In the Hot Seat
Johanna Jainchill sat down with Travelport CEO Gordon 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. Read More
ATLANTA — While admitting mistakes in the way it rolled out its Agility suite, Travelport said last week that the program is here to stay and that the principles behind it will enable both travel agents and GDSs to move into the future.
Travelport executives also said that an ASTA statement earlier this month and trade publication reports, including a Page 1 report in Travel Weekly’s Jan. 9 issue, had mischaracterized a change in the timing of charges for Agility as applying to all Travelport customers, when in fact the changes were being applied on a case-by-case basis.
Agility became something of a dirty word among North American travel agents who subscribe to Travelport’s GDSs — Apollo, Galileo and Worldspan — after they learned last month that they would be paying a monthly fee for the Agility bundle of programs, several of which were previously free and some of which are new.
Speaking near Travelport’s U.S. headquarters here last week, CEO Gordon Wilson admitted that the company made mistakes in the way it rolled out Agility to the North American market last month. But he insisted the model works, saying that the current incentive agreements between GDSs and travel agents needs to change.
Travelport said that while the trade press and even ASTA had been led to believe that Travelport had rescinded the fees associated with the Agility program until agency contracts ran out, the move was not in fact systemic: Agencies that were told they would not be charged for Agility until the end of their current contracts were given that information on an individual basis.
Kurt Ekert, Travelport’s chief commercial officer, said that the company made “limited changes” to the program based on feedback it had received last month. The primary change was that the new products were taken out of Agility and are being sold separately.
“We are charging for it,” Ekert said. “We have commercial conversations with every customer, and we are trying to make sure we come to agreements that work for us and the customers.”
On Jan. 4, ASTA issued a statement saying: “On Dec. 30, 2011, ASTA learned that Travelport had rescinded its previously announced plan to impose fees on Travelport subscribers for a program called Agility that included features already contracted for by subscribers with different fee structures than Agility. This is welcome news.”
Ekert said that ASTA was in fact wrong in its characterization of the fees for the program having been rescinded.
“We got feedback from customers and changed what’s in and out of the bundle,” Ekert said. “And we’re dealing with customers on an individual basis about what it means for them commercially. But no, we did not make any programmatic change.”
When asked if that bundle included products that were previously free, Ekert said, “There are products that were previously free in the bundle. ... I’m not going to speak about any individual customers. We never do that.”
Ekert and Wilson were part of a chorus of Travelport executives here who said that the company erred in the way that it rolled out the Agility program in the Americas, because it let the conversation become more about fees than about content.
“We believe this comes down to the fact that we have to prove the value of what we are providing to our customers,” Ekert said. “If we do those things, commercial conversations should become less of a prime issue.”
Wilson said another problem with the way Agility was presented to the North American market was that the dialogue focused on the fees and bundling aspect, “at the expense of focusing on our new products and services and the benefits they have to agencies.”
Wilson asserted that the overall incentive arrangement between agents and GDSs needed to change so that GDS companies would be able to invest in products that would make agents more efficient and productive. In many cases, that will mean paying for programs that meet that standard.
He added that Travelport needed to do a better job of explaining its value to agencies so they understood that such a system will ultimately benefit them. “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,” Wilson said. “That’s a surefire way to drive the industry to the bottom.”
Shifting the conversation to products is a major goal of Travelport, which is proud of the many new technologies it has released in the last year and those that are still in beta, Wilson said. All of them will lead agents toward the future, and maybe even away from the green screens, he said.
Wilson said he wants to steer the conversation to the value and differentiation of products such as Universal Desktop, a program designed last year that expedites and simplifies the booking process by aggregating GDS and third-party content into a single platform, and Rooms and More, which, Gordon said, “opens up the vista of all these independent hotel properties around the world which have never been transacted through any GDS.”
Gillian Gibson, Travelport’s chief marketing officer, said that despite all the brouhaha, “It is not new that people pay for technology in this industry at all. Many, many customers pay for different parts of technology, and if you think about it, that’s how you continue to invest in technology. The fact is there are very few industries where you do not provide [a return on investment] for technology investment.”
Gibson said that the point behind Agility and other programs that Travelport is developing is to “get ahead of the curve.”
“I think as customers look at these products more and more … you will find they will be quite grateful that we’ve invested in these technologies and that it will provide extended utility in the future,” Gibson said.
Citing the noise airlines are making about their unbundled sales strategy, Gibson said, “We have to extend these platforms so that they can take the content in the way the airlines want to sell it. Unless we do that, we are going to end up with a lot of customers who are not able to efficiently sell the full service of airlines offerings.
“It’s clear to us that that has to happen now,” she added. “It would be a disaster if some major air content was not available to our existing customer base.”