WHY AGENTS ARE ‘KINGPINS’ IN THE SERKO MODEL
DARRIN Grafton’s travel industry background ensured that he made travel agents the “kingpins” in developing the Serko business model. Prior to founding the online booking company with business partner, Bob Shaw, Grafton worked for major New Zealand travel wholesale/retail conglomerate Gullivers where he was in the front line of developing systems for both leisure and corporate travel operations. In 2007, when Australia’s MFS (later to morph into Stella) took over Gullivers, Grafton and Shaw saw an opportunity to “acquire the assets” they needed and “build Serko from the ground up”. “I have always understood how that market (travel agents) works and built tools in which travel agents are pivotal,” he said. That philosophy has also shaped the way Serko markets its corporate online booking tools. The Auckland-based company, which writes around 95% of its business in Australia, does not sell direct to corporates. It uses travel management companies (TMCS), including most of Australia’s major agencies, as re-sellers. “For us, the agent is kingpin,” said Grafton. “They re-sell, or license, the technology on our behalf.” A major step for the company earlier this year was its $NZ22 million float on the New Zealand Stock Exchange. An overwhelming response to the Initial Public Offering (IPO) saw it close 23 days early. Eventually the company will also list on the Australian Stock Exchange, although the timing of this move has yet to be confirmed. It’s been an exciting time, said Grafton. While the vagaries of Stock Exchange trading mean he is not necessarily happy with the current share price, “the important thing is we now have the money we need to continue developing Serko”. A key focus for development will be handheld devices. The company has recently released technology enabling travellers to change bookings and itineraries while on the move ( travelbulletin, June). Grafton also sees a big future for Serko’s patented “tap and go” technology which, he says, will eliminate the need for corporate travellers to carry receipts. Grafton told travelbulletin: “We are putting technology into the palms of travellers’ hands so that agents are always benefiting from it, not being removed from the process.” Other key developments for Serko include the acquisition earlier this year of Sydneybased online expense management company, Incharge. The move recognises that travel makes up a third of the expense budget for corporations. Combining Incharge and Serko technology produces “a truly remarkable integrated travel and expense solution”, Grafton said. The new module gives travel administrators the ability to book an unlimited number of flights simultaneously, directly from their desktops. While initially aimed at the FIFO market, Grafton said it is exciting to see the many uses that TMCS are now finding for the technology as they adapt it to their own group booking requirements.