Phocuswright 2022: Tech has caught up with travel's retailing aspirations, says Sabre boss

Phocuswright 2022: Tech has caught up with travel's retailing aspirations, says Sabre boss

The GDSs president Kurt Ekert predicted a ramping up of the adoption of Iata's NDC data standard as airlines and agents in the aviation sector strives to be better retailers

Technology has finally caught up with travel’s aspiration to provide a much better retailing experience for customers, Sabre’s president told Phocuswright.

Kurt Ekert told the annual conference in Phoenix, Arizona, that he expected to see a step change for Iata’s emerging standard New Distribution Capability.

“I think that technology is finally here and I think you will see NDC gain much more adoption than before,” he said.

“If you think about airlines when the economy is robust the distribution guys have their way, when it’s less robust revenue management guys have their way. We want to find a balance between those two things.

Ekert said NDC, which has been in development since 2012, has been “relatively slowly adopted” because it was originally focussed on the “physics of airline distribution”.

“If you look at industry overall, almost every retailer in every industry wants to maximise revenue margin and they want a relationship with the end consumer. That’s not unique to the travel industry.  NDC is about airlines becoming better retailers, being able to differentiate their offers. 

“A lot of airlines thought if I put content into an API interface, others use it and that’s NDC but for this to work a TMC or an OTA needs workflows that will be adopted at scale. We are solving for those.”

Ekert added he believes the sector will see a more symbiotic model emerge saying GDSs like Sabre provide very efficient cost of distribution: “I’m a great believer in this being a two-sided marketplace so that we are not just solving for one party.”

“We think what we do is very efficient and we need to make sure as they [airlines] continue to differentiate their product and offerings and become more dynamic that we enable them to do that though travel agents, through TMCs, so they can maximise their economic reward.”

Ekert said although the world economy is slowing and rising inflation will impact travel, the sector remains under-capacity while demand is “very robust” and this is what is maintaining high fares. 

He said the aviation sector remains behind 2019 levels saying “effectively the industry is still in depression”, but that there will be a continued recovery from the COVID pandemic even in a slowing economy. 

Hospitality tech is seen as a potential area for growth for Sabre, Ekert saying he is “really bullish” about the prospects that it will be a “significant contributor to our P&L going forward”.

Ekert said it plans to get more out of its “community solution” which supports hoteliers wanting to bring modern retailing techniques into their businesses. 

As president, Ekert said he works on product execution and the day-to-day running of the GDS while chief executive Sean Menke focuses on the investor community and macro-strategy.

“When I joined Sabre I had been a competitor for many years and more recently I had been a customer. It has a good place in the marketplace having assets, for example hotel IT, and hotel distribution, or the ability to drive retail solutions in airline IT and payments.

“I thought there would be a significant opportunity to up our game in terms of our value proposition. As long as we build in the capabilities we have and are willing to disrupt ourselves the opportunity is ripe for us to be more part of the eco-system going forward.”