But we also learned with the H1N1 outbreak in Mexico and the U.S. last spring that disease is not the only risk. Poor information-sharing by governments can exacerbate the situation by leading them to make poorly informed decisions on travel advisories and bans.

Rumor and speculation, rather than facts, guided far too many global governmental decisions regarding how people should travel and how goods should be transported between countries. This inconsistent messaging and miscommunication caused many companies and individuals to cancel travel plans - adding to the already immense challenges of a global economic downturn. This can have a cascading effect on the travel and tourism industry, which generates approximately $5.5 trillion in economic activity annually, according to the World Travel & Tourism Council.

The events of last spring argue for greater coordination between governments. To that end, Travelport has called on the governments of the United States and the European Union to develop a US-EU Task Force on Global Emergency Communications. The proposal is part of the Transatlantic Business Dialogue’s “Building a Transatlantic Innovation Economy,” a set of recommendations developed by the transatlantic business community. [You can see the recommendations by clicking here.]

Governments on both sides of the Atlantic need to develop a coordinated approach when communicating restrictions on global travel and shipping during health and security-related emergencies. A public-private task force on emergency communications will help us achieve consistency in messaging and minimize unnecessary disruptions of global travel and trade.

The task force would serve as a clearinghouse of fact-based information for elected officials responding to global crises. It would also help establish cross-border relationships between decision-makers and develop processes to ensure consistent communications in the event of an emergency. Ideally, the task force would be chaired by government and business representatives from the travel and supply chain industries. Other members would represent different sectors of the economy and include health and security representatives.

In a world where rumors and speculation spread even faster than viruses like H1N1, we need to make sure that we’re getting accurate information into the hands of decision-makers. A task force on global emergency communications will go a long to make sure that happens.

It’s gratifying, then, when an independent organization recognizes the work we do. InformationWeek magazine recently ranked Travelport No. 11 on its InformationWeek 500 for our innovative use of information technology. This is a prestigious list because it doesn’t just look at what companies spend on information technology - it looks at how innovative they are in using IT to serve customers and grow their businesses. (You can see the 2009 rankings by clicking here.) I’m proud to say that Travelport had the only GDS ranked in the Top 250.

Our high ranking is largely the result of the complex and highly successful project to consolidate our Denver data center operations into our Atlanta facility. The switchover required months of planning and testing to make sure we made the migration cleanly and without disrupting service important to our customers and partners.

Our team used new and innovative technologies to migrate over one petabyte (that’s 1,000,000 gigabytes) of critical data. During the migration, data was moved data from three different mainframe environments and 600 servers, more than 60,000 network route changes were made, and 45 million travel reservations were shifted to Atlanta with minimal service interruption.

Results of the migration have exceeded expectations. Customers report a 50% improvement in response time for key applications. For Travelport, the migration significantly improved our technical infrastructure, provided major cost savings, improved reliability of global operations and reduced the physical data center footprint in support of our Green Initiative.

At the end of the day, though, Travelport IT innovation is focused on one overarching goal: to create exceptional travel experiences for our customers. That’s what we’re in business for, and we’ll continue to invest in technology that helps us deliver on that goal.

Travelport recently joined with our GDS competitors, Sabre and Amadeus, to support the Millennium Foundation for Innovative Finance for Health, which supports the work of UNITAID in its global mission to combat such life-threatening diseases as HIV/AIDS, malaria and tuberculosis in developing countries.

Through a Millennium Foundation initiative called MASSIVEGOOD, our three companies will offer travellers a convenient and secure way to give back through a simple voluntary donation of $2, €2, £2 or more. The contribution process will be built into our point of sale applications and will be available whether travellers book online or through a travel agent. (Click here to view a video that explains more.)

The success of the Millennium Foundation’s innovative financing solution depends on creating a global movement. We hope that cooperation within the travel industry will be a model for other industries across the world.

The GDSs have a unique role to play. We provide a critical link to hundreds of millions of travellers - many of them with a global perspective and an appreciation of the challenges faced by those in developing countries.

