Ask a Travelport executive about how the UK-based technology company stands out from its rivals, and you'll hear a lot about non-air content.
Nearly a quarter of Travelport's revenue comes distributing hotels, rental cars, and other non-air products, according to several executives speaking at a recent customer conference put on by the company in San Antonio.
The company plans to grow that share to a third within a few years.
If you haven't been paying close attention, here's an update on how Travelport has evolved in the past few years, according to the message its executives are sharing with agencies and suppliers.
Scott Hyden, group vice president and managing director in the Americas, said:
"One thing that differentiates us is on the hotel side. Obviously Priceline, Expedia, and the Chinese company Ctrip are massive in third-party hotel distribution.... Yet Travelport is actually competitive.
Given that we have 650,000 hotels available in our system, across 23 aggregators, and given that nearly half of our agencies are attaching hotels to bookings, we consider ourselves to be the fourth-largest third party distributor of hotels, with 61 million room nights booked through our platforms in 2014.
One important note is we are larger than Sabre and Amadeus combined in hotel distribution....
We spend several hundred millions of dollars a year more on distribution technology than our competitors. We believe we spend twice as much money on what matters to people in in distribution than Sabre, for instance.
Our traditional competitors spend more money on airline hosting systems and hotel property management systems, which are great revenue sharings for them, but the bulk of our money is spent in the area of distribution. We build, buy, or partner. "
Not all is rosy, though. Amadeus had roughly double the revenues of Travelport in the first nine months of 2015.
Yet Travelport was making the case that its company has emphasized different investments from its competitors, which will mean a solid market positioning as the business landscape changes.
For one thing, Travelport said it has doubled down on distribution technology, while its traditional rivals have neglected that spending.
Niklas Andréen, senior vice president and managing director of global hospitality, car & digital media, said:
"We're moving to what I call OTA-grade descriptive content. The hotel's TripAdvisor ratings are there on Smartpoint, our desktop tool for agencies. The corporate client's negotiated rates with the hotel chain are there in the tool.
We are eliminating the need for agents to jump out of a booking or out of a workflow to visit an airline website or a supplier portal, whatever it might be, from maps of where a hotel is to the commission that the agent could make on a booking....
We will get to the point where the agent can quickly say to a client, based on where the meeting is, the client's usual preferences for hotels, TripAdvisor ratings, the negotiated corporate rate, my commission, etc., 'Here are, say, five hotels I recommend....'
Today we have a 48% attachment rate hospitality segments per 100 airline segments. As agents get adopted to the model of always trying to attach a hotel or a rental car as soon as air is booked, our hotel transaction volume will grow on a steep curve."
A 48% attachment raise does suggest that Travelport has a wider product reach with travel agents than its GDS rivals do.
Travelport said Smartpoint is on 85 percent of its global desktops. But it won't reveal how many bookings are going through that system with a consumer-style graphical interface instead of the older dot-matrix-style green screen.
That silence suggest that many agents have been slow to learn the new system, limiting the speed at which Travelport can help companies merchandise. It's a problem all of the GDSs face with agents trained for decades on traditional desktop tools.
The content also is somewhat uneven today, as not all hotel content was being loaded by hotels in a standardized GDS manner.
Various independent boutique hotels may load data differently and hotels in different geographies may have different amenities. But the problems are being smoothed out over time, according to Andréen:
"We've been conducting audits. It's now mandatory for hotels to provide 10 key attributes to be in our system."
Adding hotel loyalty data has been another effort. The company has partnered with 49 hospitality brands to bring in loyalty profile information so that agents can make sure the full offers are available to corporate travelers.
The air business
On the air side, Travelport has been claiming that it has been more cooperative and innovative about airline merchandizing than its traditional GDS rivals have been. Said Hyden:
"If you, as an airline, want to come to our portal, you can load imagery for your economy comfort seat, or you can explain your baggage fee policies. Whatever it might be, you can load that content.
We’re not just the plumbing that works behind the scenes. We can help you with retailing.
Not only do we have 120 airlines — including 30 majors worldwide (like United, Delta, American, Lufthansa, Swiss, Emirates, Air Canada, Ryanair) signed up for our rich content products, we have more than 80 airlines live already.
For instance, United is selling My Economy Plus Seats through Travelport today. It’s dynamically giving agents the prices. Air Canada sends us a hundred percent of their content through XML. And so on."
The Lufthansa issue
Travelport isn't alone among the GDSs in saying it is ready to merchandize in a way that the airlines want. The other two GDSs say that, too.
Not all airlines seem to agree. Lufthansa recently introduced a surcharge for all bookings made through third-parties, claiming that its direct distribution could be more nimble and less costly.
Lufthansa's recent complaints that the global distribution systems lack the technology to properly display their rich content, as well as complaints about the fees they charge, were responded to circumspectly by Travelport executives who Tnooz heard from at the conference. Hyden said:
"Right at the time Lufthansa was in the news because they were adding a surcharge for third-party distribution, you may have missed that it also signed onto our rich content branded product. They still recognized the value of our distribution platform and what we've accomplished as a revenue road for them."
Hyden and other executives chose to frame the Lufthansa issue as the age-old story of suppliers in any businesses always comparing the advantages and disadvantages of third-party distribution versus direct distribution.
They argued vigorously that their portal offers everything essential that Lufthansa's own agency extranet and consumer website offer, ticking off a list of about a dozen attributes touted on a slide at the conference.
Added Hyden:
"The discussion that our GDS technology is behind their technology is something we would dispute. We don’t stand still. Our tech team now iterates rapidly on product development. We've been releasing updates every couple of months to Smartpoint, for instance."
Hyden noted that it’s not a requirement to use Smartpoint to continue to access Travelport's content. The capabilities are available via Travelport's Universal API that can supply data to agencies that have their own portals and tools.
Looking ahead
Jonathan Sutter, senior director in the Americas, said that Travelport plans to sell harder to suppliers, do pilots with online travel agencies to expand those relationships, and train up agents in its systems that make merchandizing easier and faster.
He said the company has been growing in many markets, such as Brazil, where agencies were more willing to adopt the latest graphical content desktops.
Virtual payments was another area where Travelport executives said their company was ahead of rivals. Its virtual credit cards simplify reconciliation and payments as well as avoid the credit card fees charged by international processors. Hyden noted:
"Whether it's payment suppliers, whether it's that, as an agent, you have a customer going to a hotel and you want to send a single use credit card for that specific stay and it expires after that stay, we have customers that pay for OTAs, that pay their Google AdWords campaigns to drive traffic to their websites using virtual credit card accounts via our eNett product."
Andréen added:
"ENett can help agencies find new payment mechanisms where you feel comfortable that you'll be paid your commission, something we find many agents don't always have confidence about."
Said Hyden:
"Our payment solutions are flexible and have less risk. This also means we have a revenue share opportunity with a customer. It’s available as a payment option in Smartpoint but also on its own."
Historically Travelport has struggled to make profits with a corporate booking tool. Yet last year we acquired Locomote, an Australian company, with just such a tool that has a growing customer base in that part of the world."
The company said its goal was to invest more in that tool and to bring it to the Americas.
Earlier:
Travelport’s MTT talks mobile app strategy for TMCs and itself
How airline retailing impacts agencies and TMCs