FREE ESSAY ON SABRE

SABRE

Sabre is a complex company that is difficult to fit into a specific industry. Although
they were once a division of American Airlines, and remain closely tied to the airline
industry, they are not direct competitors of other airline companies. Sabre has several
business lines, therefore determining true competitors change with each business unit.
Because the core competency is its computer reservation system, the competitive focus
will be on other computer reservation system's companies. Currently Sabre is the market
leader. Amadeus Global Travel Distribution, Galileo International, and Worldspan GDS are
the other leaders in the CRS industry.
Amadeus is a GDS and technology provider base out of Spain, and traded on Madrid Stock
Exchange. They serve the marketing, sales, and distribution needs of the international
travel and tourism industries. The data network and database is comprehensive and is the
largest in Europe. The Amadeus system provides access to hotels, rental cars, airlines,
ferry, rail, insurance and tour operators through 50,000 travel agency location and
8,2000 airline sales office.
A key development at Amadeus is the agreement with priceline.com and acquisition of
vacation.com. Amadeus Global Travel Distribution System will be connected to
NameYourOwnPrice Services of Priceline.com. Acquiring vacation.com gives the strong
European company a foothold in the highly sought after U.S. market. Vacation.com is North
American's leading vacation selling network. One third of U.S. leisure travel are
vacation.com products. Through this strategy Amadeus gains the agency only extranet that
provides members news, preferred supplier information, and marketing material. 
The dot.com strategies fives the company an opportunity to develop an on-line strategy to
compete with Sabre's highly successful on-line website Travelocity.com. Amadeus has
introduced an interface that maps Amadeus products into an Internet presentation. This
technology allows interfacing with the GDS to be supported through a variety of
communication types. Although Amadeus is determining the role of the Internet on its
business, they are not moving away from their commitment to the travel agency model. They
are quick to point out that a relatively small percentage of travel is booked over the
Internet. With only 3% of all travel transaction booked on-line, Amadeus believes that
the future of travel remains with travel agencies.
Galileo holds 10% of the market share of GDS. Galileo data center gives travel agencies,
corporate travel managers, and Internet users the ability to book travel by accessing
schedule, availability, and pricing information from its state-of-the-art data center,
housed in Rosemont, Illinois. Trip.com is Galileo's Internet initiative that allows
mobile business professionals to access their premier one-stop technology solutions in
addition to travel services. They also provide advances telecommunication services for
customers in the travel industry as well as a variety of other non-travel related
industries.
Currently Galileo is considering what direction to take the company. On October 30, 2000,
they announced they are looking at strategic options including the possibility of a sale
to a strategic buyer of leveraged buyout. In recent months Galileo's stock performance
has been poor because of concerns of the role of the Internet on its business. Their
Internet strategy was hurt when one of its key clients, preview.com was purchased by
travelocity.com, a Sabre company, over a year ago. TravelGalileo.com was presented to the
travel agency community to overwhelming interest at the American Society of Travel Agents
Congress. They have now registered over 400 new agencies on its sites, with more
expected. Galileo has traditional used the travel agency channel and understands that the
Internet is the channel with the greatest opportunity for growth. Through trip.com and
travelgalileo.com, Galileo believes they will be able to improve their position in the
Internet channel.
Worldspan is the youngest of Sabre's competitors. Worldspan was founded in February 1990
through an agreement between Delta Airlines, Northwest Airlines, and Trans World Airline
to combine and integrate three different internal reservation systems. In 1993 Worldspan
entered the airline technology services business. Its global data center is headquartered
in Atlanta, Georgia. They have three lines of business: travel supplier services,
e-commerce, and travel distribution for the travel industry. Worldspan processes more
than 50% of all online travel agency bookings through the 20,800 travel agencies that
uses its reservation system to access hundreds of the world's travel service suppliers.
Worldspan has a presence in 70 countries or territories worldwide.
