Roll up, roll up, save your company money - complete your expenses on your mobile phone!

That's it - in one simple move the fun has been taken out of travel applications on mobile phones.

Many of you may have thought your mobile phone was a useful communication tool and, if you've got a decent one, a bit of a toy as well!

Well, slap wrists all round! Amadeus and the Association of Corporate Travel Executives have got together to conduct a survey into future mobile phone usage.

No more checking your WAYN or Facebook accounts, there are deeper, darker forces at work.

'Upwardly mobile' as the study is called informs us future use will be all about increasing our efficiency, productivity, flexibility ..... while on the move.

There's the good stuff such as checking in for your flight, reserving your hotel and using your phone as a virtual room key and then there's the dreary stuff - complete your expenses, drive up travel policy compliance and generally save your company money by improving your efficiency.

Bet you can't wait!

No need to panic yet - the study shows that while 80% of travel managers recognise the role of mobile devices in improving the travel experience very few have taken any further action.

Linda Fox, lead reporter, Travolution

All the fun of the Farecast...

The Seattle Post Intelligencer is reporting that Farecast has been sold for $75m (£38m at today’s exchange rate).

The buyer is currently not known. The report suggest Expedia as ‘one natural choice’. Expedia told the paper that it doesn’t comment on rumour and speculation, as we all know by now.

Farecast positions itself slightly differently from other travel2.0 businesses. It datamines historic pricing data from a number of partner sites to let customers know if the current price offered is likely to go up or down. Its air fare tool is well established, its hotel channel still in beta.

The business has an impressive line-up of VC backers, as reported by Travolution’s US correspondent last year.

Farecast’s model is an interesting one, and with intelligent search being such a buzzword at the moment it'll be interesting to see who has taken it over. $75m/£38m is an interesting price point – spare change for someone like Google, well within the range of someone like Amadeus, maybe a punt too far for someone like TUI Travel plc.

Martin Cowen, chief writer, Travolution

Just a few tickets left - Question Time - TONIGHT

Not everybody wants to see England cave in to France in the international football friendly this evening, so if you're London-based you might just fancy attending the third Travolution Question Time.

The venue and time:

• Soho Hotel, Richmond Mews, London W1F 0BB
• 6pm-8pm

The panel:

• Andrew Botterill, chief executive Global Travel Group
• Ed Kamm, chief operating officer Lastminute.com
• Kenny Picken, managing director Traveltek
• Peter Ward, co-founder and co-chief executive WAYN.com
• Stephane Durand, UK & Ireland managing director Amadeus

The practicalities:

Ring Angela Hamilton-Jones on 020 8652 3803 or email to obtain a ticket (just £55+VAT).

Kevin May, editor, Travolution

Future of hospitality?

Amadeus has released a 24-page white paper which modestly claims to be ‘a blue print for the future of the hospitality industry’.

[We covered a snippet of it here]

Delve into the full report and you get a breakdown of the short, medium and long-term drivers, ranked in order of importance according to its impressive ‘panel of thought leaders’.

‘New technologies’ are ranked second in all three timeframes, suggesting that this vast area will continue to dominate hoteliers’ thinking for some years to come.

Interestingly, new technologies are distinct from Web2.0, of which Amadeus says: ‘Web 2.0 is high up the agenda today but in the medium- to long-term will not be an issue. This is presumably because businesses think they will be able to adapt to its demands in the not too distant future.’

Mobile isn’t that new a technology, but it is starting to make its presence felt in travel, recovering from the debacle that was WAP. Mobile Travel Technologies’ founder and CEO Gerry Samuels recent presentation at PhoCusWright @ ITB showed how one-in-ten mobile phone owners are using their devices for travel-related services. And with more mobiles coming into use very day – particularly in emerging markets - this cannot but be a massive part of travel moving forward.

Amadeus quotes Henry Harteveldt from US research outfit Forrester. His take is that that mobile devices will have to support a number of activities in the future, including coupons or vouchers, SMS short codes for push and pull marketing campaigns, mobile search marketing, mobile advertising and proximity based marketing.