Together, we issue more than 500 million airline tickets each year. This means that even a small percentage of participants could make a big difference in the lives of millions of people. We see the potential of this program to reduce child mortality and improve maternal health - saving lives on a massive scale.

This is a fitting role for the travel industry because mass travel is a powerful force for social and cultural awareness and understanding. The more people travel, the more connections they make with other lands and people, the more they recognize their roles as global citizens, and the more likely they are to take advantage of this new program to make a contribution and a difference.

The MASSIVEGOOD program will be rolled out in 2010, so stay tuned.

The travel industry argued at the time that business travel is an important stimulus of economic activity that should be encouraged, not discouraged. (See my earlier blog on the subject here.) Now, a new report sponsored by the U.S. Travel Association (USTA) and the Destination & Travel Foundation shows just how important business travel is to growth and productivity.

The study, conducted by the global research firm Oxford Economics, determined that every dollar invested in business travel results, on average, in $12.50 of increased revenue and $3.80 of new profits. This is in addition to the $246 billion in spending and 2.3 million jobs generated annually by business travel in the U.S., according to the USTA.

Researchers found that a 10% increase in business travel spending would increase productivity, driving higher sales and profitability and lead to an increase in U.S. GDP of 1.5-2.8%. Studies in the EU countries and the UK have also found a strong relationship between business travel, productivity and economic activity.

The study reinforced something I think virtually all business and sales executives would agree on - that meeting personally with customers and potential customers makes a big difference in our business success. Executives and business travelers surveyed by Oxford Economics estimated that they have an average 40% conversion rate when they meet in person with prospective customers but only a 16% conversion rate without such a meeting. They also estimated 28% of their current business would be lost without in-person meetings. There’s just no substitute for face-to-face contact.

But business travel has a positive impact beyond keeping customers and converting prospects. It also helps companies build business/vendors relationships (trade shows and conferences, to name a couple of examples). And it’s a way to invest in employees through internal meetings, incentive events and conferences.

The USTA study makes clear that business travel is not just an expense - it’s an important investment in the business and in the relationships we build with our customer, partners and suppliers. Not to mention the economic benefits it has for airlines, hotels, restaurants, rental car companies, taxi drivers and many other businesses - and their employees - who depend on travel and tourism.

I encourage you to read the study, which you can find by clicking here.

The fact is that more people are traveling to more destinations around the world than ever before. While the global economic recession has taken a toll on travel and tourism, the long term growth trends haven’t changed. Tens of millions of new tourists (think China, India, Brazil and Russia) will mean even more pressure on travel destinations - particularly historic sites and those with sensitive ecologies.

Growth is good for the travel and tourism industry, but it comes with a responsibility not only to provide the best travel experiences today but to preserve those experiences for future generations of travelers. That’s why GTA North America/Travel Bound has formed a strategic global partnership with Tourism Cares, a US-based, non-profit organization dedicated to responsible and sustainable tourism.

Tourism Cares is helping preserve the travel experience by “awarding grants to natural, cultural and historic sites around the world; presenting academic and service-focused scholarships to hospitality and tourism students; and organizing volunteer efforts to restore tourism-related sites in need of care and rejuvenation.” It does this by mobilizing the travel and tourism industry and travelers. (You can find out more at www.tourismcares.org.)

In past years, Tourism Cares volunteers started the restoration of the Louis Armstrong Park in New Orleans, Louisiana, which had been virtually closed since Hurricane Katrina, and helped clean up the historic Ellis Island in New York harbor, where millions of immigrants first set foot on American soil.

On Sept. 11, a group of 65 GTA employees in the U.S. traveled to Washington, D.C. to join other volunteers from the industry for the Tourism Cares for America Volunteer Day - a clean-up project at the National Mall and Memorial Park in Washington, D.C. The weather, unfortunately, did not cooperate and the event was cancelled, but the rain did not dampen the GTA team’s commitment to Tourism Cares and future volunteer events.

Tourism Cares is also helping in other ways. Since 2003, it has awarded nearly $2 million in grants for conservation, preservation and restoration of natural, cultural and historic sites in 25 countries around the world, including the ancient rock city of Petra in Jordan, Sagarmatha National Park in Nepal and Bartolomeo Island in the Galapagos.

