Internet threatens future of travel operators

The Internet is posing a serious threat to the future of travel operators, according to Corkman, Mr Niall Hickey, founder of a multimillion-pound international travel company.

Mr Hickey's company, Travelforce, had a £22 million turnover last year. He believes the adoption of new technologies is central to the survival of travel operators in an environment where customers will be able to book their airline tickets direct via the Internet.

Mr Hickey, from Charleville, Co Cork, founded Travelforce, a corporate travel management company, 11 years ago. It has five outlets in Britain where it ranks as the 18th biggest operator and one in New York.

It has opened a Dublin office where it claims to offer one of the most sophisticated travel systems ever available here.

Mr Hickey admits his company's connection with technology came about more by accident than by design. While working with British Airways in the US, he learned about the Sabre global distribution system (GDS) a realtime database providing booking services to the travel industry. Sabre is just one of many GDSs but it was US-based and Mr Hickey was impressed with its capability.

When he returned to London, and decided to set up his own travel business, he contacted Sabre to see if he could get access to the system.

Sabre agreed on condition that Travelforce would act as its first test site in Europe.

Now Travelforce targets large companies, with annual air travel spends of at least £500,000 a year. It provides end-to-end travel solutions and charges its larger clients by refunding them the total airline commission generally about 9 per cent after deducting administration and consultancy costs. At present this means the customer receives a cheque occasionally from Travelforce, but as airline commissions fall worldwide, the customer will eventually pay the difference to cover Travelforce's charges.

In the short term, Travelforce builds up a strong client base with high annual travel spends.

Sabre was originally developed by American Airlines in the 1960s and has the advantage of being non-biased, unlike European GDSs which quote the flight availability of their owner airlines first. With a database of millions of airfares, Sabre guarantees the lowest quotation for each journey, and also has the largest hotel room database in the world.

One of Sabre's latest innovations is the Satellite Ticket Printer (STP) system, which enables clients to print out their airline tickets in their own offices. By means of a modem connection, the special on-site printer is ready to print off tickets once they have been booked and cleared by Travelforce.

Once a ticket has been printed, it is subject to last minute cancellation penalties. But with STP, clients need not print the ticket until closer to the flight time thereby reducing the potential for fines.

"The most significant advantage to us is that we have no limit to our market place. We no longer need to open offices in regional centres to handle our business, and can target areas like Shannon, Kerry or Cork from Dublin," says Mr Hickey.

Other services include Travelplanner, which automatically faxes hard copy flight and fare options direct from the central reservation system to the client's desktop. This is useful when complicated routes are being chosen, or clients are working to a tight schedule. They can receive a choice of 36 flight and fare combinations, listing carriers and times, including flight duration, aircraft and meals. "Most mistakes in the travel industry are made through human error, but there is no loyalty in this business the technology is there to eliminate mistakes that can be made because the consequences are immense for us," says Mr Hickey.

Travelforce will face up to the challenge posed by the Internet when it launches its Web site this February. Travelforce-On-Line plans to offer a real-time booking facility to clients. The site will be password protected for authorised users only, providing airline schedules, prices, seat availability, hotel and car hire information. Users can select their own flight path and schedule and immediately queue it on the Travelforce system, indicating when they want the tickets issued.

Soon everything available on the central Sabre database will be available to the corporate client. So is Travelforce's role and that of other travel operators defunct if the information can be provided anyway?

"Not necessarily, though traditional high street travel agents will definitely go to the wall because they are commission-based," says Mr Hickey. "Our plan is to make the business fee-based, acting as a travel management company for large businesses. If we can't sell that idea, then it's back-toCharleville time for me."