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Future of Distribution

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Presentation on theme: "Future of Distribution"— Presentation transcript:

1 Future of Distribution
Jürgen Witte Regional Managing Director Germany & Switzerland Travelport GDS Tenerife, April 08, 2011

2 Talking about… Travelport Corporate Background Current GDS performance Future of Distribution uAPI, Universal Desktop, Caching ...your questions, ideas, remarks....

3 Travelport Corporate Background
This section focuses on Travelport GDS, our role in how the world travels and how we bring value to customers. In particular, we call out the Travelport Value Proposition and give tangible examples, through quotes, case studies and quantifiable results, to support each of the 4 pillars; Empowering businesses globally through local focus Delivering solutions our customers need Building valuable partnerships, and: Innovation

4 Facts & Figures 5.500 employees in 160 markets 600 airlines, thereof > 60 Low Cost Carrier Hotels 30 Car Rental Companies, stations > agencies worldwide

5 Global Distribution Systems: Evolution of the Big 6
1960: American Airlines founded Sabre, 1976 first travel agency terminal 1971: United Airlines founded Apollo 1971: START (LH, DB, TUI) -> Amadeus 1975: Abacus by JAL, SIA, Qantas etc. 1986: Initiation of Galileo by British Airways, KLM, Alitalia, Swissair, US Air, Austrian Airlines, Air Canada... 2007: Merger Apollo/ Galileo / Worldspan -> 2009 under Travelport GDS 2010: Initial Public Offer from Amadeus

6 How a GDS customer sees the circumstance…
1975 The first digital camera, developed by Steve Sasson, Kodak Weight: 3,5 KG Pixel: (oder 0,01 MP) Media: Cassette, Black/White, displayed via TV 6

7 Travelport ownership overview
% of Total Company Position Shares Outstanding Blackstone 818,706, Technology Crossover Ventures 132,049, One Equity Partners 132,049, Management 82,064, Travelport is a private company owned by The Blackstone Group, One Equity Partners, Technology Crossover Ventures and Travelport management. Blackstone was founded in 1985 and is a leading global alternative asset manager and provider of financial advisory services ( listed on NYSE as ‘BX’). Blackstone has total fee-earnings assets under their management of $91.0 billion (Dec ‘08) Their business is organised into four business segments: Corporate Private Equity Real Estate Marketable Alternative Asset Management (such as hedge funds) Financial Advisory Blackstone’s portfolio includes controlling stakes in, for example, Hilton Hotels, Nielsen, Universal Orlando and Center Parcs and equity stakes in Deutsche Telekom, amongst many others Source:Rochelle Jennifer Boas, Group Vice President, Legal & Corporate Secretary and Source: Travelport

8 Travelport Global Reach
#2 #2 #1 #1 or #2 in All Major Markets

9 Travel industry dynamics
End-Consumers have multiple ways of buying travel; either through agencies or direct with suppliers. Corporations also have the added benefit of utilizing self-booking tools Let’s look at how the travel industry works. On the left we see the sellers; that includes airlines, rental cars, hotels, cruise lines, and so on. Sellers are called suppliers in the industry, since they supply their inventory of available seats, rooms, and other services. On the right are the buyers; the people who are traveling. There are two types of intermediaries that connect suppliers and travelers. Supplier content is provided to the GDS. Content includes the schedules, availabilities, fares, rules for travel, etc… all the information needed to book travel. Suppliers also deal with end-consumers directly through their supplier.com sites, via metasearch engines and through corporate self-booking tools The second intermediary in the travel industry, traditionally speaking, is the travel agent. Travelers contact the agents who are able to find and book suitable travel arrangements for them. Over time, the linkage between buyer and seller has been enhanced by the advent of online travel agencies. Corporations too have set up in-house agencies to manage employee travel, often delivered by travel management companies.

10 Agency and corporate customers
60,000+ travel agencies worldwide Global Corporate Agencies Leisure & Corporate Agencies Online Travel Agencies Corporations We serve over 60,000+ travel agents across the globe who depend on us to provide travel information, booking and ticketing capabilities travel purchases and management tools for travel information and travel agency operations. Access to our GDSs enables travel agencies to electronically search travel-related data such as schedules, availability, services and prices offered by travel suppliers.

