Chapter 2 Travel reservations and the Internet.
The End of Exclusivity and Monopolies
The Internet Lured Powerful New Competitors to the Travel Industry
CRSs and the Internet
CRS Comparisons What
What the Future Holds
After completing this chapter, you should be able to:
* Discuss the potential of the Internet for the retail travel industry and for consumers
* Identify new online competitors
* Compare the major computer reservations systems
The End of Exclusivity and Monopolies
Travel agents had an almost exclusive lock on travel knowledge before the advent of the Internet: They had sole access to up-to-date transportation information, and they had the voluminous documentation needed to make intelligent travel decisions (hotel guides, cruise and visa information, and so on). What's more, through CRS access, airlines gave travel agents a virtual monopoly to provide the public--conveniently and quickly--with travel documents and information (reservations, schedules, tickets, and the like). However, economic and technological changes eroded much of this monopoly. Airlines reduced the need for paper tickets, and reduced or entirely eliminated travel agent commissions. Non-travel-industry entities, such as Ticketmaster, began offering travel services, and the Internet enabled anyone with a personal computer to access CRS and other travel services. The Internet brought profound changes to the travel and transportation industries in part because of this individual access opportunity and in part because it offered cost reductions and low-cost marketing and sales opportunities. These were advantages no industry could safely ignore.
Many travel agencies began to install computer terminals in the 1970s, long before the personal computer became commonplace in other small businesses. Airlines granted travel agencies CRS access, allowing them to gather information and to process reservations more efficiently. The CRS was created at a time when all such systems were hierarchical and separate: Each large airline made decisions and its client or subscriber agencies followed instructions. Looked at another way, the CRS organization was set up much like a walled, medieval city-state with a defined ruling class (airline management) making the important business and governmental decisions--sometimes in a high-handed fashion, but always ostensibly for the good of the common people (the travel agent community).
In contrast, the Internet's organization (or lack thereof) is much like that of modern Los Angeles: an open city without a clearly defined or dominant center. The individual energy of its inhabitants let business centers sprout up willy-nilly, responding to local needs and whims, without much attention to overall planning or the common good.
The Personal Computer
While the majority of travel agencies depended on CRS-supplied hardware and software as their major business tool, other businesses and industries adopted the stand-alone personal computer as their workhorse. Many of these small, independent computer users connected to the Internet, where they freely communicated with each other in an open, nonhierarchical environment. The importance of this development cannot be overstated. The culture of the Internet was something entirely new, challenging existing business structures, relationships, and values.
The Internet Lured Powerful New Competitors to the Travel Industry
The Internet brought competition and movement to the field of travel service delivery, and it offered opportunities for travel agents--so much opportunity that some online travel services joined the ranks of the top-producing agencies in the country. Jim Frederick of Money magazine provided a glimpse of what consumers could do when selecting a provider of travel services. His article also pinpointed what good Internet travel sites at the time looked like, what they offered, and what features they had that were likely to be useful to consumers. After describing the deal that his "wizardlike travel agent" took only 10 minutes to book, Frederick decided to do a little experimentation and comparison shopping. He had heard that the rapidly proliferating Internet
sites give users access to the same vast and ever-changing reservation databases that travel agents themselves subscribe to. That means you can hunt for the lowest prices yourself, from your own computer, at any hour. So I decided to fire up the old browser to see what the most popular full-service travel agents on the Web could do for me. The results? Well, overall, I'm sorry I strayed. Eight hours, six sites and thousands of mouse clicks later, I had yet to find and book a complete package to match [my travel agent's]. Still, I did turn up enough compelling information to convince me that, under some circumstances, these sites can be useful tools. (1)
After two weeks of experimentation with various trip combinations, Frederick concluded that the huge amount of time needed for multiple searches, using complex and sometimes challenging interfaces, weighed heavily against the self-booking option--even though some sites offered lower prices on portions of the package than the travel agent. Nevertheless, he recommended that would-be travelers check around for current offerings and lowest fares so that they would know what to expect from a travel agent.
