on 12 October 2009
Travelport and Apple Vacations, among the largest tour operators in North America, announced today that Apple Vacations had dumped Sabre [my words] and completed the conversion to Travelport’s Worldspan, with all of its bells and whistles, including e-Pricing for low fares, Travelport Rapid Reprice for automatic ticket repricing, and XML Pro for structured data exchanges.
In the 5-year deal, Worldspan becomes Apple Vacations’ preferred GDS, and in addition to getting air, rail and hotel content, the tour operator gets the “added ability to book low-cost air content,” the companies stated.
If you read between the lines of the press release, Sabre and Apple Vacations must have had a big falling out because Jeff Mullen, Apple Vacations executive vice president, states: “We made the conversion to Travelport for many reasons but chief among these is that the Travelport team invested considerable time in analyzing our business and consulting with us beforehand and during, to ensure they understood our goals and challenges.”
In other words, take that Sabre.
And, Travelport GDS spokeswoman Jill Brenner notes that Apple Vacatiions was “blown away” by Worldspan’s capablities.
The agreement is the latest coup for Worldspan, which in June began powering air searches for MLT Vacations and the multiple brands it powers, including Worry-Free Vacations, Delta Vacations and Continental Airlines Vacations.
But, Apple Vacations’ transition to Worldspan leaves me completely underwhelmed because of the state of the tour operator industry and its technology status.
Tnooz editor Kevin May writes about the airline industry approaching the breaking point in terms of its legacy technology, but the tour operator industry globally is in similar straits.
So, here’s the deal: Worldspan has ample experience in powering online agency websites, and its fare search and Rapid Reprice capabilities, by all accounts, are state of the art.
But, when I took the Apple Vacations website out for a spin, its air-search capabilities were severely sub-standard.
And, this is not a Worldspan issue. Just try an air search on Orbitz and you will see what Worldspan’s air-search technology can do. [Actually, as Douglas Quinby points out below, the more appropriate testing ground would be Expedia.com and not Orbitz, which uses ITA Software for air searches and Worldspan for availability queries.]
So, from the homepage on the Apple Vacations website, users get the option to search for “flight only.” I did that and searched for a Jan. 5-12 round-trip flight from JFK to Acapulco. I inputted the information and it transported my query to a second page, where I had to enter some of the information again. After I did that, the response came back that there were no flights available between JFK and Acapulco Jan. 5-12, 2010.
So, I tried the same search from Newark (EWR) to Acapulco — and received the same non-results.
Then, I searched for an Acapulco vacation package from JFK and finally I got some airline options.
Well, correct that.
It gave me one flight option only, and it was on Mexicana Airlines.
OK, so this clearly is not a Worldspan issue.
Obviously, Apple Vacations, which runs its own chartered airline service through sister company USA 3000 Airlines, has preferenced the Worldspan air searches to comply with Apple Vacations’ preferred relationships and business deals.
And, where does this leave the consumer?
Why would consumers bother to search Apple Vacations, with all of its inflexibility, when they might go search for a dynamic package on Expedia or Travelocity?
In Europe, the issues between Thomas Cook and BlueSky punctuate the problems that tour operators and wholesalers have with their antiquated technology and the challenge of melding new systems with old.
Behind the scenes, perhaps Apple Vacations’ agents have deft new capabilities at their disposal using Worldspan instead of Sabre.
But, that is invisible to consumers seeking to go online and and book an Apple Vacations package.
Thus, the Apple Vacations-Worldspan agreement highlights the ongoing technology and business limitations that run roughshod through the tour operator industry, in the U.S. and globally.
After all, several weeks ago I asked the head of the U.S. Tour Operators Association what he thinks of Viator as a competitor, and he had never heard of the company.
Apple Vacations and the tour operator industry as a whole need to approach the 21st Century differently than they did the 20th Century.
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Some guess work here, but Apple Vacations’s business is most likely not online? They most likely negotiate super hard deals with suppliers and build amazing packages that most likely they sell mostly through travel agent networks. If they prebuy inventory and take risk of not selling it (which most likely they do) then they obviously do all they can to sell seats for their packages/chartered flights and nothing else.
Most likely they do not have enough budget to market a fully fledged direct OTA which would probably conflict with their existing channels.
And after all, if it works well for them, we’re all happy.
Danielle: You may be totally correct about Apple Vacations’ business being mostly off-line. I don’t know what the split is. But, in 2010, shouldn’t they have an online, business-to-consumer strategy?
Are we still so worried about channel conflict in 2010? Wasn’t that piece of the puzzle solved when Sabre launched Travelocity?
Is it a wise strategy for Apple Vacations and other tour operators to virtually ignore online bookers?
Apple Vacations’ website reminds me of companies which dabble on Twitter half-heartedly because they think they have to have a token presence.
I think that is one of the problems. Legacy thinking — and not just legacy technology — is holding these companies back.
And, from what people are telling me, the situation for tour operators and wholesalers is even more acute in Europe and other parts of the world.
Take care of your inventory risk. Yes.
But, don’t risk losing generations of consumers who book their travel in ways much different than previous generations.
Dennis,
A few things: I’m pretty sure Orbitz still uses ITA for faring and shopping, and only uses Worldspan for availability, seat maps and booking. So looking at Orbitz isn’t the right comparison. However, I do believe Expedia’s faring technology is based on Wspan’s E-Pricing (now Travelport E-Pricing).
I have no info on the reasons behind the switch, but looking to Apple’s B2C Web is probably not a fair assessment. Given they are such a strong travel agent brand, the improvements they are looking to make probably have to do process efficiency on the back of the house (providing more functionality to in-house res staff and agents via their B2B portal to reduce manual processes). I am surprised and curious, however, if Sabre was not competitive with Travelport in this arena.
Also – I can’t imagine offering a competitive B2C air shopping platform is anywhere in Apple’s strategic plans. It’s hard enough for the big OTAs to make any money on that (especially sans fees), so why would Apple bother? Their focus should be to leverage their strengths – pricing, inventory, expertise and in-destination receptive resources in their key destinations. These are same types of advantages the big tour ops have over OTAs in Europe and the U.S. (in many but not all destinations). So the focus should be targeted B2C marketing around these strengths.
And yes, channel conflict is still an issue, for tour operators and cruise lines, even in 2010…
Great points, Douglas. You are right about Orbitz and ITA. And, yes, Worldspan and Expedia jointly created the fare search tool.
My point isn’t that tour operators should try to focus on standalone air for consumers. We know that is a dead end. I was simply trying to test Apple Vacation’s application of Worldspan e-Pricing on the Apple Vacations website. Why have a consumer website at all if it is a clunker?
If targeted B to C marketing is the way to go, shouldn’t it have an online component?
Apple and Travelport make a good pair as both are once great providers now listing in a competitive marketplace.