11 Airline customers 430 Airlines including over 70 low cost carriers
Over 4bn fares available 46m air searches every day Over 327m air segments annually 40% of our Top 10 customers total bookings are made outside of their country of origin – only possible because of the reach of the GDS

12 What our customers are telling us...
“We need a global reach but also support for local requirements” responsibility “We want help in reducing costs” “We need strong, robust and flexible technology” “We need to differentiate ourselves from the competition” “We need online solutions to make it easy for our customers to book travel” What our customers are telling us... Research, customer insights and requirements gathering are a major part of our development process and drive our initiatives. Your feedback is important to us to ensure that we continue to deliver products and services that keep you relevant and competitive. By capturing your perspectives at every point we touch your business, we are able to understand the whole breadth of your operational and commercial needs and typically, the messages we are getting back include the following ... “We need analytical Intelligence to maintain vision and control of our business” “We need to be able to compete using solutions that grow our business”

13 Which translate into these customer needs
SUBSCRIBERS TRAVEL SUPPLIERS Access to global & local content Competitive fares & rates Tools to save time, money and make processes more efficient Stand out in the crowd in order to get and keep customers Global reach and local expertise Technologies & services that reduce costs and generate revenue opportunities A committed partner positioned to support unique requirements Which translate into these customer needs …. From our agency subscriber customers’ perspective they need a combination of global content, to take their travellers anywhere in the world, mixed with deep local supplier content – particularly airlines and hotels. They also want the reassurance of booking at the best possible prices. As margins come increasingly under pressure, they need our expertise to increase efficiencies and reduce cost giving them more time to focus on serving their customers. And finally, they need innovative ways to differentiate themselves so as to retain and win new customers. Our supplier customers are looking for our help to give them the broadest market reach and practical local support. They are continuously seeking new ways to generate revenue and increase yield, such as merchandising to agents and consumers, whilst also making operational efficiencies. And critically, they need a partner committed to understanding their unique needs.

14 How Travelport meets these needs
TRAVEL SUPPLIERS SUBSCRIBERS VALUE Access to relevant, rich & diverse content Comprehensive low prices Convenience Reliability Flexible technology solutions Efficiency tools Control Distribution to 60,000 agents worldwide Grow revenue streams Extend brand reach Merchandising Pricing flexibility How Travelport meets these needs For our subscribers, we provide access to a wealth of value-added, aggregated travel inventory. Travelport is committed to providing the right content our customers want to buy, continually searching out new content sources to ensure that we provide both the breadth of global content and the depth of local inventory. Our customers want the most comprehensive selection of fares available together with the assurance of the lowest available prices. In the recent international study, it was shown that Travelport e-Pricing returns lowest fares most frequently, generates the greatest average savings per ticket and delivers the lowest average ticket price beating the competition hands down. Our Atlanta and Denver data centers are amongst the world’s largest non-military data facilities delivering uptime of 99.98% to ensure reliability and robustness. Travelport is a the forefront of innovative technologies, developing solution that deliver convenience and efficiency savings; no more so than our forthcoming Travelport Universal Desktop that enables customer-driven workflow Management and provides a collaborative user experience. For our suppliers, we provide them with connectivity to approx. 60,000 agents worldwide and millions of end-users via metasearch companies. But connectivity is not all we do; we provide solutions to help maximise their presence and to help them grow incremental revenue streams. Our forthcoming Travelport Retailing Solutions will allow suppliers to sell their products and services the way they sell them, enabling them to differentiate their products, and to provide them with the ability to generate highly targeted advertising and promotional offers.

15 Travelport value proposition
Empowering your business globally through local focus Delivering solutions you need Building valuable partnerships Innovation to keep you competitive What drives your success is providing travellers what they want: Informed travel choices at the right price. Our success is driven by enabling you to excel. Your needs are the reason Travelport exists and why we must continue to lead the industry – together. Our unique proposition to you is based on 4 key tenants that we consistently hear from our customers, as the key ingredients for our joint success: 1. Leveraging our global reach to provide extraordinary value at the local market level. 2. Responding to your needs by to providing customer-centric solutions that lower your costs whilst enhancing your business efficiencies and increasing your revenues 3. Travelport’s success as a business partner and technology innovator is founded on how we regard our customers – as true partners 4. From our earliest times, Travelport is an enduring innovator and no organisation is more experienced, capable or flexible in providing technologies to keep to relevant and competitive