Frederick also praised three sites in particular. The first was Preview Travel, which has since been acquired by Sabre, Inc., and folded into Travelocity (thus making Travelocity the most visited travel site on the Internet at that time). He particularly liked the site's "best-fare finder"and search-screen capabilities, though he found its hotel booking capacity limited.
Another standout was Microsoft Expedia (http://www.expedia.msn.com), which had user-friendly password memory, good fare trackers, and nonstop-flight screening ability. Mr. Frederick was not alone in his regard for this service: Expedia received many awards, and at the close of the year 2000, Ziff-Davis Smart Business and Mobile Computing & Communications, Town and Country, Yahoo!, and PC Magazine rated Expedia the "Best Travel Site of the Year."
Travelocity (http://www.travelocity.com) also offered competitive air fares and rates (see Figure 2-1), and allowed criteria ranking to guide its fare searches. However, the site limited the number of itineraries per search, and had a "poorly designed" hotel section. (2)
The sites reviewed in Frederick's article underwent changes thereafter, of course. A notable addition in the summer of 2001 was Orbitz (http://www.orbitz.com), an effort by several major airlines to compete with Travelocity, Expedia, and other online travel agencies. Founded by American, Continental, Delta, Northwest, and United Airlines, Orbitz had the money and clout to put a truly competitive product on the market. It offered consumers real-time search capabilities covering 455 airlines in an unbiased environment. Orbitz also boasted that it had the Internet's biggest collection of low-cost, Web-only fares.
CRSs and the Internet
As they evolved, online travel services tried to work out the many kinks in procedures that made them a less-than-attractive alternative to travel agents for many travelers. They also tried to connect directly with vendors, such as airlines, hotels, and car rental companies, rather than through the expensive CRS intermediary.
CRS services thus had to offer new services to remain competitive with the likes of America West Airlines, which allowed agents direct access to its reservation system through the Internet, bypassing any CRS intermediary; and with mighty Microsoft, whose Expedia online service directly challenged travel agents and the CRS distribution system. It's no wonder that many new CRS products were all Internet enabled. Inevitably, the distinction between CRS and Internet became blurred, and the traditional CRS became part of the Internet universe. Note: This book continues to use the traditional term CRS when referring to these information distribution systems, although the abbreviation GDS (for global distribution system) gained currency quickly.
[FIGURE 2-1 OMITTED]
With the advent of the Internet as an alternate or additional distribution channel for travel services, technology-savvy travel agents began to use the new medium to increase efficiency and profitability. Under this strategy, the CRS activity portion of an agency's business decreases, but the Internet activity increases. The shift occurred gradually, but it is important to recognize its implications and potential.
The convergence of CRSs and Internet-based services was driven by the rapid spread of the Internet, which in turn was accelerated by continuous reductions in the cost of hardware. Ellie Knight, Director of Technology and Training, Leisure Travel Group in Marina del Rey, California, noted, "There are cheaper solutions to desktop access to the Internet and those provided by the CRSs, which are very limited in scope. A good technician should be able to configure an average travel agency with a simple solution for about $500, according to our research." (3) Computer systems costing less than $1,000, in conjunction with the various CRS dial-up services, allowed travel agents to work from home and to effectively become telecommuters. This reduced the need for agencies to include hardware within their CRS contracts.
The convergence of Internet services and CRS services spelled absorption of or even extinction for some of the latter; given this, it is curious that CRS services encouraged their travel agency subscribers to use the Internet. This apparent contradiction may be explained by the CRS services' desperate need for travel agency business, since they stood to lose volume to companies that dealt directly with vendors (airlines, hotels, car rental companies, and so on). CRS services may continue to try to enlist travel agencies in their fight for domination of travel distribution services against companies that bypass them.
Later developments illustrated the danger the Internet posed to CRS services. Inteletravel, working primarily with outside travel sales representatives (SOHO entrepreneurs), tried to attract travel agents with a system that was purportedly more efficient than traditional CRS platforms. E-Travel, a corporate online travel system, planned to offer its agency and corporate clients access to air, hotel, and car reservations without a CRS intermediary. Online travel booking systems that formerly used CRSs to connect their clients with reservation services began to bypass the CRS services in favor of direct deals between online travel companies (such as E-Travel, Preview Travel, and Microsoft Expedia) and providers (such as Continental Airlines, Hertz Rent-A-Car, and Pegasus Systems, a company connecting many hotels with CRS services).
