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November 15, 2001 - reprinted with permission from Travel Trade
Sabre to Launch Suite of Revenue Management Tools in 2002
By Nick Verrastror
Sabre plans to introduce a suite of revenue management products next year designed to help travel agencies maximize profitability, according to Ellen Keszler, senior vice president of travel agency solutions, North America.
With 40% of the worldwide travel agent market and a 50% share in North America, Keszler said that Sabre has a “clear history of leadership in developing a forward looking strategy and then positioning our products and services for our customers’ — that is travel agents’ — success.”
Brainstorming Session
The revenue management products are one of the results of strategic planning Sabre did a few years ago, when its top management brainstormed about how the agency market will evolve.
“We came up with five different potential scenarios,” Keszler told Travel Trade.
The first envisions the creation of travel marketing monoliths integrated across the industry with travel agencies aligning with a single mega supplier — a model that Cendant is following.
The second scenario envisions the creation of a new distribution model — a travel exchange in which the consumer goes to the exchange and products are sold on a bid/ask basis, similar to the Priceline model.
Suppliers going direct to consumers is the third scenario, which can be seen in the airlines investing millions in Web-based distribution of their products as a means of controlling their customers.
In Sabre’s fourth scenario, Keszler said, “We envisioned a significant world event leading to a significant economic downturn necessitating the need to lower costs and possibly create an entirely different distribution system.”
And, the fifth scenario envisions an equilibrium in which intermediaries leverage new technology and everyone is happy because they all benefit from lower costs, more value and better prices and services.
Keszler noted that Sabre tracks trends against its scenarios and suppliers going direct is the trend it sees the most, followed by equilibrium.
Sabre has used information from this scenario planning and tracking, along with customer feedback, to develop its newest suite of tools to be introduced next year, following up on the recently introduced Merchant Pay system, an integrated, end-to-end payment processing product designed to reduce agent processing costs by 15-20% and streamline the process.
Performance Tool
Keszler noted there will be four key components in Sabre’s revenue management suite. One will be a tool to help agents understand their performance vis a vis their peers in their markets. This is designed to help them negotiate advantageous revenue programs with suppliers.
The second component will help agencies maximize the value of their override programs, with tools to forecast when they’ll hit sales goals so that they can shift their share to secondary relationships to leverage their overrides. “This will enable agents to manage their override programs more closely,” Keszler said.
The third piece of the revenue management suite is an intelligence tool that provides agents with more information in terms of the value they are providing to their customers by, for instance, tracking the number of times they touch a PNR so that they can adjust their service fees accordingly.
The fourth revenue management product will provide agents with guidance in marking up net fares, which Sabre believes will become more predominant in the market, according to Keszler. The tool will enable an agency to look up all the fares in a city pair to help them decide the mark up on their net.
Going forward, Keszler said that agents and GDSs will focus more and more on customer relationship management in order to help agents extend their relationship with consumers through the entire “travel value chain.”
“The travel value chain is the process a client goes through from dreaming to shopping to fulfillment to the actual vacation and then feedback,” said Keszler. “Both GDS and agent have traditionally focused on the central part of that chain. However, to be successful in the long term, we need to extend our presence throughout the entire chain.”
She added Sabre is concentrating on providing new tools and technologies for travel marketing CRM and that its Virtually There Web site is its first CRM product — and a key component in CRM because it involves the agency and GDS in the entire travel chain.
The agency can adapt Virtually There and its customers can access the agency’s logo-branded version of their personalized travel itinerary — online, by PDA or by Web-enabled phone — anytime they need it.
“This helps our agencies extend their presence into the trip itself — after the res is made,” Keszler said.
