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Travelport's Agility comes at a price for agents - will they pay?

Posted on 03 Feb 2012 at 00:14 am by Yeoh Siew Hoon
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Travelport’s rollout of its Agility Product Suite, coupled with a revision of commercial terms that will essentially require travel agents to pay for terminals, is causing rumblings among agents in Asia.

(See Travelport explains its Agility scheme)

The move, made in a space where agents in Asia are used to incentives and essentially free terminals by the GDSes, is being interpreted as either brave or foolhardy. It is understood that monthly fees per terminal range from US$10 to US$35, depending on markets.

Travel agents in Hong Kong, Singapore, Malaysia and Taiwan are understood to have received notification. Travelport’s national partners in other markets have been given grace period to implement and it is understood that most are reluctant to do so, given the consequences to their business. 

“It’s a question of who blinks first,” said one industry insider who declined to be named. “And how much market share is Travelport prepared to lose?”

The programme, first rolled out in the US, has already met resistance and earlier this month, in the face of agent dissent, said it would make “limited changes” to the Agility package, according to this report in Tnooz.

Travelport’s decision to start charging for Agility is based on its belief that it now has a superior product. The move sees the rollout of its Travelport Smartpoint App and included in the package is a host of other features such as the Rooms and More accommodation tool which it says is popular among agents in Singapore and Hong Kong.

At the time of the launch, chief operating officer Kurt Ekert (left) was quoted in Tnooz as saying the move to introduce the new platform is “evolutionary not revolutionary“.

He said it would improve the agent desktop experience alongside Travelport being able to service agents in a more efficient way through further upgrades and access to technology.

“We want to help customers with what they want, how they want it, and where they want it,” he said. “It also gives customers a common platform with access to premium products.”

But the move is being seen as a huge gamble. This is a market where agents are used to being courted by the GDSes, not being invoiced by them. Even though there is technically a charge per terminal – for example, Abacus is said to charge in Singapore monthly fees of S$100 for a PC and access and S$70 for access only – most agents don’t pay those fees based on quotas which are set well within grasp of the bigger agents.

“Travel agents have to watch our bottomline and we will of course choose the solution that best meets these needs,” said Alicia Seah, spokesperson for CTC Travel, Singapore, an Abacus customer. “Our customers are also looking to us for value for money so we have to do what we have to do to deliver this.”

In Thailand, Luzi Matzig, group managing director of Asian Trails, which uses both Abacus and Amadeus terminals, said there were usually charges associated with terminals “but if we meet our quotas, we don’t get charged”.

He agreed that this happened most of the time so technically, “they are free”.

“If we had to choose between a terminal that’s 30% faster and has a price and one that is slower but free, we would of course choose the free one. Agents are Cheap Charlies,” he laughed.

Asked if he believed in the adage that “there is nothing free in life”, he said, “I agree but the reality is if you can lower your costs, especially if you have choice, then you will do it.”

There are some who say the idea behind it is fundamentally sound. GDSes have to invest in technology and come up with solutions to empower agents to compete in an increasingly competitive environment. “There should be a value to such solutions. Free means no value. If a GDS can come up with a lot of new solutions that will help agents increase productivity, then it makes sense to either charge for the terminal or make money through the increased bookings,” said an industry observer. 

What's also driving is also that airlines are increasingly looking to the GDS channel to help agents sell ancillary services and that calls for investments in new tools. 

“Perhaps Travelport was hoping that by being the first to make such a move, the other GDSes would follow,” said the industry insider. “But that hasn’t been the case – usually it's the one with the biggest market share that should take the lead.”

Said Peter Choo, managing director of Global Travel, another Abacus customer, “It will be interesting to see which travel agent (productive one) is willing to pay for the desktop. There could be an offset that you are not aware of.”

What is clear is that Abacus and Amadeus are definitely looking on with interest as to what happens over the next few months. Will agents pay up or pull the plug on Travelport?
 

Tags: Travelport , Agility , travel agents , desktops
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