With big, well-financed online travel companies, CRS services faced adversaries that proved more difficult to handle and cope with than travel agencies were. A profile of a leading online travel service from 1998 is instructive.
Preview Travel, Inc.
According to this San Francisco-based company's own press releases, online travel gross bookings grew to almost $200.1 million in 1998, up 149 percent from 1997. Revenues were $14 million (7 percent of gross sales), up 133 percent compared to 1997. The company also boasted about its rapidly growing advertising, non-air income, and number of subscribers: the latter reached 6.4 million (up 3.8 million) in 1998. Nevertheless, this company, whose stock was traded on NASDAQ under "PTVL," lost $22.1 million in 1997, albeit at a shrinking rate of $2.11 per share versus $3.54 per share the previous year. The development of the share price from 1997 to 1998 suggested great investor confidence, as it rose from $7.56 on December 31, 1997, to $18.44 on December 31, 1998.
The company accepted bookings directly from consumers and had strategic alliances with America Online, Excite, Fodors, Lycos, Mastercard, SNAP!, and USA Today. It is noteworthy that the company made efforts to shift business from generally low-fee air bookings to services that generated better revenue, such as car rentals and hotel and vacation packages.
The established CRS companies and their travel agents had to learn new tricks to compete with the new online travel services. The following descriptions show how the CRS companies upgraded their services to remain ahead of the curve.
Each CRS tried to take advantage of new technologies differently, and it was difficult to compare their qualities fairly and fully, especially as they continually adapted to their changing marketplaces. Each system released material claiming that it was the biggest and the best. Figure 2-2 on page 20 highlights each system's characteristics relevant to U.S. travel agencies. The four services were those with the greatest market penetration in terms of participating U.S. agency locations. Naturally, the two major systems --Apollo/Galileo and SABRE--get the lion's share of this section.
SABRE was a leading provider of technology for the travel industry. This publicly held company provided products that both enabled travel commerce and services and enhanced airline/supplier operations. SABRE owned 70 percent of Travelocity.com, the world's leading online business-to-consumer (B2C) travel site; and GetThere, the world's leading business-to-business (B2B) travel site. The company's revenue in the year 2000 amounted to $2.5 billion.
SABRE connected more than 66,000 travel agents around the world, providing content from 450 airlines, 50,000 hotels, 54 car rental firms, 8 cruise lines, 33 railroads, and 228 tour operators. It also included content and connections to large retail travel operations such as American Express Travel, Associated Travel, Carlson Travel Group, Rosenbluth International, Thomas Cook Group, and many others. In its effort to expand beyond the travel industry, SABRE served companies and entities as diverse as AMOCO, ESPN, NationsBank, Pacific Gas & Electric, the Panama Canal Commission, and the U.S. Navy, among others.
SABRE Products for Retail Travel Agents
SABRE presented its continually evolving and expanding products for travel agencies and agents in a multitiered marketing package named SABRE eVoya. It was divided into four components: desktop, delivery, content, and tools. The entire SABRE product line was expertly presented, and described in detail on SABRE's Web site, http://www.sabre.com/products/index.html.
SABRE Products for Both Travel Agents and Travelers
SABRE's "Virtually There" product allowed agencies to add valuable services to their own Web pages. A "Virtually There" link allowed customers to visit an agency's Web site, click on the appropriate link, and check existing flight itineraries. What's more, agents could share information about existing reservations with clients by inserting appropriate links in e-mails. "Virtually There" added interactivity and credibility to an agency's Web site--enhancements appreciated by clients who were used to sophicated sites like those of Expedia and Travelocity.
A vote of 250,000 travel agents in 83,000 agencies in 141 countries named Travelocity the world's leading Internet travel site. Inaugurated in 1996, it quickly became one of the most powerful one-stop sites on the Internet, with more than 1.5 million members selling more than $1 million worth of travel services on record days. Although Travelocity worked directly with consumers, it also featured a travel agency directory that listed participating SABRE agencies. Consumers could make all their travel arrangements electronically and have travel documents issued by their participating SABRE agent; in other words, reservations made through Travelocity's travel agent directory were routed directly to the agency selected by the consumer. Although participation in this directory was free to all SABRE agencies, they had to activate this Internet option in their travel journal records.