He’s been spot on before – he talked about OTAs making money from eyeballs rather than transactions at HEDNA’s 2005 conference in San Francisco. Cue today’s ‘media model’ discussions.

So where exactly is Amadeus going with mobiles? No clues in the report, other than the observation that ‘The technology platforms used by hospitality companies must support and enable all user interfaces, from phone to fax to PC to PDA to mobile.’

One final thought – in 2008, what’s a fax?

[The full report is available via a link on the press release]

Martin Cowen, chief writer, Travolution.

Quotoid #3

'Name any other industry in the world where you need a 25%
global market share in order to make a living.'

Jose Antonio Azon, president and CEO, Amadeus, on the economics of the travel technology sector.

Martin Cowen, chief writer, Travolution

PhoCusWright@ITB 08 - Tazon (almost) answers The Opodo Question

We get a question in to Jose Antonio Tazon, president and chief executive of Amadeus:

Would Amadeus consider selling Opodo for the right price? Indeed, what is Opodo worth?

Whenever the future of OTAs comes up, so does this question...

Typically, Tazon answers it, but doesn't answer it.

We have been aprroached several times.

We tell them: 'Let us work a little bit more with it and then we'll talk about selling.'

Kevin May, editor, Travolution

GDS headache for continental cousins

So, what is the motivation for Lufthansa and Swiss putting surcharges on certain fares booked by travel agents through the GDS.

• Could it be they are just flexing their muscles?
• Are they driving traffic to their own online channels, trade and consumer?
• Could it be that European airline/GDS contract negotiations are ongoing?
• Maybe it's something to do with all three.

This seems completely at odds with a deal just completed between Iberia and Amadeus which is being heralded - by Aedave, the Spanish version of ABTA, no less [you'll need to dust off your Spanish] - as a first step towards airlines doing away with surcharges for fares booked through a GDS.

More on the subject from Business Travel Europe.

Thoughts?

Linda Fox, lead reporter, Travolution

The travel conference of the year!

Big day today. We are officially launching our Travolution European Summit 2008, produced in association with PhoCusWright.

We have started assembling what we believe will be the best line-up of participants from the online travel industry you are likely to find anywhere in the UK in 2007.

Confirmed so far:

• Caroline Cartellieri, Expedia UK (managing director)
• Graham Donoghue, TUI UK (new media director)
• Steve Hafner, Kayak (chief executive)
• Adam Healy, VibeAgent (chief executive)
• Brent Hoberman, Mydeco.com (executive chairman)
• Chris Lee, Barclays Commercial Bank (head of travel sector)
• Yen Lee, Kango (president)
• James Lohan, Mr and Mrs Smith (managing director)
• Ian McCaig, Lastminute.com (chief executive)
• Chris Nixon, Travelsupermarket.com (acting managing director)
• Andrew Owen Jones, Amadeus (director, travel distribution solutions)
• Jeff Revoy, Yahoo (Europe vice president, search and social media)
• David Soskin, Cheapflights (chief executive)
• Robert Torres, Google (managing director, travel advertising and marketing– North America)
• Gareth Williams, Skyscanner (chief executive)
• Philip Wolf, PhoCusWright (president and chief executive)

More names will be added in the coming weeks.

Delegates places, more information, programme, and the rest, available from the conference website.

Kevin May, editor, Travolution

GDSs and the little guy

Guest blogger post from Colin Lewis, head of sales and marketing at Aer Arann:

The way low-cost airlines view of the GDS as a distribution method is currently changing.

Over the last year we’ve seen a number of airlines such as Jetblue, Jetstar Asia and Valuair signing distribution deals with GDSs.

The most recent sees Easyjet’s announcement a few weeks back of its new distribution deals with both Amadeus and Galileo. Whilst some airlines have slammed this decision, I think it’s important not to miss the point here.

A large percentage of business travel bookings are driven through a corporate travel agent in order that businesses can effectively track their budgets as part of a larger controlled fiscal process.

As a result, to ignore corporate travel agents as a source of new business would be a mistake for most airlines.

The bottom line is – if you want to sell to business travellers, you need to participate in GDS’s.

