Q: I have been reading about a few new companies that promise
agencies access to one or all of the CRS systems without having to
sign a long-term contract. The companies also promise value-added
front-, mid- and back-office services. Should my agency consider
one of these companies in place of a traditional CRS vendor? If so,
can we get out of our existing, burdensome CRS contract?
A: There are two groups of travel agencies that should give
serious consideration to these third-party CRS-access providers,
which, incidentally, have been around for a little more than a
year.
The first group is those agencies whose current CRS bookings are
under about 150 per CRT per month and whose CRS contracts will be
expiring in the next six to 12 months.
To find your current productivity per CRT (or per "terminal
address," in case you already use your own PCs instead of CRTs
provided by your CRS vendor), you need to divide your total month
CRS bookings for the last month by the number of CRTs or terminal
addresses that you have.
For Sabre agencies, your monthly productivity report does this
for you already.
Galileo, Worldspan and Amadeus agencies need to perform this
calculation each month.
I am finding that there are more and more agencies whose
productivity is slipping into this below-150 range, chiefly because
of their strategic shifts to leisure bookings.
As a result of the decline, they are falling below their booking
quotas for free CRS service and are suffering the pain of having to
pay large CRS bills each month.
Because the third-party CRS providers offer low quotas and low
or nonexistent penalties for low productivity, it may well pay to
check them out.
The second type of agency is the one that wants to add a second
CRS but cannot commit to the number of bookings required.
For example, many non-Sabre agencies would like to use Sabre to
book Southwest but do not have enough Southwest bookings to meet
the typical Sabre quota of 200-plus per CRT.
Similarly, some carriers require use of their affiliated CRS for
corporate discount fares, so the third-party providers may offer a
cheap and easy way to access that CRS for those bookings. I do not
think that any CRS vendor has yet allowed any agency to terminate
its existing CRS contract in order to allow the agency to take
advantage of third-party providers.
However, I predict that they will begin to do so in the next
year, in cases where the provider offers access to the agency's
present CRS system and where the agency is having a tough time
paying its shortfall bills under its current contract.
Mark Pestronk is a Fairfax, Va.-based attorney specializing
in travel law. He answers your questions in the Crossroads' Legal Issues Forum.