Worldspan recognizes the influence of the Internet and have forged a partnership with
travelstore.com. Worldspan will become the exclusive supplier of global distribution
system technology and services for travelstore.com and its online travel planning and
reservations site. In addition they travelstore.com will receive Worldspan's transaction
processing and technology services, along with a comprehensive package of customized
e-commerce solutions and professional consulting services. This is a key strategy for
Worldspan to enter into the European business-to-business corporate travel market.
Travelstore.com offers online business travel planning and management services throughout
Europe. Specializing on the unique needs of small to medium-sized enterprises. Through
its Internet strategies, Worldspan is not planning to leave its dedicated travel agency
network, but instead to use the Internet to enhance its offerings to agents. This allows
agents to better serve the end customer. 
Through Worldspan Go, they are able to offer travel agents direct access to their CRS
with complete travel planning and booking capabilities, In addition to a browser-based
access to a broad selection of Internet-based travel products that also has fax and
e-mail capabilities. This is all accessed from a single desktop. The newly designed
Worldspan Go! Home Page makes everything easy to find and to use, with graphical
interfaces that quickly guide users to the solutions they need, whether system-based or
Web-based. Worldspan Go! is the Company's browser-based reservations and e-commerce
platform that will provide many benefits through its range of integrated products and
enhanced solutions. Their Internet strategy also offers Web-based solutions that are
designed to help the travel agent build sales and market services more effectively.
Worldspan has started a new Web site, mytripandmore.com, where travel agents can offer
travelers instant Internet access to their travel itineraries as well as providing
complete online information on car, cruise, hotel, airline, and tour reservations.
Mytripandmore.com has the ability to be accessed through Internet-ready mobile phones and
personal digital assistants (PDA). Worldspan is using the growth of the Internet to
leverage its travel agency business model. Its on-line strategy is to provide agents the
resources and capabilities that allow them to work more effectively and efficiently. As
other competitors are contemplating how to reach the end-customer, Worldspan is providing
technologically advanced solutions to better serve their clients. 
Sabre has been in the forefront of eBusiness for decades. The company uses latest tools
and technologies to remain the leader in the travel industry. Sabre is already strongly
positioned in the travel market by combining brick and mortar with online Web sites. 
Recent Sabre's endeavors in the eBusiness arena hitting the press are:
WEB HOSTING SERVICES 
Sabre launched a comprehensive suite of Web hosting services in April, offering services
with flexible tiered packaging and pricing, targeting high-volume, transaction oriented
e-commerce sites. The services include secure data center facilities, high-bandwidth
Internet connectivity, systems monitoring and professional services. 
Sabre's tiered Web hosting solution enables not only the company's traditional travel
and
transportation industry customers to quickly establish transactional-based Web sites,
but
companies in a variety of other vertical markets as well. Sabre Web Hosting delivers a
total solution - data center facilities, network infrastructure, systems monitoring and
ISP connectivity. Sabre already hosts approximately 700 sites. The different levels of
hosting services include: 
Managed Shared Hosting - a managed environment with shared server architecture.
This provides cost efficiencies for customers willing to share Sabre system resources.
Managed Dedicated Hosting - a managed environment with a dedicated server complex, 
gives customer flexibility, including non-Sabre applications, and maximum service and
support.
Co-location Hosting - customer-provided hardware and applications are housed in
Sabre's hosting facility; provides customer with control, flexibility, lower costs and
speed-to-market. 
Web hosting provides Sabre the opportunity to increase revenue streams through its
traditional travel and transportation segment and to expand into other
transaction-oriented businesses, such as financial and brokerage firms. The entire Web
hosting market is expected to generate $14 billion in revenue in the United States by
2003.
Sabre eVoya 
Sabre announced Sabre? eVoya in March. Sabre? eVoya travel agency technology offers an
entire suite of travel agency tools including eServices, eCommerce, eCare and
eManagement. Sabre eVoya technology is a new way to look at entire travel agency product
suite offered by Sabre.
