June, after five years of heading Travelport's GDS business and serving as the company's deputy CEO for one year. Editor at Large Johanna Jainchill sat down with Wilson last week in Atlanta to discuss the company's ongoing issues with American Airlines, the mistakes it made rolling out Agility and why the discussion between travel agents and GDSs should be about technology instead of money.
Q: What has changed since you became CEO and sold off GTA last year?
A: We are bringing new product into the marketplace, which I'm very excited about: Universal Desktop, Rooms and More, all of our mobile apps. We are a very focused company now. Our business is distribution, and also IT for Delta, so we are very enthused about what we're doing and focused and beginning to deliver to the marketplace differentiated product, which is getting some really good reviews as people see it.
Q: Where is Travelport now with its debt restructure?
A: The good news is our debt has been restructured, and we have absolutely adequate funds to continue to invest in the products we are showcasing. We don't have any near-term concerns. Obviously we have quite a high level of debt to deal with over a period of time, but our hope is that the markets will have changed by the time that debt becomes due ... [which doesn't happen] until 2014.
Q: How do you think the incentive system between travel agents and GDSs needs to change?
A: At the end of day, the wholesale margin transfer from the GDS to the travel agency isn't a healthy dynamic. If it continues, it will mean the GDSs won't be able to invest in the products that the travel agents want. And there isn't a huge queue of people investing in those kinds of products for the agencies. If it's a question of, this guy will give me 10 cents more per segment than you will give me, then we're not doing a good job enunciating our value proposition. That's a surefire way to drive the industry to the bottom, which is not in the long-term interest of anybody in the chain.
Q: Was that the thinking behind the Agility suite?
A: Absolutely, it is part of what we are trying to do as a company, to make sure we do a better enunciation of our value and make sure we focus customers on the benefits the newer technology has for them, so we can stop having a dialogue about the rate of incentive. Incentives are important; they're not going to go away. But the rate of escalation that we have seen and that our competitors have seen is not a healthy dynamic for the long-term of the industry.
Q: What happened with the way you rolled out Agility in the U.S.?
A: Where in retrospect we could have done better is the way we went about it. We caused the dialogue to be about existing product and bundling packages together, at the expense of focusing on our new products and services and the benefits they have to agencies in terms of improving productivity and reducing their costs, which we think we should be recompensed for.
It's the chicken-and-the-egg thing; it has to deliver for people to see that. ... That's the kind of focus we want to have with the customers. I don't think we did the best job we could have done with Agility in explaining that.
Q: Why didn't you change the way you rolled it out in the U.K. and other international markets?
A: In the U.K. we did a better job from the get-go of talking about the benefits that the newer products have. There seems to be a broader-term recognition in the U.K. about the benefits that technology drives for the agencies in terms of productivity. I don't think we as a company have done the best job we should have done in the U.S. enunciating that same value. That's what we're busy working on in the U.S. after having gotten useful feedback.
Q: Won't it be messy to try to charge agencies for Agility as their contracts run out, and having different agencies paying for different things?
A: Part of what we are trying to do is the simplification of business. One reason we did bundling is to make it simpler rather than having a huge a list of endless products and product permutations, to bundle some together and let them be more efficient and help the agency see they are buying a package of things going forward. What will happen as contracts roll out will be much more a case of individual negotiations.
Q: American says you don't have the technology to deliver what it provides with Direct Connect technology. How do you respond?
A: The technology we've been investing in is designed so we can take content from multiple sources. Our discussion with American, in all honesty, was never about the technology. I think technology was used as a smokescreen. I can't talk for other GDSs, but for me, technology was never the issue. I think the best thing I can do is point you to the fact that we are having increasing traction with other airlines who are putting their merchandise into our GDS: United's Economy Plus seating and the same with British Airways and Qantas doing paid seat assignments, [etc.] ... All I can say is the proof is in the pudding. Our technology is becoming more prevalent, other bigger airlines are embracing it, and we can do what American wants to do technically. So I hope we can get over the nonsense of their legal claims and move on.
Follow Johanna Jainchill on Twitter @jjainchilltw.