Most of the business is incremental – Aer Arann receives 90% of their business via direct internet bookings, and this has not changed with greater GDS participation. Business travellers are also higher yield

I can’t help but consider that the strong response elicited by other low-cost airlines may have been in a bid to achieve column inches.

It is noticeable that once low cost airlines evolve and became more sophisticated, they start distributing on the GDS to reach newer, higher yield market – and what airline does not want higher yield?

There is no doubt that the GDS and the corporate travel agent are an essential part of our distribution system, and long may that continue.

Colin Lewis, head of sales and marketing, Aer Arann

All aboard the GDS love-in - not quite

The European Commission gave the thumbs-up last week to an extraordinary deal between two of the giants of the GDS world, Amadeus and Sabre.

The pair are launching Moneydirect, a rather clever payment "solution" for travel providers and needed the EC to clear any competition issues.

There is plenty of detail to follow on this but there is one crucial question (apart from the name of the business, which sounds more akin to a financial services price comparison site):

What about Travelport (Galileo and Worldspan's parent organisation)?

Amadeus-Sabre say they want this to be the start of an industry standard solution for payments. But the other half the GDS sector feels indifferent, has ideas of its own or is biding its time to see whether Moneydirect works.

[The system has been up and running successfully in Australia and New Zealand]

During a briefing last week, Moneydirect chief operating officer Laurent Chartier (from the Amadeus camp) pointed us to some comments from Jeff Clark (Travelport), who said the project was a "good idea" and "positive for all parties".

However Chartier would not say how negotiations had gone so far with Travelport. Indeed there is a board of directors for the new company, which is staffed with Amadeus and Sabre execs.

Either way the development is a very good one for an industry, many execs behind the scenes admit, beset with old systems which are not up to the task of handling high volumes and coordintating multi-distribution platforms.

Let's just see how long it takes Worldspan-Galileo to join the club.

Kevin May, editor, Travolution

Technorati tags: worldspan moneydirect sabre amadeus galileo travelport GDS

How much for Opodo?

Ignacio Martos, in an exclusive interview with Travolution this week, set out Opodo's strategy for the next few years.

Alongside plans to launch in other markets - outside of Europe - in 2008, the refreshingly free-speaking Martos said this to a question concerning rumours about Opodo being offloaded by majority shareholder Amadeus:

"We are always up for sale."

Martos laughed when we offered him £100 million for the company.

So how much, then, realistically?

Kevin May, editor, Travolution

Technorati tags: opodo

A Good Friday to take stock of 2007

Time flies fast, the saying goes, but the first quarter of 2007 appears to have raced by quicker than you can say "Big Four into Big Three into Big Two".

Without doubt the biggest story to hit the travel industry so far this year has been the consolidation between the traditional travel providers - Thomas Cook and MyTravel shocking many people back in February when they announced their merger, followed by TUI and First Choice a few weeks back when they decided to get in on the act.

Our analysis of the TUI-First Choice deal merger provoked some strong reactions, but we stand by it all. The US players MUST be watching the situation here in Europe very closely.

The deals came shortly after we published an interview with Ian McCaig, chief executive of Lastminute.com, who spoke of a widening gap in the European industry between those that have the power to negotiate on high volume deals with suppliers and, basically, those that do not.

The smaller companies will find themselves forced into "going niche", as someone else put it to us shortly after McCaig's comments.

Meanwhile much attention - admittedly a lot from us - has been given to the British Airways content distribution negotiations with the four big GDSs.

So far Worldspan, Galileo and Sabre Travel Network have re-signed, with Amadeus remaining.

Tricia Holly Davis has been following the event closely for months, breaking a number of key developments during the negotiations, including the news that BA was playing "rack-rate" to GDSs after talks failed to bring about a solution before the original 28 February deadline.

Amazingly, while all the above events have been going on, Expedia has managed to keep itself almost out of the news entirely for almost half a year now, such has been the focus of attention on the shenenigans across the traditional market.

But the OTA suddenly finds itself in a unique position: it is one very few big travel companies, certainly in the US, not owned by private equity; and it is still the dominant player in many markets.