Travel agents can now access services and support via eServices Web site. eServices can
help Sabre realize cost savings from streamlined operational processes as well as help
position Sabre as a travel agency partner offering enhanced customer service and support.
eServices offers the following features and functions:
Live Online Training and Chat: scheduled online user classroom training facilitated by an
online instructor; cost savings from less travel to training class locations; convenience
and flexibility of taking other select training courses online at any time
Equipment Ordering/Tracking: equipment orders for moves, adds, and deletes; ability to
check status of order online; automatic online confirmation
Online Diagnostics: hardware troubleshooting instructions, diagnostics, and diagrams 
Agency Dispatch: automatic dispatch of mice, keyboards, & monitors as well as LMR status
views; online technician dispatch for select onsite needs 
Booking Reports: ability to access current and historical reports as well as graph
booking trends 
QuestDirect and ECRT
QuestDirect is targeted to airlines or other travel related suppliers seeking to develop
an
e-commerce site to enable alternate distribution channels. QuestDirect is a complete
architecture, methodology and technology solution that enables high-availability,
high-traffic, large-scale direct sale transactions via the Internet and other e-commerce
distribution channels. More importantly, QuestDirect is completely customizable to meet
customers' specific needs. Swissair is a current QuestDirect client.
E-Commerce Reservation Tool (ECRT) is an online booking tool targeted to Sabre-hosted
airline customers and smaller non-hosted airline customers. ECRT is engineered to support
high-volume Internet sites receiving thousands of hits per day, with the performance and
reliability to service customers quickly and efficiently. Sabre provides an all inclusive
application development, connectivity to the reservations host and ongoing hosting
services. This tool is an attractive and cost effective option for multi-host airlines to
expand in the arena of online booking. Current ECRT clients include American Trans Air,
Legend Airlines and Midwest Express.
QuestDirect and ECRT benefit clients in numerous way by enhancing profits, and reducing
distribution costs and call center expenses due to direct sale transactions over the
Internet. Internet, e-commerce distribution channel affords the opportunity of increasing
market presence and revenues. 
STRATEGIC PARTNERSHIPS
Sabre and Ariba, Inc. announced an agreement to create Sabre e-Marketplace, the first
Internet-enabled B2B marketplace designed for the travel and transportation industry.
Powered by the global Ariba B2B eCommerce platform, Sabre e-Marketplace is expected to
drive cost savings and new revenues for industry participants through global economies of
scale and streamlined buying and selling. Sabre e-Marketplace will maximize the
purchasing power of companies with similar procurement needs, such as airlines, airports,
travel agencies, railroads, cruise lines, car rental companies and hotel properties.
Sabre announced a new Sabre Business Travel Solutions I2 Interactive Information
product, a Web-based management reporting and data analysis tool. I2 was created in
response to customers' request for a comprehensive, Web browser-based product to access
corporate travel data and easily distribute reports via a Web page, email or as a
converted spreadsheet.
Sabre has joined forces with flightserv.com to enable Sabre Connected business travelers
to purchase individual seats on chartered private jets as an affordable alternative to
fully refundable commercial airline travel. The partnership will provide access to
flightserv.com's proprietary Private Seats & trade; product through Sabre BTS.
FusionOne and Sabre have formed a partnership to integrate fusionOne's free Internet
synchronization service with Sabre's travel Web sites. Synchronized access will be made
available to more than 350 corporations using Sabre BTS as well as Sabre Connected travel
agencies through the Sabre Virtually There Web site.
Sabre, SCA Telecard Promotions and West TeleServices Corporation launched a
teleservice promotional program offering free long distance service to travelers through
the Sabre Virtually There Web site. Once a trip is booked, travelers can access their
trip itineraries through the Web site and receive free long distance in increments of 10,
20 or 30 minutes. Sabre formed a strategic alliance with OracleMobile.com, a new
subsidiary of Oracle Corp., to provide wireless users of Sabre BTS, Travelocity.com and
Sabre
Connected travel agencies the ability to book travel via Web-enabled handheld devices.