As a strategic partner with Tourism Cares, GTA is encouraging our employees and partners to support the Tourism Caretaker program, which enables all of us in the industry to make a small financial contribution to support the organization’s initiatives.

The activities supported by Tourism Cares send an important message about the commitment of the travel and tourism industry to preserve travel experiences for generations to come. They also show that it takes more than money to promote responsible and sustainable tourism; it takes volunteers who are willing to invest personal time to serve a good cause.

GTA is proud to partner with Tourism Cares. The way we see it, it’s good for travelers (today and in the future), good for our customers and good for the long-term health of the travel and tourism business.

A good place to start is with the latest book by Wired editor Chris Anderson, Free: the Future of a Radical Price (2009).   Its thesis is that in a digital world, price is rapidly falling to zero.  The new world he describes is the digital equivalent of the Gillette model of selling razors at a loss and making money on the blades.  We’re seeing this with everything from software to photo sharing and editing sites, where online businesses attract customers with free basic services and make money on more feature-rich premium services.  It’s a model engrained in those under 30, who are accustomed to getting their information for free.

A good example is the recent decision by online travel companies (OTC) like Orbitz Worldwide to eliminate booking fees.  For a decade, the OTCs believed they needed to charge consumers to book flights in order to make money.  The fees had the effect of leading many consumers to find a flight on the OTC but book it on the airline’s own Web site.  Since eliminating booking fees, more consumers are booking their flights through the OTCs.  At Orbitz Worldwide, for example, air transaction grew 22 percentage points in the second quarter compared to the first quarter of 2009, when fees were still in place.

The Black Swan: the Impact of the Highly Improbable (2007), by Nissam Nicholas Taleb.  The title comes from the assumption made in the 17th Century that all swans were white because it was the only color ever observed - until a species of black swans was discovered in Australia.  His message is we can’t predict important events simply based on past events or conventional assumptions.  He explores the way the brain and experience works, our innate optimism and our inability to read signs.

There’s a clear lesson here for business around the notion of asymmetric risk - in other words, risks that arise from wholly unexpected or unpredictable places, outside our normal range of experience and observation.  I used the book with Travelport’s senior leadership team last year as a way to encourage new thinking about the kinds of companies that could disintermediate our businesses.

Outliers: Stories of Success (2008), by Malcolm Gladwell, looks behind the secrets of success and finds interesting patterns that defy some of our long held notions of why some people succeed wildly (think Bill Gates) while others never quite seem to live up to their potential.  He finds individual merit has less to do with it than culture, community, upbringing, fortuitous timing and dogged persistence.  All the outliers he studied invested at least 10,000 hours of intense, focused effort to become expert in their area.

There are also two older books that have had a lasting influence on me.

The first is Capitalism, Socialism and Democracy (1942), Joseph Schumpeter’s classic economic essay addressing the concept of capitalism driving innovation through “creative destruction,” a Darwinian view of markets.  This book has been particularly influential on me when I’ve managed mergers, re-engineering and outsourcing operations offshore.

The second is The Soul of a New Machine (1981), by Tracy Kidder.   I first read Soul when I joined Digital Equipment Corp. in 1985.  Kidder spent a year following a team of passionate engineers at Data General who were designing and building a new computer to compete with DEC’s products.  It shows how core technology development occurs, the risks, processes and personalities of complex system design, and the heated competition internally and externally in high tech corporations.  It emphasizes the extraordinary effort and passion individuals need to achieve breakthroughs.  It is also a poignant story.  Despite the quality of the product and the immense effort to overcome great odds, it didn’t succeed in saving Data General in the marketplace.

The book helped me understand that passion, focus and enormous hard work drive breakthroughs.  But I also learned that this passion and focus quickly dissipates in large organizations and in business-as-usual (non-crisis) environments.  As such, it’s important to set up small, empowered groups and inject a sense of urgency into their mission.

Regardless of what business or industry you’re in, there are great lessons in each of these books.  In a world as competitive as this one, we need all the insight we can get.