16 Empowering your business globally through local focus
Our global reach Travelport has the size, scale and scope to shop, price, book and aggregate content from multiple suppliers on behalf of multiple travel agencies on behalf of millions of travellers in one place, seamlessly Multiple Suppliers Size & Scale Multiple Agencies & Travellers 600 airlines Over 87,000 hotel properties 30 car rental companies Over 400 cruise and tour operators 13 major rail networks 5,700 employees worldwide Over 4bn stored fares 65 mm daily searches for pricing and availability Dynamic connection build 1 billion messages per day 160 countries Real time booking Comprehensive low fares and rates Travel intelligence services Mission critical IT services and software 60,000+ travel agencies Travel management companies Corporations Tour Operators Metasearch Global Reach The GDS remains the largest conduit for travel distribution and transaction processing worldwide. Whilst the industry becomes more populated with niche and fragmented sources of content, Travelport ensures buyers in every market have reliable, aggregated content through our GDSs and the major travel Web sites we support. As a result, we process more than 1 billion unique travel-related messages daily for customers around the world. We respond in real time to 65 million daily searches for pricing and availability on flights, hotels and car rentals alone. Our core systems scalability and reliability deliver 99.9 percent uptime so that we don’t let our customers down. More than 5,700 employees worldwide who are proactive in answering local market needs 60,000+ travel agency subscribers 425 airlines >87,000 hotel properties from 280 chains 25 car rental companies All major domestic and international rail networks 400+ cruise and tour operators 7,500 tourist attractions 29 languages Local market currencies Source: 10-K

17 Empowering your business globally through local focus
Our local focus Our local account, development and technical teams are positioned close to our customers to support local needs. Areas we invest in locally Account management Product management Helpdesk support – including ASK Travelport Partner marketing with our customers Local technology partnerships Training Localised product & marketing material More than 40 local websites Business conducted in 29 languages To keep your business on track you need a partner that can support you with whatever your issue at whatever the time of day. At Travelport we take customer support seriously. Our vision is to deliver the most efficient, effective, and innovative support solutions enabling Travelport and Travelport customers to reach and surpass their goals We get closer to our customers at a local market level by facilitating a more nimble and flexible approach to customer needs and solutions by investing in experienced and knowledgeable account managers and investing in local product management. We have 25 Helpdesk centres around the globe with over 348 service agents in our first-level Helpdesk support handling more than 900,000 calls every year. If the issue cannot be resolved at this level it is then passed on to our regional Global Service Operations team. This team ‘follows the sun’ ensuring coverage and support wherever you are, whatever time of day. We also are committed to deliver comprehensive online help resources to all customers. ASK Travelport, available in 8 languages (and more to come) now has over 56,000 registered users and since its inception we have received over 1,785,000 enquiries.

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19 Solutions that save cost – Travelport Rapid RepriceTM
Delivering the solutions you need Solutions that save cost – Travelport Rapid RepriceTM Travelport Rapid RepriceTM - The industry’s first and most sophisticated automated re-pricing tool Reprices fare in less than 1 minute Quickly and accurately calculates a new fare reflecting appropriate fare rules, taxes, and other fees in any currency . And by completely automating the ticket exchange and re-price process online, increases customer satisfaction. Travelport Rapid RepriceTM – The first fully automated solution for re-pricing and re-issuing airline tickets when passenger itineraries change Travelport Rapid RepriceTM was built in conjunction with a major airline customer and is the industry’s first and most sophisticated automated re-pricing tool. Key benefits: Increased customer satisfaction by offering online itinerary change option Quickly and accurately calculates a new fare reflecting appropriate fare rules, taxes, and other fees in any currency - New accurate price in less than 1 minute Automates the ticket exchange and re-price process online Every fully auto-priced itinerary is price guaranteed Lowers airline operational costs per re-booking “Our strategy to deploy efficient technologies made Rapid Reprice a good fit for United Airlines. The product has provided financial and operational benefits while improving the overall service we deliver to our customers. We are very pleased with this innovative solution.” United Airlines