ACQUISITIONS
In Aug Sabre announced the acquisition of Gradient Solutions Limited, a Dublin,
Ireland-based technology company that provides e-commerce solutions to the global travel
marketplace. Gradient Solutions enhances Sabre's existing leading-edge Web development
expertise and technology, as well as online distribution solutions, by bringing an
international and highly customizable online booking engine. Hosting capabilities have
also been extended, with the new group having two advanced data centers, one located in
Europe with the other in the U.S. Gradient's technologies provide tools for
multi-language and multi-currency needs and offer the ability to connect to multiple
global distribution systems. 
In the B2B area Sabre completed the acquisition of GetThere. GetThere operates one of the
world's largest Internet marketplaces focused on business-to-business travel services.
GetThere's systems are used to provide online travel procurement to employees at leading
corporations such as Boeing, Chevron, Cisco, Cox Enterprises, Lucent, MetLife, Nike and
Xerox. GetThere also powers online travel sites for leading airlines, including Alitalia,
All Nippon Airways, America West, British Airways, Northwest Airlines, TWA and United
Airlines. 
The vision of Sabre is to be the world leader in information technology for the travel
and transportation industries. Sabre plans to continue being the standard bearer of
customer reservation system technology. Sabre's recruitment brochure states that Sabre
are progressive technological thinkers, innovators of information technology for systems
solutions and that Sabre is a leader in developing superior products and services that
meet customer needs. Sabre is a technology company whose primary businesses are
electronic travel distribution and information technology solutions. Being a technology
company, Sabre must utilize the technology available to improve their processes and
increase their market share. 
Managerial vision is an important aspect of continuing success. Responding to the mew
market developments, such as the expansion of the Internet and e-commerce, are also
critical to continuing success. The CEO of Sabre, Bill Hannigan, stated in a Merrill
Lynch Conference, the overall strategies of Sabre: satisfy customers and seize
opportunities with speed and agility, grow the business, invest and innovate in new and
existing products and technologies to win, leverage resources and synergies for greater
profitability. These strategies can influence the future goal of Mr. Hannigan's Sabre and
that is to create new best of breed products and expand presence in all transportation
alliances. Travel is the largest category of e-commerce (Boydston R36). Forrester
research claims a $30 billion market by 2003 for online travel industries, which is a 25%
increase from 2000. Forrester also states that the total of worldwide growth by 2004 for
North America is $ 6.8 trillion for business-to-business and business-to-consumer
industries. The possibilities and profitability is enormous. Few innovations in human
history encompass as many potential benefits as electronic commerce does. The global
nature of the technology, low cost, opportunity to reach hundreds of millions of people,
interactive nature, variety of possibilities and resourcefulness, and rapid growth of the
supporting infrastructures results in many potential benefits to the organization,
individuals, and society (Turban 16). Sabre currently holds a competitive lead in its
industry and in the new online market share. Currently Sabre holds 38% of the global
share of travel agency business. Its competitor Galileo holds the second position at 28%.
Sabre currently holds 60% of the online market share in its industry. Worldspan, another
competitor comes in second at 29%. Sabre holds the complementary assets that will make
its e-commerce ventures successful. In an executive presentation of New Frontiers in
Travel Distribution, Mr. Hannigan stated the new vertical e-marketplaces may be all the
rage on Wall Street today but we've been doing e-commerce for 40 years in the travel
business Sabre has built up its company resources and competencies that it can compete
with the new companies entering the industry and with current competitors trying to
change their structure to compete online. In a personal interview with Mr. Hannigan he
explained that e-commerce would not change the way business is conducted. E-commerce will
not make or break a current or new company (unless of course it is a pure-play e-commerce
business). What is important is the viability of the business model that the company has.