In reading articles about the distribution of travel services, it’s not uncommon to come across the phrase “traditional GDS.” In a 21^st Century context, “traditional” suggests the old way of doing things – more Betamax than Blu-ray. Although I don’t think this is actually true of the modern GDS and the advanced technology that drives our business, it’s a reminder that the future of our industry depends on more than the scale and presence the GDSs have today. We have to evolve to meet the growing and changing needs of our customers, and this means changing some of the ways we have traditionally done business.

The travel industry today is no different than any other industry; it is driven by an explosion of information, new and more flexible technologies, and an almost insatiable demand from companies and consumers alike for rich and varied content, presented in a way that enables them to make an informed travel choice. This is driving significant change for our suppliers and customers, and GDS providers need to be equally if not more fleet of foot in anticipating their needs, delivering services ahead of the curve and doing so in an open environment.

The most immediate technology challenge is the aging “green screen” technology used by our travel agency client base – and the historic lack of investment in a true alternative. While most GDS companies have added a “point and click” user interface for their products, it amounts to little more than a graphical skin on top of a cryptic entry workflow process. It’s not enough to accommodate a new world of unbundled content, merchandising, cross-selling and upselling – not just for airlines but for all content suppliers.

We need a far more radical approach – one that enables travel agencies to compare and contrast all the product offerings while incorporating this new content into their workflow and management processes. One that enables corporations to determine which unbundled products are permissible expenses and, if they are, insure they are offered through their chosen corporate booking tool.

In fact, I believe we’ve reached something of an inflection point where we finally have the catalyst we need to get the GDSs and their users off the green screens once and for all. We can now begin to envision the significant enhancement of GDS navigation, the unprecedented broadening of content available to be sold through a GDS, and a revolution in the dialogue between travel product suppliers, travel product retailers and the GDS as to how travel is sold.

To be sure, radical change will require significant new investment by the GDSs and others, but the result will be a true, service-oriented environment. It can and will be achieved by using state of the art browser and display capabilities – integrating data and information sourced through APIs alongside the more traditional host-to-host and peer connectivity the GDSs have relied on for so long. (It will also require a set of industry standards to tie all these systems and connections together, a subject I’ll address in a forthcoming blog.)

Travelport has already pioneered many of these concepts through our work with Air Canada, which was one of the first airlines in North America to embrace unbundling as a new way of selling their product. Traditional GDS methods would not allow us to blend together the way Air Canada sells its branded product with their a la carte menu of additional services (seat assignments, meal vouchers, etc.). We added an API connection into their application in which all the bundled and unbundled intelligence is stored. There was no way we could meaningfully display this content alongside other carrier options on a green screen. Just last month we rolled out Travelport Agencia, which incorporates all of this new technology, to travel agencies throughout Canada.

This is just the beginning. To accommodate the way each supplier wants to sell and promote their product now and in the future, GDSs and other interested stakeholders have to develop an entirely new means of aggregating and displaying content into travel agency desktops and corporate self-booking tools. We also need to provide one-stop API access to multiple OTAs and other online intermediaries.

The good news is that this is actually well advanced and in production. We have the means to connect content from multiple sources, mix and match, enable comparison shopping across different content sources and handle different methods of payment.

I’m optimistic that the industry will see significant further investment as well as advances in the user experience for both travel agencies and corporate travel managers. But radical change will require more than the effort of individual GDSs. It will also require a travel industry that is willing to embrace change and new ways of working to take full advantage of this tremendous opportunity.

It’s all about supply and demand, and there’s a lot more travel supply than there is demand today.  Hotel occupancy rates in May fell to 56% in the U.S, 59% in Europe and 61% in Asia Pacific*.   June aircraft load factors at several major airlines in the US were stable or even slightly higher than last year, but that is on the back of substantial capacity cuts (a feat which is not easily replicated on the lodging side).  Some major European airlines saw load factor drops in June.**

To generate more demand, airlines and hotels are cutting prices on key routes and in key markets.

