Sunday, October 07, 2012

Top 10 Travel Distribution Fallacies - #7 GDS (and travel agents) are dinosaurs

GDS (and travel agents) are dinosaurs

GDS and travel agents may be part of the travel distribution heritage, but they are not extinct.

If the longevity of the dinosaur is any indication, both the GDS and travel agents will be with us for some time to come.

In the last decade we have gone from 4 major Global Distribution System companies to 3 and have gone from nearly 30k U.S. travel agencies to just under 14k, but those that remain are larger than their predecessors on average and stronger.

Although challenged by the hyper–growth of the Internet, social media and mobile and the shift of business to new online and niche players, each are utilizing the Internet in new, heretofore unforeseen ways to expand their businesses.

While some may argue this point (yes, you Jim Davidson!), there has been an enormous investment in technology infrastructure by the GDS and those technologies that have been referred to as "legacy" have largely been replaced.  TPF is still in use for some functions, but it is no longer the dominant technology used by the GDS companies.

I do acknowledge that there is significant business model reform still needed in the industry.

I also believe that the airline industry has the right to have its own inventory aggregator/distributor (similar to what the hoteliers did with Pegasus).

But the bottom line is that I still believe that high value demand aggregation is the primary value provided by both the GDS and the travel agency and value tends to survive, despite opposition.

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