20 Innovation - Unprecedented low-fare pricing options worldwide
Innovation to keep you competitive Innovation - Unprecedented low-fare pricing options worldwide Average savings of $ per ticket , or % over the competition According to the latest International study (Dec 2008), Travelport e-PricingTM: Returns lowest fares most frequently Found lower fares most often Generates the greatest average savings per ticket Delivers the lowest average ticket price “We are able to search for a wider selection of low-fare options and flight combinations in seconds, allowing us to maintain a high level of competitiveness in the market.“ Antonella Marchesi, Site Manager Easy Market S.pA, part of TUI Travel Italy e-Pricing shops across published and negotiated fares, and has the capacity to present from 25 up to 350 of the best available options in one integrated display. • You have the flexibility to shop for low fares prior to booking an itinerary-or for an itinerary that is already booked. • Flex Shopping Options, a subset of e-Pricing, satisfies the demand for low prices by finding even lower fares based on alternative travel dates and airport locations. E-Pricing outperforms competition in latest International study Topaz International, the world leader in airfare auditing, conducted the annual international low-fare benchmark study in December 2008, and Travelport e-Pricing took the study by storm. Travelport returns lowest fares most frequently: e-Pricing found lower fares 297 times e-Pricing finds the lowest fares 59.4% of time e-Pricing returned the lowest average fare at $644.05 Travelport found lower fares most often: Travelport e-Pricing % Sabre Bargain Finder % ITA QPX % Amadeus Value Pricer % e-Pricing generates the greatest average savings per ticket: With Travelport e-Pricing, subscribers can save an average of $68.13 per ticket or 9.4 % over the competition Lowest average ticket price: Travelport e-Pricing - $644.05 Sabre Bargain Finder - $688.05 ITA QPX - $692.93 Amadeus Value Pricer - $755.56

21 Delivering high return for today’s airlines
Achieving competitive advantage through innovative technology Selected Customers Protect mission critical operations Cost-efficient hosting utilising common architecture infrastructure Capture lost revenue Solutions to improve profitability and maintain revenue integrity A suite of messaging hubs allowing easy connection to partners Connectivity to the world Hosting: airline community model - Lower cost by utilizing common architecture infrastructure, Cooperation within the hosting community lowers development, maintenance, support and production costs Leverages common booking tools – Shop, Price, Book, re-price, Ticket Faster communication between GDS and Airline, as they are co-located 263 MM passengers boarded annually Internal reservation system services Flight operations technology services Software development and technology services Primary hosting customers: Delta/Northwest and United Airlines Other hosted carriers include Icaro SA, Daallo, Surinam Airways, Air Turks and Caicos Fare VerifiedTM: Pre-ticketing audit tool, eliminating under priced tickets and reducing fraud Rapid RepriceTM: Automated ticket re-issue tool, eliminates manual processes Interchange Suite: suite of messaging hubs that allows for quick and easy connection to airline partners and provides a rapid deployment methodology Reservation Sales Solution (RSS) - Single link to Travelport GDS with access to over 450 airlines, 265 hotels and 26 car companies Electronic Miscellaneous Documents (EMDs) - Utilizing ATPCO Optional Service fees, document and track charges not provided for on a passenger ticket (e.g. residual value, miscellaneous charges, excess baggage), in development Electronic Credit Vouchers (ECVs) - Create, store and redeem electronic credit vouchers for Travel Credit Vouchers, Reference Documents, MCOs or Gift Certificates, future Hosting: Benefits of hosting in the airline community model - Lower cost by utilizing common architecture infrastructure, Business insights and innovative solutions to grow your business Expand revenue opportunities

