In The Big Chair - Gordon Wilson of Travelport

Gordon Wilson, President and CEO

Travelport, as one of the three main distribution platforms that power so much of the mechanics behind the industry, is evolving - not least because it has to, as technology and processes evolve.

The company's undoubted figurehead has seen it all (mergers, IPOs, market challenges and opportunities) and now explains to Kevin May the reasons behind his company's importance and why ....

You are almost a career lifer in travel distribution. On a scale of one to 10, how much harder is it now as a tech vendor than it was when you entered the sector?

“Lifer” makes it sound like a prison sentence! I would say a nine. But it always has been a nine.

When I joined this industry in 1991 it was all new – in fact we were selling a concept more than a reality. I don’t think it has become harder, just different as the business has scaled to be truly global, technology has created all sorts of new opportunities as well as challenges and of course we now do all of this in the glare of public market scrutiny.

It has never been dull since we remain at the intersection of the travel industry and IT industry but essentially our customers want what they have always wanted – an efficient, fast, integrated platform capable of transacting travel value in real time whenever and wherever the end traveller chooses to buy his or her travel experiences.

Any difficulties there are now come from part of what you do or are involved in as a business?

“Difficulties” is such a negative word. I prefer “challenges” but, at the end of the day, if what we do is so easy there would be more people doing it!

So we are managing increased fragmentation of content (making great strides with LCC integration, Fares Families/Rich Content, integrating IATA NDC API sourced content and delivering the broadest hotel and car content available today from anyone in our space), the pivot to mobile commerce (providing apps, data led push engagement versus traditional web browser data pull), some changes to the business model, addressing the need for speed (we have reduced our average response time by one third since the start of the year with no compromise on accuracy but improved relevance) and embracing the capabilities of the Cloud.

The point about all of this in terms of “challenge” is that it is relentless. But we outlined a strategic plan some years ago and have focused our organic and inorganic investments early to manage to these dimensions.

In many if not most of these, in the distribution space, I would argue that we are ahead of the game,which is why we are winning with large online travel agencies such as MakeMyTrip in India, with innovative data/mobile players like Hopper, why we are rated as their top technology provider by Delta and so on. No laurel‐sitting however – we are never finished and we are never satisfied.

Sticking with airline distribution for a moment, do you sense that the sector as a whole has grown up in recent years and accepted there actually is a role for everyone in the ecosystem?

Yes, there has been a steady but clear almost step change in terms of how the industry now is talking about IATA NDC as but one example. There is a realization that it is not just about front‐end aggregation but also about how to enable the workflow automation, change management processes, multiple content integration, robotics for fulfilment, data handoffs and so on which the GDS provide. An API format doesn’t in itself address any of these.

Bear in mind that professional corporate, leisure, online agencies need all of this, plus aggregation and booking at scale, at speed, with reliability and a reasonable cost which is something we excel in. I do however think that there is a better appreciation that airlines need partners who can and do sell more of their value proposition, help them increase their revenues, operate in a cost efficient manner and can move at a faster pace than might have been the case historically.

Clearly the allocation of money flows is still to settle but this will sort out as the relative value added and investments required are better understood. I am glass half full that, albeit with some nearterm pain, as some players push the envelope a little in the exploration of this dynamic, this will progressively result in a revised but still efficient and vibrant ecosystem in travel distribution.

It certainly appears to many that IATA's NDC is the initiative that, say in five years, will be seen a bit of defining moment in the current evolution of the market. Would you agree?

I wouldn’t give it that much credit. It is a communications protocol designed to enable some standardization and ease of interface. Much of what has been touted in terms of addressing supposed deficiencies, such as offering airlines the ability to make tailored offers, the provision of rich content and branding, the simultaneous availability of new airline product in the indirect and direct channels, has already been addressed without the IATA NDC.

It will help for sure in providing standards to enable a wider audience of airlines to participate. For many of these the gating issue is not the distribution channel but rather their PSS provider. Hence the adoption by many airlines of further and new intermediaries and/or investments that they are making themselves to bridge the gap in this area. NDC is just the last piece of this – the conveyance layer and one without the other doesn’t work.

