New Distribution Tools Key to Industry’s Post-COVID Recovery, Officials Say

While the coronavirus crisis has devastated the travel industry, it’s spurring innovations in technology that will be critical to a recovery, said Sean Menke, CEO of Sabre, the giant GDS and technology company.

“We’re in a landscape that is changing, and to move forward, you have to have the best technology out there,” he said recently at the annual Phocuswright travel technology conference. The event, which typically draws thousands of travel industry participants, was held virtually this year.

Menke said he envisions the industry moving faster to adopt “modern-day retailing strategies that you often see in other sectors” but which airlines and other travel sectors have been to slow to embrace, like dynamic pricing.

To advance that goal, Sabre has partnered with Google, and last month began rolling out a slew of new products driven by artificial intelligence technology.  The first product will be the Sabre Smart Retail Engine, set to launch in early 2021.  It will be supported by its Sabre Travel AI technology – which melds the GDS’s vast store of travel knowledge with Google Cloud’s infrastructure, AI and machine-learning capabilities.  

The idea is that this will enable users to tailor a personalized offer to their clients in less time, thus improving productivity.  “It’s more based on what consumers are looking for versus how it is bundled today,” Menke said.   However, the partnership has also raised some eyebrows, given Google’s vast market power and the fact that it also has its own travel interests.

And any tangible results from these moves depends on when travel bounces back, Menke conceded.  While the imminent arrival of COVID vaccines is expected to boost travel demand,  Menke said the economic damage to the industry is so deep that “we haven’t seen the full impact of it.”  Instead, he said, “we’re focused on 2022” as the turnaround year, warning that “there could be some failures in the industry” before then.

Other speakers at the conference weighed in on the pace of change in airline distribution, and the impact of the current crisis on innovation in this side of the industry. Among other trends, leisure travel is expected to provide the bulk of the airlines bookings in the near term, while business travel is flatlining due to corporate belt-tightening and the rise of digital meeting platforms like Zoom.

Discretionary travelers will likely respond more to the types of tailored products that are in the pipeline, said Alison Taylor, chief customer officer at American Airlines.  At a panel discussion on the pandemic’s impact on distribution technologies, she noted that carriers are adopting the tools to make it easier to offer customized fare packages through direct channels to third parties.  “We’re piloting these bundles now, and it’s not just a ‘seat and a bag’,” she said. “We’re including things like Admirals Club access, and that works very nicely for the people who are starting to travel again.”

Sabre’s Menke also alluded to the role of the GDSs in ensuring travel suppliers, as well as agencies, can deliver on their promises to customers.

“When you show up at the airport and you have a bundled fare, you have an expectation that you will get those services,” he said. 

“We essentially touch every part of your journey.”