SABRE Web Reservations
Any SABRE agency could quickly establish a presence on the World Wide Web with this companion product to Travelocity. SABRE Web Reservations was for agents only: Consumers visited an agency's Web site--complete with logo, address, contact numbers, and so on--and enjoyed the services of Travelocity under the agency's banner. This was seen as a good way to compete against online giants such as Preview Travel. Although this Web site's reservation capability was free of charge, there were one-time fees for logo branding, usage fees for queued passenger name records (PNRs), and possible transaction excesses.
SABRE Business Travel Solutions
SABRE Business Travel Solutions was a complete travel management solution for corporations and their travel agencies. It allowed individual business travelers to connect to up-to-date travel information sources using their own desktop or laptop computers. This versatile application could be used in corporate intranet, Microsoft Windows, and Lotus Notes environments. Employees could make reservations that met the requirements and guidelines of their corporations' corporate travel policies. The SABRE Business Travel Solutions package featured Agency Link technology, providing seamless integration between corporations and their travel agencies.
SABRE's Technology Strategies
SABRE summarized its view of the future in an extensive statement of technical direction for electronic travel distribution. (4) To move the rapidly increasing amount of information, the SABRE network was to use Frame Relay and TCP/IP at a standard speed of 56Kbps. These enhancements were intended to lead to seamless integration of content from SABRE Agent Explorer and graphics (images, maps, photos) on the Internet.
SABRE positioned itself as an electronic point-of-sales system for very perishable travel services. Figure 2-3 illustrates a travel distribution model with four parts:
1. Buyer data contained in PNRs and other client records
2. Seller data contained in CRS databases
3. Fulfillment loop producing travel documents
4. Transaction kernel where items 1-3 interact
This vision of the future placed the SABRE travel distribution network firmly in the Internet arena.
Galileo International and Apollo Travel Services
In June 2001, Cendant Corporation, which owned Avis car rental and the Days Hotel chain, acquired Galileo International for almost $3 billion in stock and cash. Thus, what started as United Airlines' reservation system evolved into a global distribution system (GDS) owned by a vast conglomerate, where it had to show that it could be as profitable as Avis and Days Inns. This was quite a challenge, as the GDS business was growing slowly and travel agents--the major source of Galileo's revenue--were retrenching because of narrower margins and competition from online travel sites and companies.
[FIGURE 2-3 OMITTED]
According to David Tongut, a research analyst for Morgan Stanley Dean Witter, (5) "one of the primary differences between Galileo and The SABRE Group is that Galileo tends to be more of a cautious follower when it comes to technology.... Galileo is much more overseas focused compared to SABRE." This overseas emphasis stemmed from the system's international ownership (Aer Lingus, Air Canada, KLM, Swissair, and United owned about two-thirds of Galileo International). In stark contrast to SABRE's business plan, which called for expansion beyond the travel industry, Galileo International stated that "the company's growth is driven by airline bookings." (6) Galileo International operated two computerized reservation systems: Apollo[R] was marketed in Canada, the United States, Mexico, Japan, and certain islands in the Caribbean; and the Galileo[R] system was offered in the rest of the world. Because this book is for use in the United States, we discuss the services of Apollo Travel Services, a fully owned subsidiary of Galileo International.
Apollo Services for Travel Agencies
Galileo International distributed its services to U.S. travel agents through Apollo Travel Services, while retaining its traditional name and image.
Focalpoint pioneered the integration of Windows-based technology with its CRS back in 1987. Focalpoint 3.0 made the Apollo system responsive to agencies' needs by including several Windows tools for third-party compatibility. Because Focalpoint used the Windows environment, it was easy to operate, "eliminating the need to learn 'computerese.'" (7)
The "Dial-Up[R]" service made Focalpoint fully portable. With the correct passwords, any Internet-connected computer could provide an experienced user with Focalpoint services anywhere. It was great for presentations away from the office, or for access to the CRS during business trips.
