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Travel businesses react in different ways to a crisis. In ATPI’s case, one response to the pandemic is to join the other mega-agencies that sell technology to other travel agencies. What ATPI may find: licensing can be a complex affair.
Working in ATPI’s favor is its track record with technology startups. It recently invested $1.4 million in TapTrip for example, and almost $350,000 in Singapore’s Greywing platform. Now it wants to “set free” its own platform, according to its CEO, and make money licensing it to other companies that may not have the resources to build their own.
“Our own technology stacks that we’ve built, we’re actually going to be moving into a separate division so that, as well as a travel management company arm, we’ll have our own technology arm,” said Ian Sinderson.
ATPI has weathered the storm relatively well compared to many of its peers, thanks to strong links with the resilient marine and cargo shipping sectors. It managed to make a profit of $15 million last year, but that figure was down 50 percent on 2019. Selling software could make up for lost revenue.
Its new technology arm, TripStax, will be a semi-autonomous company once it formally launches in the coming months. TripStax was actually incorporated in August last year, but ATPI toyed with other names, registering Travelstax and Lemonstack along the way at the UK’s Companies House.
TripStax will offer a complete suite of platforms, including a booking tool, profile manager, analytics, duty of care and traveler tracking platforms — core aspects of technology the agency has spent a fair amount of time building internally, Sinderson said.
“We feel now is the time to actually set it free, to be able to be a business in its own right,” he added.
Cutting the Right Deal
ATPI isn’t the first agency to licence a software-as-a-service travel platform to third parties, as some of the bigger players also do this. With their deep pockets they’ve more opportunity to build, or even buy, specialist platforms.
American Express Global Business Travel, for example, has more than 200 agencies signed up to its GBT Partnership Solutions division. They can use its booking tool, Neo, as one example, and it helps the agency fill gaps in its footprint. On this basis, it works with the likes of Kanoo in the Middle East, and Tourvest in South Africa.
But what does it make of ATPI’s entrance into the software licensing game?
“The timing of all this is interesting,” said Rajiv Ahluwalia, Amex GBT’s senior vice president of Partner Solutions & Supply MarketPlace. “One, because of what’s going on with Covid, it has challenged a number of players. Second, it’s interesting because of changes which are going on with New Distribution Capability as an example, which requires a fair bit of technology investment; if you’re a smaller player, it’s hard even understanding the strategies of what needs to happen.”
For itself, Amex GBT could ramp up this part of its business if its takeover of Egencia goes ahead. “Teaming Egencia with GBT’s Supply MarketPlace, one of the most comprehensive sources for content and experiences for business travelers, would give customers more choice and suppliers more access to business travelers,” it said in a statement. It’s now recruiting for a vice president for its GBT Partnership Solutions division.
However, one consultant has warned that for any agency selling its technology, it needs to ensure it’s mature and flexible. “There tends to be a leap between using a system within one business and then offering it out to a wider audience,” said Guy Sneglar, senior vice president, global travel technology integration, at Partnership Travel Consulting.
“Does it need to adapt to different markets, currencies, local requirements or business models? Possibly different global distribution systems too? The investment required to keep a solution competitive as you build a wider customer base can sometimes be significant,” he added.
Amex GBT’s Ahluwalia added that were many legal, compliance, data privacy and regulatory issues to work through to make in-house products stand alone with a third party. Then there are questions over the content that comes with the technology product, and different commercial structures.
“But the opportunity is there,” he said.
Over the years, branching out has proved fruitful, with some spin-offs taking on a life of their own. Managed travel technology platform Atriis, for example, was created in 2013 as a joint venture of Amsalem Travel, in Israel, and Portman Travel (acquired by Clarity Travel) in the UK.
“If you’ve got a good solution and decent financial backing to keep developing and pushing it forwards, there’s no reason why it can’t be successful as an independent business,” Sneglar added.