22 Airline hosting World class data centres operating at the highest industry standards and compliance requirements “Travelport knows what it takes to support mission critical infrastructure to a global business. Combine that with strong operational staff and you have a recipe for success. Travelport is more of a partner than a vendor.”  Douglas Register, Vice President Service Management & Engineering Information Services Division Tony Thierjung Director of Operations Management United Airlines Two out of the three largest U.S. airlines are clients Secure, infrastructure –independent site in Atlanta Provides significant cost savings allowing clients to focus on their core business Unprecedented 10+ year track record of zero data center downtime Latest airline hosting technologies Customisable solutions for managing fares, pricing, e-ticketing airline partner connectivity and revenue integrity Faster, more flexible reservations and passenger management Seamless functionalities for PNR creation Most cost-efficient fares, pricing, e-ticketing and data support 99.9 percent core system uptime over the past five years, based on both scheduled and unscheduled outages 263 MM passengers boarded annually Internal reservation system services Flight operations technology services Software development and technology services Primary hosting customers: Delta/Northwest and United Airlines Other hosted carriers include Icaro SA, Daallo, Surinam Airways, Air Turks and Caicos

23 IT solutions Capture Lost Revenue Expand Revenue Opportunities
Fare Verified: Pre-ticketing audit tool, eliminating under priced tickets and reducing fraud Rapid Reprice: Automated ticket re-issue tool, eliminates manual processes Expand Revenue Opportunities Reservation Sales Solution (RSS) - Single link to Travelport GDS with access to over airlines, 280 hotel chains and 25 car companies Electronic Miscellaneous Documents (EMDs) - Utilizing ATPCO Optional Service fees, document and track charges not provided for on a passenger ticket (e.g. residual value, miscellaneous charges, excess baggage), in development Electronic Credit Vouchers (ECVs) - Create, store and redeem electronic credit vouchers for Travel Credit Vouchers, Reference Documents, MCOs or Gift Certificates Connectivity to the Rest of the World Interchange Suite: suite of messaging hubs that allows for quick and easy connection to airline partners and provides a rapid deployment methodology Fares, shopping and pricing Electronic ticketing (over 5,000 IET relationships ) Automated itinerary repricing Real time fare auditing Customers include Mexicana, GOL, Lufthansa Systems, COPA, Alma de Mexico, Air India, Air New Zealand, Alitalia, Brussels, KLM, Emirates, Navitaire, Saudi Arabian Airlines, SITA, Swiss, TAP Portugal and TravelSky

24 Competitive industry insights and analysis
Providing affordable industry intelligence for smarter, more profitable business decisions Customer necessities: Travelport expertise: Custom Solutions for: Market, network & sales planning Airline Business Performance Insights to Market Opportunities Scheduling Travelport AcuityTM Travelport DiscoverTM Competitive insight Cost management Identification of new opportunites Market strategy development Market share growth Increased revenue Industry knowledge GDS booking & share data Data expertise Analytical experience Solutions to reduce costs Ability to merge multiple data sources Business Intelligence Provides custimized data analytics to airlines, hotels, car rentals, and travel bureaus Acuity : Industry’s first single, multi-dimensional application to analyse multiple sources of business intelligence data Designed to easily and efficiently capture a comprehensive view of airline business performance Provides relevant analysis for each airline functional area or department: Sales and Marketing, Network Planning, Distribution, Revenue Management and Pricing Acuity’s Value Better understanding of market dynamics More informed decisions throughout the organization as well as individual departments Enhanced sales performance monitoring against a range of goals / benchmarks More effective channel, distribution, and point of sale management Greater insight into new market / market expansion / code share opportunities Flexibility to add other data sources and perspectives as business intelligence needs evolve Discover - Global network analysis tool Models the impact of changes to any airline’s network on passenger volumes, shares, revenues and profitability Strategic / Tactical Network Planning - Scenario / Schedule Analysis - Traffic Flow Segment Contribution Analysis - Code Share Strategy Development - Competitor / Schedule Impact Analysis Network and Route Profitability Analysis PC-based application Discover Value to Airlines More informed scheduling decisions Direct focus to initiatives with most impact Improved network profitability In-depth analysis at an affordable price

