Gordon Wilson: Redefining the GDS through an Innovative, Holistic Approach

Since 2011, Gordon Wilson has been at the helm of Travelport, ushering it into an era of increased content, enhanced usability, IPO on the New York Stock Exchange, and even a redefined identity (Travelport is a Travel Commerce Platform; “GDS” is passé, haven’t you heard?). It comes as no surprise, then, that he possesses a remarkably holistic view of the travel industry and the integral role of the global distribution system. Travelport is more than a storefront for aggregated content; it’s an innovator of improved technology, an intermediary in industry partnerships, and a proponent of travel and tourism benefits.

With increased interest in payment information security and usability, one of Travelport’s latest offerings is the Conferma connection to eNett, a virtual payment solution. This new technology will begin beta testing in the U.S. this October.

“Conferma is basically a switch, if you like, which enables you to use multiple providers of Virtual Account Numbers (VANs), or one-time single-use payments from the credit card networks.” ENett, Wilson points out, is not a bank, so it isn’t constrained by the limitations that banks have. That means that clients that use Conferma will be able to issue VANs through eNett using an expanse of advantages, “including the number of currencies that eNett can issue VANs in, which is way in excess of 35, and we’re adding to them all the time.”

"Ultimately, payments are the next frontier.

Conferma also ensures reconciliation of every payment to every reservation made. “That one-to-one matching is actually a really important feature of the solution, because it enables World Travel to ensure that, for their customers, for each transaction made, they’ve got reconciled payments. That takes a lot of labor and manual effort out of it.” Users can avoid some foreign exchange costs when they book overseas. “And it also means that everyone will be less exposed to fraud, because the purpose of a single-use VAN is that it can only be used to pay a named, individual company on a particular day, in a particular currency, and it can never be used again.”

With a technology platform pioneer’s mind, Wilson illustrates what this solution could mean in the future. “Ultimately, payments are the next frontier, and will, over time, replace expense management. If you think about it, if you can govern as a company what you’re going to enable people to make payments for, and capture misuse of the company money at the point of payment, and block it at the point of payment, you can save yourself a lot of time, effort, and money fixing it at the back end, after the fact.” Wilson sees the possibilities for preventative expense management. “Now, we’re not there yet. But that’s the next frontier, and will take us a level beyond what current expense management systems can do.”

In practice, imagine not only authorizing chief travel expenses but also ancillary fees. “You can see a world clearly, where through policy and profile management and the payment system, the corporation can say, ‘Yes, I will allow people in my policy to pay for this kind of ancillary’ and allow the payment to go through. Or to say, ‘No, I won’t enable them to use this to pay for an inflight movie.’” The traveler can then use a personal credit card at the time of booking to pay for the elective ancillaries, while the corporation covers the approved ancillaries, and no administrative cost is needed to reconcile the difference on the back-end. “It’s all captured at the point of sale. It doesn’t mean the traveler can’t book something; it just means that they can’t book it and expense it.”

That argument for "Open Booking" that claims supplier-direct bookings garner better pricing? Don't entertain it.

Which brings up a current hot topic: Ancillary content distribution. Airlines, hoteliers, and even ground transportation companies are making record millions in ancillary charges. Travelport is actively engaged in tapping into that content to provide all options to customers.

That argument for “Open Booking” that claims supplier-direct bookings garner better pricing? Don’t entertain it. “I’ll tell you, there is no truth – certainly with Travelport – that there is any better content or access to content, fares, availability, or rates at hotels, through open booking than there is through the Travelport Travel Commerce Platform. As you know, we pride ourselves on having more hotel content, the full range of airline content, including all their ancillaries, their fare families, etc., all available in one integrated booking platform, which we provide to World Travel.”

That negates the need for open booking. “To give you some illustration on that, we’ve now got 116 airlines signed and 84 airlines implemented with rich content. Which means you can see everything the airline has on their website and book it through the Travelport Commerce Platform.” These are big airlines, Wilson confirms: Airlines like Delta, United, and Singapore Airlines. “There are some big names in there.” The challenge, he explains, is incorporating this content into the third-party Online Booking Tool to allow the same experience and access that you get when you call an agent. The OBTs are actively working on solutions, writing to the new sets of API connectivity of Travelport content. “And they’re all doing it, to be fair, but they have to change the way their own applications consume and show content.”

Travelport went out on a limb to get access to this content, and Wilson admits that getting the airlines on board wasn’t a breeze. “Initially, it was pretty hard. We had to do one of these leap of faith kind of things.” The first carrier they approached was Air Canada. “Back in the day, in terms of the network carriers, they started making the first moves in terms of unbundling their product, with Tango, Tango Plus, Executive, preordered meals, miles, no miles... They did that whole thing. I remember going myself to meet them. And we said, ‘Okay, we’ll do it your way. We’ll have a go at this.’” And that’s how it started. With the initial partnership with Air Canada, and the influence of the Low Cost Carriers profiting from ancillaries, the slow adoption gained momentum. Providing this additional content through the intermediary channel, like managed corporate travel, was a success. And now, Travelport’s message to airlines is: “If you haven’t got [marketed ancillary content] then you’re missing out.”

"Lufthansa's approach is somewhat crude.

And we all know the airlines are constantly reinventing ways to make money. The most notable current development has to be Lufthansa’s newly-implemented GDS fee. Wilson’s position on this fee is crystal clear.