Focalpoint Remote Office
The Remote Office capability allowed several agents to connect their home computers, using Focalpoint software that gave them the same interface as at the office. A Focalpoint local area network (LAN) was required at the agency location to run this software.
Focalpoint SE[TM] served agencies that wanted to control the selection, purchase, and installation of their hardware. All the features included in Focalpoint 3.0 were packaged with Focalpoint SE[TM].
Focalpoint Relay[TM] Productivity Tools
The Relay[TM] suite of services provided agency automation beyond Focalpoint by increasing productivity for both inexperienced and expert agents. It helped capture data such as itineraries, PNRs, and queues to convert them to other uses such as PRO-files, editing, e-mail, and fax.
Premier[TM] Car and Hotel Applications
Premier[TM] was just one of the many applications provided by Apollo Travel Services as a graphical (Windows-based) alternative. These applications enabled novice agents to handle booking cars and hotels immediately through the Apollo[R] system.
Viewpoint[TM] was Galileo's third attempt to present a graphical user interface (GUI) for use by travel agencies. Viewpoint[TM] brought the point-and-click environment, so well known to Windows and World Wide Web users, to travel agents. The software could be used by 486 computers and was free of charge. According to a senior vice president of Subscriber Marketing at Galileo International, "Viewpoint help[ed] travel agencies become more customer-focused by allowing them to concentrate on developing their sales and customer service skills instead of spending valuable time learning traditional entry formats." (8)
Galileo International Services for Consumers
Travelpoint In contrast to SABRE, Galileo International opted to channel all online bookings on this site through agents, stating that "Travelpoint.com[TM] is brought to you by your Apollo[R] travel agency and Galileo International." However, Galileo was the CRS for public travel sites such as America Online (AOL) and Internet Travel Network (ITN). Travelpoint was an Internet-based booking product that was integrated with the core Apollo and Galileo reservation systems. This online booking engine allowed travelers to make their own air, hotel, and car reservations, with all ticketing done by an Apollo travel agent. Travelpoint was designed to serve both private and corporate travelers and it asked the user to choose between services for the general traveler or for the corporate traveler. Once the user selected the appropriate area of the site, existing corporate travel policies and individual preferences were automatically observed. Users could also view their current and past itineraries and make changes to their personal profiles.
Travel agents were able to personalize their Travelpoint.com Web sites with their own agency's name, address, and logo, and could also customize it for each of their corporate accounts. With this product, agents could compete with industry behemoths such as Preview Travel (now part of Travelocity).
A Galileo International press release touted Travelpoint.com as "a tremendous low-cost opportunity to improve corporate control, traveler convenience and agency productivity. It enables agencies to increase their focus on high value services and provides an option for more effective travel management programs." (9)
Corporate Travelpoint[TM] Attempting to catch up with SABRE's Business Travel Solutions, Apollo combined forces with Internet Travel Network to create Corporate Travelpoint[TM]. It was designed to meet the most exacting travel management requirements of the largest corporations, by giving corporate travel managers the ability to:
* Rank preferred air, car, and hotel vendors by specific market
* Administer air, car, and hotel contracts to ensure that travelers used preferred vendors
* Enforce corporate policy compliance through exception reporting and approval
On a global basis, Worldspan was the smallest of the major CRS services. Its history dated back to 1968, when an internal reservation system (later named DATAS II[R]) became operational for Delta Airlines, and to 1971, when a similar system (later named PARS[R]) was started by Trans World Airlines (TWA). Northwest Airlines became a co-owner of PARS.
In 1990, Delta, Northwest Airlines, and TWA combined their CRS services, and by 1994, the three systems' unification as Worldspan was completed. Ownership of the CRS in 1998 reflected this background: Delta (38 percent), Northwest (32 percent), and TWA (25 percent). World headquarters were in Atlanta, Georgia, and International Division headquarters were in London.
Worldspan's two lines of business were (1) the CRS, serving travel agency and associate customers worldwide; and (2) the airline services operation, providing hosting and related technical services to a growing number of both major and smaller airlines. Because the owners were aware of the declining share of airline ticket distribution by travel agents, they sought new information technology (IT) and CRS business to keep the company profitable.