On the London/New York City route, for example, the lowest air fares in June were down 46% from London and 35% from New York compared to June 2008.  Overall, the lowest economy cabin fares in June fell by 11% globally and by 23% in the U.S. year over year.  The number of published fares in June increased by 16% globally and 34% in the U.S. from last year, so consumers have a lot more choice. ***

Hotel deals also abound.  Average daily rates (ADR) for hotels in the top global cities dropped by a much as a third from April 2008 to April 2009.  This includes ADR declines of 33% in Madrid, 32% in London, 31% in Sydney, 26% in New York and Rome, 22% in Paris and 21% in Hong Kong.*  The number of hotels offering promotions such as four nights for the price of three, free WiFi and additional loyalty points continues to grow.

Adding to the savings for travelers is the decision by online travel agencies (OTA) like Orbitz and CheapTickets.com to eliminate flight booking fees.  OTAs are also playing a big role in driving travel packages and promotions.

At the same time, travelers with flexibility in terms of when they travel are finding a lot of last-minute deals as airlines and hotels compete to fill seats and rooms.

Special promotions, lower air fares and reduced hotel rates are helping ease the impact of the global economic crisis on the travel industry.  The 12% decline in air traffic bookings in June was an improvement over the 14% decline in May.   The June number was also better than forward booking trends suggested. Bookings for June/July/August have been relatively strong during the last month, driven by price promotions and last minute demand for summer travel. **

It appears to us that we may have reached bottom in terms of demand declines.  Real recovery in demand, of course, will take longer – the end of 2009 at the earliest and more likely 2010.  Even then, forecasters see gradual improvement over the next few years, not a big surge in demand.

For now, though, there are a lot of good opportunities for deal-hunting travelers.

Sources:
* STR Global
** Travelport market research data
*** Travelport GDS proprietary data base

I don’t mean to suggest that there isn’t room for improvement in the GDS model, particularly in how we provide and present content to travel agents, corporate travel managers and other users and I’ll address some of these improvements in upcoming blogs.

Most consumers do not consider that they will receive an unbiased selection of all the travel options available when they go to a web site which is branded to a particular supplier.  And they would be right.  There was a tendency some time ago for consumers to believe that the only place they would see a travel supplier’s lowest price was on the branded web site of that supplier.  However, through what are known as “full content deals”, the GDS industry has largely contracted with the vast majority of airlines and indeed hotel chains to ensure that all publicly available fares, seats or rooms are shown through the channels using the GDS. These channels include all of the major Online Travel Agencies (OTAs) as well as the high street leisure agencies and business travel management companies.

The recent decision in the USA of all the major OTAs to largely remove the booking fees they once charged to consumers now means that there is no need whatsoever for a consumer to shop for choice of carrier and itinerary at an OTA and then go to the supplier.com web site to book the same price or itinerary in order to save the OTA booking fee.  Similarly in the business travel world, the desire of low cost carriers to capture more corporate business has resulted in increasing numbers and “big names” such as EasyJet in Europe and Southwest and JetBlue in the USA embracing participation in the GDS because the GDSs are the main content aggregation, singular booking process, on-line booking tool and travel workflow automation providers to both corporate and leisure travel providers.

Travel meta search companies, which screen scrape the web sites of assorted travel providers to provide on-line consumers with travel options, generally offer a more limited range of options to that of sites powered by GDSs. It is for this reason that several meta search sites have actually entered into agreements with Travelport and pay for access to and use of our data in response to consumer queries on fares and seat availability.  Furthermore, the majority of bookings which emanate from travel meta search go to Online Travel Agencies which are of course largely reliant on the GDSs for their aggregated content, fares and booking capabilities.

It is maybe not the most glamorous thing in the world to be the plumbing behind the global travel industry but for that part of the consumer led market which demands choice and wants to be able to see and access consistent travel content through multiple channels – on-line, off-line, mobile, policy managed, non managed – then this is the role the GDSs play.

Such “plumbing” requires infrastructure and investment – in the case of Travelport a state of the art data centre complex which processes more than 31 billion transactions per month and handles 65 million travel searches per day.  A fares database which holds over 4 billion prices and an almost infinite range of price combinations enabling consumers ultimately to get a price to journey from and to virtually any point on the planet which has a commercial air service and to stay in any one of over 92,000 hotel properties along the way.