“I don’t think that what Lufthansa is doing is the right thing. I think as an airline they will suffer, because they’re practically pricing their product higher than other vendors are.” Wilson feels the dialogue between GDSs and airlines has shifted over the years, away from simply cost and value proposition. “In the case of Lufthansa, some 70% of its revenue has been generated from the travel management company part of the market. I can tell you, in the Travelport system we generate fares for Lufthansa that are, on average, three times higher than their average network fares.” It speaks to the customer base, he says. Corporate travelers are not looking for the cheapest fare. They need the best itinerary. “So the dialogue we’re having with most of our airline customers is: how can we help them garner better revenue by selling more of their value to travelers that book through the managed channel? And I think that Lufthansa’s approach is somewhat crude.”

He continues, “And also, it’s not like they’ve got a viable alternative that a TMC can use in terms of how they process and manage that booking.” Last year, Travelport processed about 315 million net bookings, but over 900 million gross bookings. “Which means that about 60% of the bookings made in our system were cancelled.” Why? Because corporate travel is unpredictable. Meetings end early, end late, or change altogether. All of a sudden, you’re heading off to another destination instead of flying home. “Corporate travelers in particular are forever booking, cancelling, booking, cancelling, because their plans change.” The nature of corporate travel management, then, is to manage entire itineraries. “Doing that directly on Lufthansa is a) very, very laborious, and b) doesn’t help you manage the entire itinerary for the customer.” Air, hotel, car, rail, all need to be kept in sequence; if one changes, they all change. “The thing that seems to be missing here is the understanding of that fact that corporate travel is about producing the best overall itinerary for the corporate traveler, not just the individual component pieces of it. And that’s what great corporate travel management companies like World Travel deliver. And to do that, they rely on systems like ours, which deliver that integrated, holistic capability. So I don’t think what Lufthansa’s doing is going to be widely copied. And I don’t think that long term, or medium-term, even, that Lufthansa’s going to stay with that outline. But that’s their prerogative.”

"The thing that seems to be missing...is the understanding of the fact that corporate travel is about producing the best overall itinerary.

In addition to the in-depth understanding of the technology and commerce of the travel industry, Wilson also spends time promoting the economic and social benefits of travel and tourism. He’s coming up on five years as an Executive Committee member of the World Travel and Tourism Council (WTTC), and as Chairman of the Tourism for Tomorrow committee. Travel and tourism has historically had a hard time being taken seriously by governments. “And yet, the industry employs one in 11 people around the world. We deliver more GDP and employ more people than industries like the chemical and automotive industries. And yet governments are too keen and too eager to tax or otherwise inhibit travel, because they sometimes see it as an easy target.” Travel and tourism bring in money, however. So the WTTC works with governments to encourage support for the industry. They’ve worked to relax visa policies. “I’ll give the U.S. government some credit. The extra visa scheme has been great, but the best thing of all about it is now when you turn up, you can just go to one of those automated kiosks and put your passport in and put your fingerprints and answer all the questions electronically, which makes the whole process faster for everybody.” Other successes include pre-clearance visas or block visas, for example, for Chinese tourists. Britain, he laments, was, “a bit behind the ball on this, so they sort of missed out on Chinese Tourists coming to Europe. Instead they’d go to the Schengen countries and just stay there.” With time and effort, the WTTC and other organizations brought them around.

"Look at World Travel! The executive roster is predominately female. Maybe that's why they're more successful than most.

The Tourism for Tomorrow committee, meanwhile, works to support sustainable tourism and human resources. Our industry proportionately employs more young people in the under-25 category, and more women around the world. “Every government in the world is concerned about its youth unemployment, and, in some countries, the relative lack of women in senior jobs. And yet travel is a kind of role model – it can get better, of course – but is a kind of role model for female employment. Look at World Travel! The executive roster is predominately female,” he notes. “Maybe that’s why they’re more successful than most. It certainly helps!”

Every country has got some kind of tourism sector, "with the exception, maybe, of North Korea. But even that's beginning!"

Finally, Wilson mentions the Global Travel Tourism Partnership (GTTP), of which Travelport is a part with companies like Lufthansa, Enterprise Holdings, Starwood Hotels & Resorts, and others. “What we do is actually fund curriculum to go into secondary schools in a number of countries around the world, in places like China, Brazil, Russia, Eastern Europe, Jamaica, etc.” The curriculum trains students in the travel industry. Travelport contributes to the technology curriculum, in particular. The result is compound economic growth. “Kids leave school with a much more vocationally oriented educations, which means, in turn, that they’re more employable, and their [country’s] tourism sector can grow.” Every country has got some kind of tourism sector, “with the exception, maybe, of North Korea. But even that’s beginning!”

Wilson jokes that his multi-faceted knowledge of the travel industry is a symptom of being in the GDS space. “We’re like priests, you know. We talk to everybody. The airlines, the hotels, the car rental companies, the travel agents, the travel management companies… We take confession, but we don’t disclose any of it!” But it’s clear that this highly contextualized view of the travel industry, from technology and relationship through sustainability and economic support, allows a unique value proposition to Travelport clients.

Tags: airlines, Interview, Ancillary Fees, content, economy, expense management, GDS, Lufthansa, open booking, WTI

This post was written by Chesley Turner

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