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Wednesday, July 20, 2011

Answer Series: AIRLINE PERSPECTIVE - What do I have to do if agency distributors have multiple GDS/booking sources?

In our industry, we are a complicated ecosystem.  When one part of the ecosystem makes a move, another part of the ecosystem is impacted.

Our question today is "What do I have to do if agency distributors have multiple GDS/booking sources?"    According to an ASTA Survey on GDS use in 2010, 13% of agencies have more than one GDS.

There are significant operational implications to having multiple booking sources.  Everyone is impacted, from the airline, to the GDS, to the agency, to the consumer.


  
While many of these are related, they change based on your perspective.  Let's look first at the Airline Perspective and over the course of the rest of the week, we'll look at the GDS, the agency and the consumer.


AIRLINE PERSPECTIVE
If you wish to have the travel agency and TMC community book your flights directly, versus through a GDS, you have to think about the following:
  • Their motivation and willingness to do what you are asking.  If you are not paying them a commission for the booking or providing some other incentive, they may be less than thrilled at taking on the operational hassle  (see AGENCY/TMC PERSPECTIVE)
  • Determining how you will attract more business if the agency elects instead just to shift their business to another carrier that does participate in their GDS.  
  • Keep in mind that the agency/TMC has to provide a consolidated itinerary to the customer and may need to put a passive segment in the GDS that houses their customer information and  interfaces with their accounting system. 
  • Investment in the tool(s) that you will use to provide them with access to your inventory, availability and pricing.  You will likely need to do some development to keep track of all of the business relationships and access permissions, as well as what rates and availability you want to show each of your distribution partners.  This has largely been managed by the GDS in the past.
  • Proactive participation in tools like TripIt and Traxo, so that the customer can have a way to get a consolidated itinerary.
  • The additional service personnel that may need to be added to your help desk to service those that are directly connected to you.  Again, the GDS has handled all of the connectivity issues in the past with their agency/TMC help desk. 
  • Interline agreements cover your interline baggage handling, but if your segments are in your own internal system record and your interline partner's segments are in the agency/TMC's GDS system, there may be both customer service problems and operational problems at the airport.
Airlines must remain diligent in looking at your overall profitability by channel and ensure that as you attempt to shift business to your website directly, that there are no unintended consequences of that move (e.g. reduction in overall profitability per ticket issued).

Tomorrow, we will look at the GDS impact.

Stay tuned.

4 comments:

thodges3 said...

Hello!
Dear blog author, could you explain me please one thing:

If we are sell hotels online than what the diffrence:
-to work through ultradirect
Or
-to work through galileo, for example?

I can't to find answer tothis question, help me to understand, please?

Chicke Fitzgerald said...

Thanks for your question. If you want to reach the tens of thousands of agencies globally (14.5k just here in the US), then you will effectively need to participate in all of the GDS Systems (Travelport's Apollo and Worldspan in the US and Galileo in the balance of the world, Sabre and their partner Abacus who markets in Asia/Pacific and Amadeus). By working through Pegasus ultradirect, you can connect once to them and let them deal with the nuances of each of the GDS platform. You will still pay the GDS booking fees for each booking that comes from the agency channel, but you should see a higher average daily room rate than you get just via your own website.

thodges3 said...

Good morning!
Thank you very much for answer.
But there is one important moment.
I'm a manager of website, that lets users book hotels online. We are working for two years already but only on russian and CIS cities. We have our own booking engine and now we are planning to go worldwide and we didn't work with GDSes yet.

So, could you please answer to my question again, considering, that we are not a hotel?

I mean: what the difference for an OTA:
-to work through ultradirect
Or
-to work through galileo, for example?

Chicke Fitzgerald said...

I am so sorry that I didn't see your second questions. Just realized that they go to my gmail account versus my primary email.

It all boils down to the number of properties that Pegasus UltraDirect and Travelport/Galileo have that you require for your region and what economics you are able to negotiate.

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