The COVID pandemic has accelerated efforts to end traditional travel technologies and this is expected to usher in a golden age of travel retail.
Mike Reyes, vice president of platform product management at Sabre, predicts that one of the consequences of the pandemic will be that travel companies will adopt technology to become better digital retailers.
And he says this is what underpinned Saber’s exclusive partnership with search giant Google agreed before the pandemic and its focus as the crisis fades and travel looks to the future.
“We had to make a decision at Saber,” Reyes said, “do we cut back or look forward to see what the ride is going to look like after this and what we want to be.
“And we made the decision to do a little transformation to help our customers be better retailers.
“With everyone sitting at home and no one flying, the pandemic encouraged us to say what we think airlines will look for.”
Reyes spoke with Travolution at the recent T2RL ‘Engage’ airline conference in London, where he gave a speech on Saber’s vision of a digital retail revolution in travel.
He said that with historical airline data rendered worthless by the pandemic, the focus should be on accelerating the use of artificial intelligence to be more in tune with customer needs.
Saber decided before COVID to end its multi-source technology strategy and work exclusively at Google as it retires its own legacy mainframe systems and moves to the cloud.
Reyes said he chose Google as much as Google chose Saber because, despite its own in-house travel IT expertise, the search giant needed a travel partner with a shared vision.
“We started thinking about what it means when we’re completely off the mainframe. What it was about was whether we could have a shared vision of a technology partner, not just a technology provider.
“They [Google] they were trying to increase their market share. But they see it in terms of how many companies in the next few years are going to go through a transformation, moving out of legacy technology and into the cloud.
“The cake is going to be several times bigger than it is today. They chose to say that they want strategic partners in a host of verticals, including travel, that they can invest in. For us, Google was clearly best in class.”
Although Saber and Google are technically competitors (ITA software, which the search giant acquired for $700 million in 2011, is still behind its Flights product), travel retail remains a small part of your overall business.
It was Google’s experience in developing and building online marketplaces that brought buyers and suppliers together that got Saber interested.
Reyes said that as the world of digital retail evolves from more traditional “rules-based” advertising to machine learning, personalization and customer segmentation, the Saber Google partnership will provide cloud-native tools for travel.
This new world is challenging the old models, and specifically the aviation sector, and the future as New Distribution Capability (NDC) is implemented is emerging, but remains to be seen.
“Change is not comfortable in any industry,” Reyes said. “We want to get to a position where business considerations are less critical. No one has really figured out what the new business model will look like.
“What we decided was that it will play out the way it will play out. It is not so much about pushing one model over another, but about creating value for the customer. If you do that, the commercials will fix themselves.”
Reyes said NDC will make the distinction between direct and indirect more “fuzzy” in travel as barriers to entry are lowered and airline providers take more “control of the conversation” with the end consumer.
“NDC is not the beginning and end of everything. For us it is more valuable to have the technology to connect buyers and suppliers. Airlines, hotels and car rental companies will become more like OTAs. Consumers come in all shapes and sizes, it’s about understanding the context.
“We don’t want to forecast how it’s going to change. What we decided was that it’s better to be in the room and try to connect buyers and suppliers and create that value in the pipelines along the way.
“If we enable better conversations, whether it’s on airline.com, an OTA or an online booking tool, we’re creating value for our partners, helping them sell more ancillary services and find new customers. Do that, and parity and full content agreements will take care of themselves.
“It’s interesting to see how Google approaches this because they run a massive market for buyers and suppliers. They are not as burdened as some people in the travel industry with long-term contracts, guarantees, and minimal goals.
“We are still competing with Google Flights in some aspects, but that is a very small part of their business. It’s about being very collaborative, about how we can quickly keep track of things in the cloud.
“Talk to any airline, they are not interested in another PSS. What they are talking about is the path to eventually ending their traditional PSS, where booking, marketing, and inventory management registration are all from a single vendor, of which we are one.
“COVID has accelerated that will to be different, to stand out, which we have been talking about for five years. Our strategy is not to try to build a single provider PSS, it is to talk about markets and retail and allow airlines to become the Amazon of travel.”
Talk of the ‘Amazon of travel’ is a sound bite so overused it almost makes no sense, so much so that Reyes almost apologizes every time he refers to the global online retail giant to explain his vision of the future.
But he says the evolution of air ticket retailing that is happening, away from legacy PNRs to Iata’s bid-and-order view, mirrors how Amazon has gone from being a specialist in online book sales.
“When they started selling books, the structure was quite simple; you had the author, the subject and the title. That’s like the PNR. As Amazon expanded away from just selling books, if everything had to fit into the same transactional model, they wouldn’t have lasted long.
“Today, airlines want to sell a much broader range of products than just the fare, such as seat selection, early boarding and other third-party content that is complementary to travel, and legacy technology is trying to fit all of these things into the same package. structure.
“The industry and existing technology has enabled airlines to sell ancillary products quite well, but they are expanding beyond just getting on the plane, and if they want to sell more third-party content, the technology footprint has to expand beyond check-in. transitional transactions.
Reyes said that, with companies like Finnair and Lufthansa publicly declaring their timelines for shutting down legacy technology, new-age, flexible, modular systems are on track to drive a “golden age” of travel retail from of 2030.
“Our goal is that if you want to start traveling by starting your own airline or building the next big OTA, you don’t have to become an expert in all these traditional travel-focused technologies to beat the bar.
“We’ve taken a long time to think about what we want to be, not in 2022 or 2025, but in 2030 and beyond, and how do we start making those investments now, without trying to hold on to any particular commercial. model.
“I don’t think there’s anything wrong with such long time scales. It may seem like a long time to go, but it’s not that long given the complexity behind the scenes. I compare it to a journey without a destination, it’s like painting the Golden Gate Bridge.
“We are confident that we are very well positioned for this next round of transformation. Our conversations with Google have shown us that you are only as good as your architecture. We are pretty confident that we are ready for the foreseeable future.
“The 2030s are going to be a golden age for travel retail. The question is how fast are you prepared to move.”