Rumours abound, however, Expedia will feature much more heavily in headlines in the remaining three quarters of 2007.

Kevin May, editor, Travolution

Technorati tags: expedia british airways online travel

GDS deregulation debate rears its head again

"Open Letters" always sound very dramatic - but the message in this particular letter is one that pops up from time to time and is doing the rounds elsewhere.

The European Commission is once again soliciting comments from the industry regarding deregulation of the GDSs.

The debate has not changed: one side says all airline owernship in Amadeus must be divested before full deregulation is allowed, lest the threat of biased disaplay, as indicated in the letter below.

The other side claims biased display is not a reality and cites several reasons, as outlined continuously over the year.

Anyway...

Dear editor,

The travel industry is one of continual evolution and change. Keeping up with the events that can fundamentally affect our business from day to day is a challenge. However, there is one issue that I would like to bring to your attention, as it could impact our industry and change the way many of us do business.

Recently, the European Commission (EC) began soliciting public comment on possible revisions to the Code of Conduct for Computerized Reservation Systems (CRS), also known as global distribution systems (GDS), and will accept comments through the 27th of April.

The last round of discussions and debate on the subject of CRS deregulation took place in 2004. Arguments focused on the "Brattle Report," which was commissioned by the EC from the Brattle Group in October of 2003 to provide an objective point of view on the regulatory environment around CRSs in Europe and to make concrete recommendations with regards to total or partial deregulation. (The 15-page executive summary is well worth the read.) The EC ultimately postponed decision-making. However, the current public consultation means it is again time to act.

It is not my objective to promulgate a particular point of view. I wish simply to call your attention to some of the fundamental questions that have been asked in the past and for which the EC will need to provide answers via a legislative decision that could take place later this year.

When an airline has ownership in a CRS, should this raise competitive concerns for consumers, business travelers and their companies? If the playing field in Europe risks being biased in favor of CRS-owning airlines and their distribution channels, would access to full content be impacted?

If the content in the CRSs is not available on an equal basis and is, in addition, fragmented across several distribution channels, how would this affect efficiency and the cost of distribution, as well as travel?

As a consumer and an actor in the travel industry, I would encourage you to take advantage of this unique opportunity and make your opinion known to the EC by no later than the 27 of April at one of the following addresses:

European Commission
Directorate-General for Energy and Transport
Office DM24 5/98
B-1049 Brussels, Belgium

tren-consultation-crs@ec.europa.eu

For further information on this important issue, please visit C-fare.org

Richard Lovell, chief operating officer, EMEA and Latin America, Carlson Wagonlit Travel

And that left Amadeus

Another day, another GDS signs with British Airways to renew its content distribution deal.

Looking forward to an early Easter egg is Worldspan, which became the third GDS to end what appears to have been reasonably fraught negotitations in recent months between all four leading players and the UK's flag carrier.

So just Amadeus remains without a deal, with Galileo [which, it must be remembered, could be merging with Worldspan in a few months anyway, subject to regulatory approval in the US] and Sabre Travel Network already enjoying their new relationship with BA.

So another signing before the crucial magical April 10 deadline looks a likely bet. Although there could yet be another twist to what has been a pretty captivating process so far.

Kevin May, editor, Travolution

EXCLUSIVE - Travolution to create GDS

In years to come industry commentators will remember where they were the day Travolution announced its intention to move into the GDS space by teaming up with start-up Lirpaloof.com.

So here's a bit of a heads-up...

After at least six months in the planning, under the guise of arranging the finer details of our forthcoming Awards and Summit, Travolution publishing director Simon Ferguson and I have been in top-level discussions with Lirpaloof.com to launch what we believe could be the first serious challenge to the stranglehold of the major GDSs.

Much has been made of the so-called mini or Smart-GDSs, but Travolution-Lirpaloof.com's plan, known as Project Baba, will revolutionise the process further.

The partnership will draw on the skills of both companies: Travolution will be able to work with its vast array of contacts within the airline industry to negotiate favourable distribution rates for fares.

