Both Orbitz and Travelocity this week announced new leaders at the helm.
Orbitz now has a technology savvy, operationally capable, marketing focused executive who is talking already about social media, which could imply new models afoot for the OTA. Orbitz had been outpaced by Expedia and Travelocity in the advertising model/social media capabilities, but does it really help them materially to do a "me too" offering to match Trip Advisor and iGoUGo?
Just weeks ago, Amadeus founding CEO Jose Tazon stepped down from the CEO role with David Jones, his number two taking the helm. Company veteran Philippe Chereque moved from his role as head of strategy to become the company's Chief Commercial Officer, replacing Jones.
Sabre puts its own COO at the helm of Travelocity, not replacing him in the Sabre organization, but instead splitting his job amongst his peers.
Is it time to go from 3 GDS companies down to two or are the firms just further tightening their belts for their private equity owners?
I am trying to decide whether this more closely resembles the astronauts running out of oxygen in Apollo 13 or is it more like Sid and his buddies in Ice Age, with the temperature around them changing, wondering if the woolly mammoth can hold on?
OTAs are now quite mature at more than 10 years old (with Orbitz being the baby of the bunch at just under 9 years old). The GDSs are the granddaddy of the industry at 30 years old on average (with Amadeus as the baby at just under 20).
Their models are old and tired and fraught with challenges as the air travel sector (whom they all depend on for as much as 90% of their revenues) contracts with the economy. Just 15% of all travel in the US is by air and just 22% of all spending is done by air travelers (according to the recently renamed Travel Industry Association nee USTA). That number isn't expected to improve anytime soon, as airlines continue to contract their networks and reduce both frequency and capacity.
Travel suppliers continue to push online shoppers to shop on their own sites, leaching business from both the OTAs (which actually makes financial sense for them) and from the traditional travel agent (which makes no sense whatsoever as outlined in previous posts), which impacts the GDS directly.
The OTAs and the GDSs must open their eyes beyond the air traveler to support the drive market, which represents 85% of all trips annually and 78% of all spending. For the 10 and 30 years that these folks have been around, the air traveler market has been sufficient and it has been good to them, with double digit margins.
With the pressures from shareholders - whether IAC and the public at Expedia, or from Blackstone and TCV for Travelport and add in the public for Orbitz, or TPG and Silverlake at Sabre/Travelocity, the OTA business and the GDS industry has to expand its horizons and realize that the ecosystem is changing.
The good days are over Sid.... the wooly mammoth IS in danger. And the air is getting very thin in the spacecraft for Apollo 13 astronauts.
Time for a change. Where will it come from?
In reference to " Richard Anderson, Delta Air Lines (5Q Interview) " As a follow on to my earlier article last week about doing...
I am now going to shift gears away from online technology and the role that they play in the travel distribution ecosystem to a topic that I...
You fully understand that rung #1 of the ladder is spamming and you've gotten past rung #2, noise. You get it -- that in order to reall...
UPDATED - March 12, 2014 Well, in the world of travel distribution on the OTA side of the equation, if Travelocity was the "come...
Part 2 of a 2 Part Series on Individual Relationship Management (IRM) versus Customer Relationship Management (CRM) which is flawed B...
2011 starts today – The Era of Social Commerce is here - Solutionz Media and GuestCentric Systems partnership announcedIn the "The Future of the Social Web," report released by Forrester in April 2009, by Jeremiah Owyang, a Forrester senior analys...
This week, Bloomberg announced that Sabre raised $627 million in its IPO. Actually I don't think you should be allowed to call ...
If you are familiar with the game of dominos, there are dots on each domino and the placement of a domino on each turn requires that you mat...
Although the customer is now decidedly multi-channel, the components of the travel cycle have not really changed over the years. ...