Worldspan redesigned its services and clustered travel agency services under the title WorldspanGo[R]. This was a Web-based concept in travel technology that represented high-speed digital access to a worldwide electronic marketplace of travel and travel-related information. It featured:
* Graphical user interfaces for airline, car, and hotel bookings
* A browser-based reservation system
* A real-time preferred content database
* Electronic software distribution
* Connections to third-party software applications and solutions
* Links to help-desk and training servers, along with a wide spectrum of tutorials
* Access via dedicated line or Internet
* WorldspanGo![R] Mail and WorldspanGo![R] Fax capabilities
The Worldspan organization was intended primarily to service large travel agencies.
Amadeus (Formerly System One)
Although Amadeus claimed to be the largest global travel distribution service, its U.S. market share had dropped to about 12 percent by 1998, making it the smallest major player among CRSs servicing American agents. (10) In contrast to Galileo International, which retained its traditional Apollo brand in most of the Americas, Amadeus folded the familiar System One nameplate into its worldwide brand.
System One began in 1981 as the CRS of Eastern Airlines, whereas Amadeus started out as a joint effort of Air France, Iberia, Lufthansa, and Scandinavian Airlines System (SAS); the latter group wanted to create an independent, European-based distribution and reservation system for the travel industry. In 1987, Amadeus and System One began to cooperate. The merger process was completed in February 1998, when Amadeus Global Travel Distribution (then owned by Air France, Iberia, Lufthansa, and Continental) became the sole owner of Miami, Florida-based Amadeus Global Travel Distribution LLC, the company that distributed and marketed System One Amadeus in North and Central America and the South Pacific. The nerve centers of Amadeus were in Madrid, Spain (marketing); Erding, Germany (operations); and Nice, France (customer support and development), with Miami serving as its North American headquarters.
In August 1998, Amadeus announced some details of Project Vista, its browser-based front office system. With Project Vista, Amadeus boldly went where no CRS had gone before, giving agents the tools to incorporate the CRS information into an Internet environment. This meant that agents no longer had to make the awkward switch between making a reservation and accessing the Internet or e-mail any more--they could do it all through one conveniently integrated reservation screen. Project Vista was be tested in the United States and Canada beginning in November 1998.
Whether Amadeus was accessed via the Internet or a dedicated line, its services were built around the Amadeus Central System. It provided real-time access to schedules, fares, and rates of airlines, hotels, car rental companies, tour operators, and other travel vendors.
* Amadeus Air gave access to the schedules of more than 700 airlines, with reservation capabilities for 400 and last-seat availability for more than 260.
* Amadeus Hotels worked with almost 300 hotel companies, offering reservations for a combined total of 49,901 properties worldwide.
* Amadeus Cars featured more than 50 car rental companies representing 19,000 locations worldwide.
* Amadeus Rail provided access to Amtrak and Britrail.
* Amadeus Tours had 23 tour providers in the United States.
* Amadeus Cruise used Cruise Match 2000 to allow users to make real-time bookings for Royal Caribbean and Celebrity cruises.
* Amadeus Destination incorporated destination information and the ability to sell local leisure services.
* Amadeus Traveler was a combination of the PNR and customer profiles, allowing easy transfer of information from one to the other.
* Amadeus Fares allowed agents to display, compare, and sell more than 40 million fares for air, rail, and ground transportation.
* Amadeus Documents produced the full range of travel documents in both paper and electronic formats.
Amadeus Services for Travel Agencies
The services of the Amadeus Central System were delivered to agents through the MAXSys agency productivity software (APS), which included a variety of handy macros to speed up transactions. An add-on to this software was the Service Bureau Fare Choice[R], offering alternative, lower fare, and flight recommendations when compared to an existing itinerary or given a price to beat.
ExpressRes[TM] was a Windows-based productivity tool that removed the burden of having to know thousands of cryptic commands to query the Amadeus system.
Amadeus Services for Home-Based Agents
The HomePro was a Windows-based remote access program that was to be replaced by a remote version of Project Vista.