Lirpaloof.com will use its superior technology, developed initially for the Blackberry market, to run the complex hardware and software required to take on the likes of Sabre, Amadeus, Worldspan and Galileo.

A statement to be issued tomorrow to the wires from Simon and myself will say:

"We are delighted to be working with Lirpaloof.com. Combining the power of these two very different organisations - one a cutting edge player in media, the other a market-leader in handheld technologies - will send shivers down the spines of the existing GDSs."

"We can reassure readers our position as a publisher of magazines, our blog and website for the travel trade will not compromised by this partnership. We go through phases every week when at least one of the current GDSs falls out with us, so at least this will be official."

Kevin May, editor, Travolution

Read more about Lirpaloof.com.

Some other amazing news.

It's time to move on

We at Travolution are all in favour of comments to our blog postings and though we would love to reply to all of them, there are some comments in particular which absolutely deserve editorial feedback.

Amadeus's response to Tuesday's "Two down, two to go" blog post regarding the ongoing negotiations between British Airways and the GDSs is one such example.

In its comment, Amadeus, which, like Worldspan, has yet to finalise a distribution contract with BA, observed, "The idea that we would delay discussions on any agreement in favour of a minor short-term gain is wrong. In any case, until 10 April the situation, in terms of booking fees, is the same for all GDSs".

Amadeus is, of course, correct. I don't really think the GDSs are trying to take financial advantage of BA.

Rather, the point was that BA has taken more than its fair share of punches during what has become a rather protracted negotiation process, and those who might be quick to blame BA alone for the delay should consider that there are two sides to every story.

The airline has stood its ground despite mounting pressure from the travel trade and the prospect of paying higher GDS fees while it works out the terms of its new distribution contracts.

This tactic, while initially unnerving to BA's leisure and business travel partners, is likely to result in a greater return for the airline in the long term, which can only benefit its shareholders, travel agent and GDS partners and travellers.

So, for the record, my point was that it is time to put an end to the endless finger-pointing (amusing as it may have been for a while), and to focus on other important issues at hand.

Speaking of which, Heathrow's Terminal 5, whose successful opening and operation is a critical part of BA's long-term strategy, is scheduled to open in exactly 363 days.

April 10th may very well be an important date, as Amadeus pointed out, but, in the grander scheme of things, it's the landmark date of 27 March 2008 which will really make a difference to the future of BA, its agent partners and travellers.

Let the countdown begin.

Tricia Holly Davis, chief writer, Travolution

Two down, two to go

British Airways has signed a three-year inventory distribution deal with Sabre TravelNetwork which will give the GDS's travel agent subscribers access to all of BA's fares. The inventory will be available to all Sabre connected-travel agents worldwide.

The new Sabre opt-in program guarantees travel agents in the UK and Ireland, through adjusted financial terms with Sabre, full access to the current BA content, including the complete range of published fares the airline sells through its own web site, any third-party website, and its own reservation offices.

Opt-in schemes, whereby agents pay a portion of the GDS fee in exchange for full access to content, are nothing new. The concept was madely widely known back in 2004, when BA was re-negotiating its previous GDS contracts. Sabre says this is the first time, however, that it has offered agents an "opt-in" programme.

BA reached a similar agreement with the Galileo distribution system a little more than two weeks ago, but not with its soon-to-be sister company, Worldpsan.

Amadeus, which is not typically a lagger, also has yet to secure a deal with Britain's flag carrier.

Now I'm not trying to start any rumours here or anything, but maybe, just maybe, the companies' failure thus far to reach an agreement is not actually BA's fault.

You see, since BA's previous GDS contracts expired on 28 February, the airline has been paying a handsome GDS "rack rate". Maybe the likes of Amadeus and Worldspan figure there's no harm in milking BA for a little while longer--you know, just till the end of the month.

Let's see what Friday brings....

Tricia Holly Davis, chief writer, Travolution

Rumour mill has a new spring in its step

With so much speculation doing the rounds recently about the fate of some leading online travel brands, especially concerning Travelport and its portfolio of brands, we thought it might be worthwhile listing them all:

1) Travelport’s OTA brands, Orbitz and Ebookers, will seek an IPO on either the New York or London Stock Exchanges.

