TravelMole Q&A with Sabre’s Hamish Broom

In the first of a series of regular interviews with key figures in travel technology, LINDA FOX talks to Hamish Broom, Sabre’s European director of airline, car and hotel distribution.

Q) The GDS’s claim to have reinvented themselves so how can suppliers best take advantage of what they offer?

A) We need to encourage suppliers to look at us in a new way and take advantage of the value we offer. Many do not see the changes. Suppliers have teams to negotiate with GDS, agents and online players and these teams often don’t communicate. They need to look at procurement in a holistic way. In January an airline was pushing back hard over our booking fee increases. The airline is also a customer of our airline solutions business so I suggested giving them some additional products to make savings on that side of the business. The offer was turned down because the guy negotiating did not have responsibility for that part of the business. The value of what I was offering was worth twice what he was trying to secure in fees reduction. Suppliers have got to stop thinking of us as just a distribution channel.

Q) Sabre is currently placing emphasis on solutions for the hotel sector, as reported by TravelMole – do you think hotels will go the same way as airlines in reducing commission?

A) I don’t think hotel companies will cut commission in the same way as airlines. They have a different view in how they look at rewarding agencies. They have the same distribution cost issues but manage them differently and have been quite clever in how they mange their brand profile. Hotel companies have invested huge amounts in differentiating their brands and they don’t want to throw all that away by getting everyone hooked on price.

Q) Low-cost airlines have huge orders of aircraft coming on stream – is the business in Europe sustainable?

A) The demand to fill seats is proving challenging and we have seen the low-cost airlines flying to more secondary cities in Eastern Europe. The other issue on the horizon, which will increase the pressure, is the launch of the A380. All the airlines are saying that it, in addition to expansion from operators such as Emirates, is going to alter the dynamics of the business. These are going to be huge aircraft, flying to cities that were dominated by one or two national carriers, and they have to be filled. No one is going to get a return on investment by flying empty aircraft. Over-capacity is a tremendous opportunity for Sabre to differentiate.

Q) We now see some of the GDS positioning themselves as content warehouses. How will this evolve?

A) Travel agents and travel management companies are not going to retain customers if they do not have the breadth of content so we need to offer as much as we can. That’s why these DCA airline full-content agreements are so important. What you are going to see is this cross-integration. Additional points of sale increase our value proposition but also give us the opportunity to play content from other companies we own. Companies such as lastminute.com will appear on the GDS green screen. The focus is on integration into one screen. We’re trying to eliminate the need to go into another screen.

Q) Are airlines likely to meet IATA’s end of 2007 deadline for introducing e-ticketing?

A) E-ticketing is cheaper to process and airlines want to save costs and increase efficiency. We’re already seeing the growing strength of the alliances and airlines also want inter-line e-ticketing. We think the 2007 deadline is going to be missed but it will be a near miss. Not everyone is going to be e-ticketing by then. There are lots of small carriers outside of Europe and North America who won’t make it but the cost is not as large as they expect. We have tools to help them such as our e-ticketing hub – giving airlines interlining access to all airlines which have subscribed to it. You don’t have to be hosted by Sabre to use it.