E-commerce is a tool, which if used correctly can transform the industry. Bill Hannigan
stated I see opportunity in the form of a chance to revolutionize the way we do business,
through the use of new technologies, business models and methods of travel marketing(new
frontiers). Sabre's goal is to use the new technologies to help improve their business
process and not overhaul the Sabre business model. The goal is to drive all of that
technology forward, to be the change agent that helps keep the travel industry on the
leading edge of the e-commerce revolution (Hannigan Ariba). Sabre wants to continue to be
the standard-bearer in the travel distribution industry and the Internet and e-commerce
can facilitate that vision. Sabre's strategy, in e-commerce, is not limited to offering
customers access to flight information. It is with partnering with companies to help
distribute Sabre technology across business areas. The customer base for Sabre is not
just travel agencies, but also airlines, airports, hotels, car rental companies, and tour
operators. E-commerce also has facilitated the growth of the business-to-business
reservation opportunities. Online corporate travel is seen as a critical new market and
Sabre wants leadership in the business-to-business market. Sabre's top management sees
the potential impact of the Internet and e-commerce in increasing revenue dramatically in
the corporate travel. In a personal interview with Bill Hannigan he discussed in the
importance of recognizing all potential transportation customers, who direct Sabre's
attention to the railway industry as a market to further, develop. 
The Internet and e-commerce are facilitators of the business process. It can help improve
the way a business competes but it will not change the business commerce model.
E-commerce and technology can help with the cost of business by reducing distribution
costs, improving supplier behavior, and individualizing marketing effects. In a New
Frontiers in Travel Distribution presentation, Bill Hannigan stated that the e-commerce
strategy at Sabre is to use the new technology and the experience of Sabre in travel
distribution to make sure that the travel industry advances just as far, as fast, and as
profitable as it can possibly can. Sabre will continue using the technology available to
further dominate the industry and its competitors. Sabre has had an aggressive history
with its capabilities. In a 1997 Forbes article, the author stated Sabre is embracing the
web wholeheartedly for direct sales to travelers, while Galileo is limiting its
involvement to suppliers to Internet travel sites (Palmeri). This statement is further
validated by Sabre's 60% market dominance on the online industry while Galileo holds only
%. Sabre has taken advantage of Galileo's slow pace and established itself as leader with
Travelocity in the business-to-consumer market and with Business Travel Solutions,
GetThere.com, and Virtually There.com in the business-to-business market. Galileo has
since increased its web presence. At a conference the CEO of Galileo, James Barlett
stated to take advantage of its market maker position, Galileo has been aggressively
updating its network. The company has recently acquired Trip.com to compete in the
business-to-business market. It has set up point and click access to cruises. Galileo is
aggressively trying to penetrate the Internet market but it has not been aggressive
enough to rank second in the online market. Worldspan ranks second with 29% of the online
market. The e-commerce and Internet marketplace is a key component of Worldspan's tactic.
The senior vice-president, Sue Powers stated Worldspan has leverage the concept of
e-commerce as the basis for strategies that have propelled the company to the business
forefront. Worldspan claims 50%of all online travel bookings. To further press its
aggressiveness, Worldspan has combined forces with ByeByeNow.com to penetrate the
business-to-business market. Worldspan has also partnered with Expedia on a new pricing
engine for Internet travel reservation. Worldspan can become a serious competitor by
partnering with technology rich companies and transportation industries. 
It cannot be denied that the Internet and e-commerce has changed the travel distribution
industry. It has created more information hungry consumers and faster responding
companies. The first step in incorporating the new trend and technology is the managerial
vision of Sabre's executive. The vision will drive the company and its employees. Sabre
needs to insure that they take advantage of all its capabilities and aggressively use the
technology to insure dominance and deter new competitors. 
So what is on the horizon for Sabre? As one would assume, Sabre is always at the mercy of
an ever-changing technological environment. With competitors at its heals on a daily
basis, Sabre must keep its sights fixed on the future in order to excel in the present.
So whether the company's strategy involves new products, business alliances or strategic
acquisitions, one thing is for sure - Sabre will not survive sitting still. 
The company has already taken great strides to distance itself even further from its
competitors. In July of 2000, the company launched a reservations system for mobile
phones and devices using Wireless Application Protocol (WAP). According to Scott W.