2) In lieu of an IPO, Orbitz and/or Ebookers will be snapped by potential suitors Expedia Inc, Priceline, or Sabre Holdings.

3) Sabre Holdings, which has received European Commission approval to be acquired by US-based private equity firms Silver Lake Partners and Texas Pacific Group (TPG), will itself be spun-off, possibly to Amadeus (though that alliance might have a tough time getting regulatory approval).

(TPG separately owns a stake in G2SwitchWorks, which was created by a former Orbitz executive to rival the traditional GDS systems, and has co-invested in non-travel related projects with private equity firm The Blackstone Group, which has a stake in Travelport.)

4) Silver Lake Partners and TPG will keep Travelocity as their core asset and build up a complementary portfolio by acquiring other consumer-facing travel brands…possibly Expedia.

5) Google will buy everything - end of story.

But seriously, since all four GDSs and their respective subsidiaries are already loosely affiliated through mutual stakeholders, a re-shuffling of assets as enumerated above is not inconceivable.

The big question is just how much shuffling can the market and regulators bear?

Tricia Holly Davis, chief writer, Travolution

Galileo can break open the champers

BA appears to be moving towards a resolution over its stance with the GDSs.

The airline has issued a statement confirming a new content deal with Travelport-owned Galileo (but not the soon-to-be-Travelport-owned Worldspan).

The short press release says the new "long-term, global full content agreement" will run for three years from 10 April 2007.

Discussions are apparently ongoing with Worldspan, Sabre Travel Network and Amadeus.

There are perhaps a few lines in the release that hint at the issue right at heart of the discussions experienced by all parties in recent weeks:

"The new opt-in programme offers travel agents in the UK and Ireland the opportunity to access all of British Airways' fare content that is made publicly available through the airline's sales channels, including BA.com."

Ignoring the "travel agents in UK and Ireland" line - the deal is actually for agents elsewhere in the world, a BA press officer confirmed - the statement reveals BA's continued desire to push its content through an many non-GDS channels as possible.

Secondly, BA's Tiffany Hall says the agreement will "reduce the airline's distribution costs".

The airline's head of marketing and distribution sounds like she has got exactly what they wanted.

So it's champagne all-round, so far. BA gets the first of its deals; Galileo is just damn relieved to have signed.

However travel agents could be facing higher surcharges on some routes than they had under the former opt-in clause, says a source close to the new agreement.

Bets are on for which GDS signs next...

Kevin May, editor, Travolution

Travolution@ITBPhoCusWright--ITA faces round two of questioning

After surviving a barrage of intense questioning about the value of his product during yesterday’s panel, William Phillipson of Boston-based technology-provider ITA Software, took the stage this morning to face yet another tough audience.

“After listening to your presentation again it seems like your product is exactly the same as Amadeus’s, so what is the difference?” demanded fellow panel member Sigmundur Halldórsson of Icelandair, which is an Amadeus subscriber.

Phillipson, likely already expecting a repeat of yesterday’s performance, kept his cool, and responded by explaining that ITA is essentially better because it does not carry the legacy systems of the GDSs, and all that that implies, including added costs and difficulty in sharing data in a seamless manner.

Surely the GDSs, given the opportunity, would have something to say about that, but I digress.

Things started to get a bit more interesting when an audience member (ok, it was me) asked Phillipson why Air Canada—ITA’s launch airline client –was not using ITA’s software to handle the carrier’s website fulfilment.

“They will,” said Phillipson.

“So, let’s be clear,” I said. “Air Canada is going to switch its online reservations system from Amadeus to ITA?”

“That’s the plan,” said Phillipson.

But when Martin Ruschen of Lufthansa Systems jumped in and pressed Phillipson on exactly when Air Canada would do this, Phillipson backed off and said that was a question for Air Canada.

That response was obviously not enough to convince some delegates, who remain sceptical about whether Air Canada, or indeed any other airlines, will swap their present GDS platform for ITA’s software.

Guess we better ask the airlines.

Tricia Holly Davis, chief writer, Travolution