Amadeus Services for Corporate Users
The Corporate Circle[R]and Premium Corporate Circle[R]products included training, seminars, network opportunities, and discounts on Amadeus products. They also came with Corporate TripSolution [TM], an Internet- or intranet-based booking product through which travelers could book air, car, and hotel reservations online, with completed PNRs queued to the travel agency for quality control and ticketing. Add-ons included services such as:
* Availability displays biased to reflect company-wide policies and individual traveler preferences
* Low-fare searching and access to preferred vendors
* Policy Designer, to develop and/or improve travel policies Amadeus Services for Consumers
Online Basic Consumers could connect with the Amadeus system at http://www.us.amadeus.com, where they had to enter the name of an Amadeus travel agency. Amadeus Online Basic was an excellent, low-cost way for agencies to get onto the Web quickly and without hassle.
Online Premium This marketing program featured a private-label Internet booking product--essentially a privately branded, customized booking site. In contrast to the Online Basic service, Online Premium gave Amadeus agencies the freedom to create their own content, including logo, agency description, and more.
Amadeus Business Strategy
Amadeus moved aggressively into new areas by acquiring vacation.com, at the time the world's largest Internet-enabled network of independent leisure travel agencies, with more than 8,400 members responsible for travel sales of more than $20 billion annually. Amadeus also bought a minority stake in One Travel, a top U.S. online travel Web site. In cooperation with Lycos Terra, it launched Rumbo, an online travel agency aimed at Spanish- and Portuguese-speaking countries of Europe and South America.
What the Future Holds
None of the CRS services were ready, as of 1998, to cut the dedicated telephone lines that tied them to their agencies, but the time will come when these lines have to be abandoned to make way for Internet access. Agencies that need a separate modem to connect to the Internet will find that a less-than-satisfactory solution. CRS companies will probably enable agent access via the Internet with intranet and/or extranet solutions. Nevertheless, travel agents could not just wait for the CRS services to provide optimal Internet solutions; they had to find the best deals in this new technology by themselves.
Online technology brought new competitors into the retail travel marketplace. CRS services adapted by offering novel services to both consumers and travel agents, though CRS services regarded their relationship with travel agents as key to their success. All four major CRS services were moving toward Internet compatibility.
Travelocity and Expedia were two of these competitors. Travel agents needed to understand the nature of these companies and their approaches.
The two dominant CRS services in the United States were SABRE and Apollo; Amadeus and Worldspan were minor competitors. All travel agents had to be familiar with the product lines of the two major companies.
(1) Jim Frederick, "Fare Values? Trying to Net the Best Online Travel Deals," Money, 4 April 1998.
(2) Frederick, "Fare Values?"
(3) Ellie Knight, personal conversation with author, 1998.
(4) See http://www.sabre.com/products/index.html.
(5) Quoted in an interview with Diane Mayoros, Wall Street Corporate Reporter. Retrieved July 31, 1998, from http://www.prnewswire.com/ cnoc/GLCanalyt.html.
(6) Mayoros, interview.
(7) Service description from Galileo International's Web site. Retrieved July 31, 1998, from http://www.galileo.com/agencies/.
(8) Galileo International, press release, 29 September 1998.
(9) Galileo International, press release, 29 May 1998.
(10) Joan M. Feldman, "CRSs on the Move," Air Transport World 35 (no. 5, May 1998): 73.
FIGURE 2-2 CRS characteristics compared (as of 1998) Apollo SABRE Amadeus Worldspan Major Aer Lingus, AMR Air France, Delta, Owner(s) Air Canada, Iberia, Northwest, Alitalia, Lufthansa TWA Austrian Airlines, British Airways, KLM, Olympic, Swissair, TAP, United, US Airways Agency Products Windows Focalpoint PlanetSABRE Amadeus Worldspan Program for Windows Internet Travelpoint Web Amadeuslink WorldspanGo! Program Reservations Corporate Travelpoint BTS Corporate Worldspan Travel Circle Trip Manager Public Travelpoint Travelocity Amadeuslink. WorldspanGo! Web Site com
|Printer friendly Cite/link Email Feedback|
|Publication:||Internet for the Retail Travel Industry|
|Date:||Jan 1, 2003|
|Previous Article:||Chapter 1 Historical perspective.|
|Next Article:||Chapter 3 Getting onto the Internet.|