A Virtuoso cAse study:Agency Debit Memos

Overview: Virtuoso is a leading luxury network of expert travel advisors and partners (hotels, cruise lines, tour operators, etc.) which provides customers with an unforgettable experience full of exclusive perks and world-class customer service. Virtuoso takes great pride in its advisors who aim to maximize the value of a trip through their wide array of connections and vast industry knowledge. Due to its unique business model that yields complex itineraries, Agency Debit Memos (ADMs) have historically been a challenge.

A cAse study Virtuoso

BAckgrOunD: In September 2015, Virtuoso partnered up with Sabre to accurately identify the root causes of Virtuoso’s ADMs and associated expenses. To provide Virtuoso with more time to sell, Sabre and Virtuoso determined the best solution to decrease generated and paid ADMs and to significantly reduce the time spent researching contracts and calculating commissions.

ApprOAch:

Prior to the engagement, Virtuoso shared two years of ADM data with Sabre for analysis before conducting onsite interviews with key players. This approach helped pinpoint root causes of their most challenging ADM issues.

Research Phase Solutions PhaseData

Collection & Onsite Visit

Analyze Assess Opportunity Potential Solutions Implement Manage Measure

• Objectives• Metrics

• ARC• Sabre

• Interviews• Observations• Virtuoso Business

• Data Analysis• ADM Challenges• Root Cause• Best Practises

• Prioritization• Importance• Impact• Cost Benefit

• Creative Solutions• Testing Concepts• Tools• Processes• Services• Business Case• Metrics

• Project• Process• Metrics• Coaching• Feedback

Research Phase

Data Collection & Onsite Visit Analyze

insights: As a result of the engagement, Sabre provided the following insights:

• Metrics - such as the number and amount of issued and paid ADMs broken out by reason and carrier

• Root causes

• An estimation of under-collected commissions

• Operational process maps, metrics and improvements

• A detailed understanding of operational expenses associated with ADM creation and management

• Strategic options to mitigate ADM exposure

A cAse study Virtuoso

recOMMenDAtiOns (Potential outcome):

Virtuoso collaborated with various Sabre teams to customize solutions that would optimize Sabre Automated Exchange and Direct Fare Filing in order to position Virtuoso to:

• Reduce the total amount of ADMs paid and the average paid ADM per ticket by 51%

• Reduce commission ADMs (from inaccurately applied commissions) by 76%

A cAse study Virtuoso

OutcOMe: Virtuoso’s bottom line has significantly improved. When comparing Q1 2015 with Q1 2016, overall ADM volume increased for tickets completed on non-Sabre GDSs. However, ADMs issued on Sabre tickets decreased by 64% and the amount of these ADMs decreased by 57%. Similarly, commission ADMs issued on Sabre tickets decreased by 68% and the amount of these commission ADMs decreased by 66%.

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POtentIAl OUTCOME ACtuAl OUTCOME

Reduce the total amount of ADMs paid and the average paid ADM per ticket by 51%

• ADMs issued on Sabre tickets decreased by 64%

• The amount of these ADMs decreased by 57%

Reduce commission ADMs (from inaccurately applied commissions) by 76%

• Commission ADMs issued on Sabre tickets decreased by 68%

• The amount of these commission ADMs decreased by 66%

“Since working with Sabre’s analysts, debit memos have seen a dramatic decrease. The insights provided by Sabre’s analysts have proven to be a substantial benefit to our business. Commission quoting accuracy is now 90 percent and fare/commission quoting time has decreased from 15-45 minutes to a matter of seconds.”

SteVe WooSteRDirector of Services and Air Operations at Virtuoso

Virtuoso is also well positioned to observe the following workflow efficiencies:

• Exchange processing time is expected to decrease by at least 80%

• Reduction in commission calculation time of over 60%

• Reduce the time taken to check commission calculations by approximately 67%

ADM management costs are expected to decrease by 49%