Smith, senior vice president and general manager of Sabre BTS, this technology allows
customers to create, access and change flight, car and hotel reservations using
WAP-enabled mobile phones offered by Nokia, Sprint PCS or AT&T Wireless, or WAP-enabled
personal digital assistants (PDAs). Sabre is also introducing wireless viewing capability
to its Sabre VirtuallyThere web site customers, giving travelers mobile access to travel
itineraries, flight details, gate information and weather forecasts using the wireless
device of their choice. 
Another recent development in the online travel industry that will serve as a crucial
survival technique for years to come is business alliances. Sabre's most recent agreement
involved ILOG, the world's leading supplier of software components. Through this
relationship, Sabre gained access to embeddable optimization, visualization and business
rule components that dramatically shorten the development time of enterprise applications
in the supply chain, telecommunications, transportation and financial services industries
(ILOG). This partnership gives Sabre a very valuable stake in the future of technology in
the online travel industry. It allows for the integration of ILOG's product suites of
optimization, graphical user interface and business rule engine software into existing
and future Sabre airline and online products. Alliances such as this will not only become
more common, but they will become a requirement for companies such as Sabre looking to
compete in a highly saturated industry.
Regulation will also be a major component to Sabre's long term goals. In the 1980s, the
U.S. Department of Transportation (DOT) devised rules for computer reservations systems
after receiving complaints about biased displays from travel agencies and airlines.
Today, DOT is debating whether to have an even stronger regulatory stance. Stronger
regulation may interfere with the fast-paced, rapid-growth environment of the online
travel industry, but Jim Marsicano, Travelocity's executive vice president of sales and
services, doesn't see it that way. He says, It wouldn't bother us at all to have the same
rules applied to the Internet. But history has shown us that anytime the government
expands their presence, industry changes will be imminent.
Also, U.S. computer reservations systems have faced persistent trade barriers in their
efforts to establish a market presence in certain countries. Several foreign air carriers
and transportation providers, and the CRS's they own or market, have deliberately
withheld fare and schedule information and other enhancements from U.S. CRS's. At the
same time, the foreign CRS receives full functionality. Such discrimination is illegal.
The foreign airlines and foreign CRS's that discriminate against us have unrestricted
access to the U.S. market and receive the full protection of the U.S. Department of
Transportation rules ensuring fair treatment of all airlines and CRS's. This double
standard has proven to impede the expansion of Sabre's presence in foreign markets. If
this problem persists, Sabre will be at a huge disadvantage to its competitors overseas.

Another possible consideration for Sabre in the long run is labor force issues. A
shortage of qualified employees is already infiltrating the IT industry. Sabre's web site
had this to say about the problem:
Sabre's business success depends on the ability to hire highly skilled technology workers
such as computer scientists, mathematicians and industrial engineers who provide the
technical expertise to serve Sabre customers. The supply of this labor in the U.S. has
not kept pace with the demand. Sabre is working with the government to reach both long
term and short term solutions to this critical workforce problem.
As one can see, there is room for concern regarding this issue. Sabre still relies on
skilled employees to power the company, no matter how technologically enhanced it
becomes. With new competitors rapidly entering the industry, the ability to hire
qualified workers may just be the deciding factor in Sabre's success. 
The rise of e-business is putting pressure on vendors to accelerate the evolution of
predictive analysis tools. Nowhere is this pressure felt more than at Sabre. So in order
to work through the complex task of modeling the future, Sabre has implemented BMC's
Patrol predictive analysis and capacity planning software. According to Mike Nelson,
senior vice president and general manager for global infrastructure at Sabre Holdings,
tools that do a better job of predicting how potential spikes in traffic will impact IT
performance will be vital. Sabre handles more than 1 billion hits monthly on 700-plus Web
sites it hosts as an ASP and its Travelocity reservation system. So if the company can
adequately predict and prepare for that enormous wave of traffic, it will keep business
processes flowing as efficiently as possible.
As one can see, the future presents numerous obstacles and issues for Sabre. The company
will most likely continue expansion as an application service provider and develop
strategic partnerships and alliances in order to circumvent overseas resista