The challenge for GDS providers – just as it is for virtually every other business – is to stay relevant in a rapidly changing world.  This means processing and presenting data in different ways, adding the ability to pay for a seat assignment, a checked bag or a spa treatement at the hotel as well reserve the room as we continue to evolve to meet the changing needs and expectations of our customers and suppliers.  This requires investment in applications and infrastructure.

However, the goal at Travelport remains the same: to enable our customers and suppliers to provide informed travel choice on a global platform.

As you can imagine, we had a lot of issues to discuss: the state of the travel economy, the impact of the swine flu virus, the ability of travel and tourism to stimulate economic growth, building public/private partnerships, and much more.  It was also an opportunity to share ideas for developing the travel and tourism business in Brazil, which has huge potential as an international destination.

The Summit is also a big networking event.  It’s not often that we have so many industry leaders in one place, so it’s a great place to meet with customers, suppliers, partners and government officials to discuss the key issues facing our industry – and, of course, talk about potential business opportunities.

One of the highlights of the Summit was the announcement of the winners of the Tourism for Tomorrow Awards.  Travelport is a co-sponsor of the awards, which provide outstanding examples of how businesses and destinations are creating sustainable travel services and opportunities.  I had the honor of presenting two of the four awards.

Travel and tourism represents 8% of global GDP, according to the WTTC, so it has the size and scale to energize economies around the world.  But the long-term growth of our industry also depends on our success in delivering travel and tourism experiences that are environmentally, economically and culturally sustainable.  We have to be a leader, not a follower.  And one way we can lead is by shining a bright light on the companies and organizations that are pointing the way to a more sustainable future.

The award winners – and the other eight finalists as well – stand out because of their vision, their creativity and ingenuity and their unwavering determination to turn their vision into reality.

Take the Destination Stewardship Award recipient – Grupo PUNTACANA from the Dominican Republic.  For nearly three decades, it has worked to create a community that respects the natural habitat of Punta Cana and betters the lives of local people.  The Punta Cana International Airport, for example, was designed to reflect the local culture and built using local materials.  Of Grupo PUNTACANA’s 1,700 employees, 99% are from the Dominican region.  It also founded the Puntacana Ecological Foundation, which created a 1500-acre private nature reserve, contributes to coral reef conservation and supports sustainable development initiatives.

The Conservation Award winner was NatureAir, which flies to 17 destinations within Costa Rica.  Five years ago, the company made a pledge to set new standards for sustainable practices in the airline industry.  It compensates for 100% of its greenhouse gas emissions through preservation and reforestation of tropical forests in the Osa Peninsula, in the southwest corner of the country.   NatureAir has also developed Costa Rica’s only alternative fueling station, and fuels company vehicles and equipment using 100% bio-diesel.

The winner of the Community Benefit Award was the Zakoura Foundation for Micro Credit, a Morocco-based not-for-profit organization.  In 2003, Zakoura launched a Rural Tourism Program to develop tourism-related projects focused on financial, cultural and environmental sustainability.  The idea is to give rural people opportunities to diversify and increase their incomes by creating or developing tourist activities, from restaurants and local produce to accommodations and leisure activities.

The Global Tourism Business Award went to Marriott International Inc., one of the world’s largest hotel groups.  For the past 18 months, Marriott has worked with Conservation International on a sweeping initiative to put 1.4 million acres of Amazon rainforest under conservation protection – a model for collaboration between the private sector and conservation organizations.  In addition to carbon offsets through rainforest protection, Marriott is reducing fuel and water consumption, working with vendors to provide greener products, creating green construction standards, and providing environmental education for employees.

You can find out more about the winners and finalists by clicking here.

It’s hard sometimes during an economic crisis to look too far into the future.   But the Tourism for Tomorrow Award winners underscore that the travel and tourism industry is not only talking about sustainable travel but doing something about it.  Each of the 12 finalists is an outstanding example of what the future of travel can be and the positive impact sustainable travel can have on the environment, community development and local economies – as well as the long-term growth of our industry.