Under the guise of IATA NDC, some of the initiatives undertaken by airlines‐ such as the Lufthansa surcharge and the IAG variant with its “Private Channel” nuance ‐ have changed the compact of full content and “one size fits all” distribution. Whilst in the US, carriers haven’t gone down this route, they too have become more selective about whom they distribute through in terms of agencies which is the challenge of demonstrated value

Through mobile, their own but also through the apps that agencies are progressively providing to their customers, airlines can truly make “tailored offers” and engage with individual travellers without disclosing their prices to the market.

I think that, collectively, the lens of history will show mobile and this change in compact rather than NDC as some of the defining moments in the next stage of evolution in travel distribution.

What is your view on many airlines shifting to a wider retail model with what they want to provide to their passengers?

I totally respect the needs our airline customers who have to receive and deliver more value from and to their passengers and do so in a manner which is cost effective and where cost is related to relative value.

Selling one of the most perishable products on the planet is a challenge few other retailers have.

Equally, few other retailers can reach as many prospective consumers at any time of the day or night on a truly global basis because of the sort of indirect distribution capabilities airlines have available to them.

Thinking of themselves as retailers is a fundamental change for most airlines but theirs is also a model, precisely because of its global nature, which is always going to have the need for third party distribution through onwards retailing of the products airlines have to offer.

The most advanced airlines that I see in this regard are those that not only think of their direct retail experience but also simultaneously think about how to get this into the hands of their indirect channel as efficiently as possible.

And is there a limit to what they can or should be doing? Some argue that airlines should just stick to what they're (hopefully) good at.

If I ran an airline, I too would want to have the best possible direct channel engagement to customers and prospective customers. I would want to be able to move fast and to be in control of my own destiny and I would struggle being part of a “community” model in this regard and have to wait in line until an outsourced supplier could deliver what I need.

However, I wouldn’t see direct and indirect as binary. Ultimately, I would want the experience of assessing and buying my product to be as good in any channel that my prospective customer was looking in. And the truth is that channels are expanding not shrinking in number ‐ albeit with a progressive shift between each of them. It is just getting more and more complicated, hence partners should work to navigate through this together.

If I ran an airline, I would also realise that many of my customers buy more products in the pursuit of their itinerary than I offer on my own, that these customers value some of the services that I don’t offer or want to offer and that my direct reach to many of these customers is actually fairly limited.

When you see the CEO of one of the largest US carriers saying that over 80% of his passengers fly with him once a year, it is manifest that there is little true direct engagement with this large bulk of passengers. There is a massive amount of course with the other 20%.

A once‐a‐year consumer may well however fly more than once a year but on different carriers. The indirect retailer who services this sort of customer is always going to know more about them than the airline. And the realization and opportunity now is that such a retailer may actually be best placed to persuade that customer to trade up, add an ancillary or whatever since they know the customer and his or her propensity to buy in a way that no individual airline will.

I know some of the leading airline CEOs running the best carriers in the business think this way. It doesn’t mean that they should be satisfied with the indirect channel – they should continue to challenge it since this encourages innovation and responsiveness.

If I ran an airline, I too would want to have the best possible direct channel engagement to customers and prospective customers.

Gordon Wilson

Share this quote

Changing focus to accommodation now ‐ why has Travelport stuck to its strategy of providing distribution services in this area, rather than also developing property software? 

Developing property software is a very different business, with a different sort of investment profile, different returns and a different business model. It is also an area that is beginning to look crowded and it is where a number of the large hotel specialist OTAs seem to be moving. Travelport is good at and focused on distribution.

In GDS terms the estimate from third party industry sources is that we have grown to over 40% share of the hotel bookings that GDSs process. Through investment in and creation of a BtoB hotel meta search, our acquisition and investment in Hotelzon and so on, we are now providing multiple rate types (pre paid, post paid, corporate discount, retail, Travelport preferred and so on) at over 650,000 properties.

We are incidentally doing the same sort of thing in car rental. So we are making no excuses for sticking with, investing in and leading in what we are good at in these hotel/car rental sectors.

Some argue the hospitality marketplace is evolving quicker than the airline sector. How do you keep up with that and what opportunities and challenges do you see?