25 The Future of Distribution

26 The future: Innovation and Changes
Integrating into the customer, not vice versa!

27 Universal API (uAPI)

28 Travelport Universal API – Architecture
“...access to a centralized selling & service platform.” OTA’s & Travel Agents Software developer & Supplier Corporate & Multi National Standalone API Offering Universal Desktop Traversa ViewTrip Travelport POS Engine Universal API Supports individual GDS functions as structured messages Supports wrapped processes (similar to Encapsulated Business Logic modules on GWS) Multi GDS AIR CAR HTL Bottom Layer – changing our architecture to adress current content demand. Not just merging our GDS together, but expanding our contend breadth and depth outwards. HUB concept implemented to manage non GDS content and specific requirements of that content. GDS structures mainly built to manage international air carrier content, even existing hotel and car content difficult to process with the GDS structures. HUB built for each unique content vertical such as rail or non-gds air. HUB connects but also normalizes that content before passing upward to uAPI for aggregation. Middle Layer UAPI is aggregation layer but also built in business logic layer, similar to the approach taken with EBLs on GWS (Encapsulated Business Logic on Galileo Web Services). Top Layer uAPI is not only the new and flagship stand alone API offering from Travelport but truly the “engine” behind all of our future points of sale. The importance of the uAPI to Travelport is obviously of high importance. Our customers will benefit from the high focus on innovation within the uAPI. Rail Content Hub Air Content Hub Merchandising Hub Universal Record & Profile New content Planned development Future 28

29 Universal Desktop

30 30 30

31 Travelport Company Confidential
31

32 32

33 Dashboard/ Activity Panel
Search Reports Data Tracking InBox Activity Panel Links Messenger Contacts Travelport Company Confidential 33

34 Booking GUI & Workflow (Runways) (Optional Services)
Merchandising (Optional Services) Profiles (Traveler Profile) Policy (Air Policy) Direct Connect GDS Air Travelport Company Confidential 34

35 Terminal Galileo Worldspan Apollo Sabre Amadeus (WIP) Terminal Entry
Travelport Company Confidential 35

36 Flightplayer (T‘Cache)

37 Travelport GDS Galileo T´Cache Published Fares
Travelport FlightPlayer - T´Cache “Published Fares” Overall Work-Flow: Fulfillment Booking via GWS / uAPI Request via HUB Loading Travelport GDS Galileo Travelport GDS Galileo TO 1 Fulfillment PCC TO1F TO 1 Booking Front End PCC TO1B TO 1 Peakwork HUB/Dyna Player PSE Flight Player Travelport Flight Player Centralised TO 2 Fulfillment PCC TO2F TO 2 Booking Front End PCC TO2B TO2 Peakwork HUB/Dyna Player T´Cache Published Fares Market Specific T´Cache Generator PCC TPTC TO 3 Fullfillment PCC TO3F TO 3 Booking Front End PCC TO3B TO3 Peakwork HUB/Dyna Player Tour Operator Travelport Tour Operator Travelport Arrow colour legend: fulfillment transaction booking transaction Peakwork transactions content loading transaction

38 Travelport GDS Galileo Flight Player TO 1 Specific
Travelport FlightPlayer - T´Cache “Private Fares” Overall Work-Flow: Fulfillment Booking via GWS / uAPI Request via HUB Loading Travelport GDS Galileo Travelport GDS Galileo TO 1 Fulfillment PCC TO1F TO 1 Booking Front End PCC TO1B TO 1 Peakwork HUB/Dyna Player PSE Flight Player Travelport Flight Player TO 1 Specific TO 2 Fulfillment PCC TO2F TO 2 Booking Front End PCC TO2B TO2 Peakwork HUB/Dyna Player T´Cache PrivateFares TO Specific T´Cache Generator PCC TO1PF TO 3 Fullfillment PCC TO3F TO 3 Booking Front End PCC TO3B TO3 Peakwork HUB/Dyna Player Tour Operator Travelport Tour Operator Travelport Arrow colour legend: fulfillment transaction booking transaction Peakwork transactions content loading transaction

39 Travelport FlightPlayer - T´Cache “Published and Private Fares”
TO 1 Peakwork Hub TO 2 Peakwork Hub T´Cache PrivateFares TO 1 Specific PSE Flight Player PCC TO1PF Travelport Flight Player TO 1 Specific T´Cache Published Fares Market Specific PSE Flight Player PCC TPTC Travelport Flight Player Centralised T´Cache PrivateFares TO 2 Specific PSE Flight Player PCC TO2PF Travelport Flight Player TO 2 Specific Though this setup can handle PrivateFares it mutliplicates the requests by factor x for each city pair! The more TOs having Private Fares the more extensive and expensive the data load is. T´Cache Generator Loading Travelport GDS Galileo

40 Integration 40


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