Yes and no. It is still very fragmented. The large chains have engaged in some consolidation comparatively recently whilst the independent hotel sector (from a distribution perspective) is dominated in many markets by two extremely large players.

And as I referred to above, the latter have deep pockets and are investing further in the value chain including automation at the property level which is clearly strategic to them. We are in turn involved not only in improving distribution but also in providing payments solutions between the retailer and the hotelier through our eNett business and this is proving extremely successful.

Similarly our investments are in data and analytics, merchandizing capabilities and digital solutions/connectivity for this sector of the travel economy alongside of course the ongoing integration of hospitality into the other parts of the travel eco system since consumers in the main buy itineraries.

Let's not forget your agencies either ‐ what requirements for tools and services are you getting from your most progressive customers?

Speed/Relevance of Search and mobile linked to vastly improved capabilities in automated fulfillment and customer service through robotics and AI.

On the latter we are about to bring in a whole suite of new products running on the Microsoft Azure Cloud which we are really excited about. Our mobile apps are now used by about 8m travellers and growing fast as we offer more “shrink wrapped” product to our smaller agency customers whilst we do bespoke build work for the apps of larger clients.

On speed and relevance, taking our average response time down by one third is a massive accomplishment this year (and we are using all of Big Data/Analytics and the Cloud to do it) and we have more planned.

Linked to this is the delivery of our next generation APIs which will be quicker, lighter and easier to code to. Some of these are already in production with our first customers. And of course our focus on revolutionising commercial payments and digitalizing the experience through eNett is not only gaining ever more traction but is also the subject of continual product innovation and extension.

Combined, we are spending around $200m a year in research and development for the distribution channel without the distraction of trying to build community inventory management systems.

Coming full circle to your earlier questions this includes ensuring that we can take any IATA NDC API sourced content and offer it through our platform on an integrated basis not just for content aggregation but also for content and itinerary management, robotics in fulfilment, the provision of data and the handoffs to accounting and other systems, in the service of our airline and our agency clients. Hence we are already Levels 1 and 2 certified by IATA and we believe we will get to the final Level 3 either by the end of this year or early 2018.

And how do you bring along those that are possibly less progressive?

Sometimes it is not always good to be the first mover but the second to go, benefitting from the learnings of others. We certainly have some customers who think like this but I wouldn’t call them out as not progressive as a result. Just considered. We spend a lot of time with customers outlining and sharing our vision of the future and hearing theirs, resulting often in beneficial tweaks and nuances to what we are doing.

It's now just over three years since Travelport became a public company. Has that switch changed the company views its investment in technology and the M&A marketplace?

A big benefit to us of being public is that we reduced our debt. Because of this and our performance as a business we have in turn been able to reduce considerably our interest payments. This has given us more scope for investment which customers are benefitting from and for which our shareholders are supportive since we are building a business for tomorrow and not just the next quarter.

Finally, some questions about you ‐ how do you motivate your team and the wider company?

I see my role as setting out a compelling vision for the business, hiring the best talent that I can, creating the best possible conditions for the business so that we can deliver the vision and then continually listening to and engaging with my people and my customers and prospects to make sure that we are on the right road and/or going fast enough. 

One of the great privileges of being around for a long time is that I know how most things work and why. I also pride myself in never asking my team to do anything that I wouldn’t do myself. I think the other key element that any leader has to be bring is passion. I am truly passionate about fulfilling our purpose which is to build technology which makes the experience of buying and managing travel continually better. And we are far from finished!

What was your childhood aspiration?

That was to be a presenter of Blue Peter – a top children’s factual TV show produced by the BBC.

Who is the person who admire most in the industry?

I respect many for different reasons but on my list are Richard Anderson and Ed Bastian at Delta, Carolyn McCall at EasyJet, Michael O’Leary at Ryanair, Alan Joyce at Qantas, David Radcliffe at HRG and Greg O’Hara who put together Certares which includes Amex Business Travel.

I admire my chairman, Doug Steenland, not only because of his business background and acumen but also as an individual with whom I have been through a lot as we have transformed this company.