Vision 2020: Old Dogs, New Tricks And The Future Of GDSs - Business Travel News

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Vision 2020: Old Dogs, New Tricks And The Future Of GDSs

November 22, 2013 - 01:20 PM ET

By David Jonas

Are global distribution systems dinosaurs or the persevering linchpin of corporate travel management? To some extent, they are both. They'll need to shed characteristics that create perceptions of the former if, in seven years' time, they are still to serve as the latter.

One not-so-new school of thought suggests the era of GDS hegemony in the corporate travel distribution chain is in inexorable decline. Primary arguments relate to their expense to suppliers and what some see as anachronistic GDS-travel management company economics; their position between suppliers and consumers, which interferes with the direct relationships suppliers want; and, of course, accelerating technology that has enabled countless booking alternatives.

BTN survey respondents in aggregate see reliance on GDS channels waning by 2020, with fully half expecting their relevance to decline compared with 12 percent expecting the opposite.

Steve Reynolds, CEO of hotel booking site tripBam and a longtime corporate travel industry tech executive, thinks GDSs won't exist at all in seven years. "You won't have this thing called the PNR," he added.

Instead, some point to the ease of direct supplier channels, B-to-C-oriented booking sites and one-stop shopping portals not necessarily tied to any GDS; supplier desires to customize offers in ways that GDSs can't yet completely accommodate; and the promise and agility of mobile tools.

Direct supplier connections—or the like, including some through corporate booking tools—already have a place in certain areas of corporate travel management, especially for hotels, and more are coming.

"Every day that passes, more stuff is implemented outside the GDS," said Al Lenza, a longtime airline sales and distribution executive who now consults with travel companies about e-commerce strategies. "There's going to be a ton of new features, products and enhancements that you can get only by using new technology, and the GDSs won't have it." Noting how TMCs are "glued to the GDSs for financial and convenience reasons," Lenza suggested both are "getting left behind" and added that "there will be some resistance for the foreseeable future, but eventually better processes win out."

Some corporate buyers and agencies are getting antsy. They say that while distributors are making progress, it's occurring too slowly.

"The technology is not there yet," said Short's Travel Management CEO David LeCompte in October at The Beat Live conference. "It's not the airlines' fault or the GDSs' fault, it's just the industry lagging. We really can't merchandize today; it's very difficult. I want to sell those things for the airlines."

Making A 'Modern-Day Tool' 

There is another school of thought: Setting aside everything else GDSs do for travel suppliers in terms of IT and infrastructure, they will maintain their key role within corporate travel, by virtue of a well-entrenched position that still provides plenty of value and never-ending work to enhance systems.

This is how Sabre Travel Network president Greg Webb laid it out: Airlines are "trying to decommoditize their product so people can choose how to spend their money on value-adds and upsell." That, he said, is driving up "look-to-book ratios" as consumers "are shopping more, not less." Therefore, the service provided by Sabre (and Amadeus and Travelport) "is needed more greatly today than it was in the past because people need to comparison-shop effectively," Webb said. "And on the corporate side, they need the ability to ensure that they meet their duty-of-care responsibilities.

"It may be some of those services happen in different places," Webb continued, "but the function of providing a digital marketplace that brings together buyers and sellers to allow for the smooth processing of travel transactions, that capability will still need to exist."

Travel Leaders Corporate president David Holyoke isn't expecting a major change anytime soon. "Whether there is fragmentation today or might be more tomorrow, the GDSs are always going to represent the lion's share of content in distribution," he predicted. "But they are going to have to look a little different."

That means systems that can handle richer content, bundled and unbundled products and services and personalized offers. Webb said Sabre supports technical standards to facilitate sales of all types of travel supplier products and services at all points in the travel cycle. "Inside the booking window, we absolutely are looking at shopping by attribute, we are looking at new displays that allow for differentiation of the product—more information about your flight, etc.," he said. "We'll continue to enhance that. It's keeping up with how people are buying and making sure those offers are available when they are most likely to buy."

Maybe, at the same time, GDSs evolve through a sort of consolidation. "The functionality of the more consumer-type front end will keep improving to the point that a lot of GDS companies will acquire those that have the technology for the leisure traveler or the search engine," suggested Cindy Estis Green, co-founder and CEO of Kalibri Labs, a hotel data consulting firm. "They'll end up, through merger and acquisition, evolving into a more modern-day tool."

Other visions of the future directly place the power and content scope of GDSs into end users' hands. "We'll see more expansion among the GDSs to become a direct corporate booking tool" rather than a tool used exclusively by TMCs, predicted Jerry Behrens, senior vice president at Travel Leaders Group and at TLG's Tzell Travel Group division. He added: "What's to stop Sabre from making Sabre Red available to the public?"

Whatever they look like in 2020, GDSs will be part of a travel distribution chain that ideally is more seamless, easily connecting supplier-direct channels, aggregators, front-end booking tools of all kinds and powerful search engines.

Regarding searching, Green envisions engines "tailored for leisure and tailored for corporate, and they will be further refined over time. Instead of having 90,000 responses to a Google search, you'll end up with a much shorter list. On the corporate side, it will be even a shorter list because of the constraints that a company might put in."

With such search technology, and many connectivity options for linking buyers, intermediaries and sellers, it'll just be a matter of fitting the pieces together.

"The next two or three years are really going to be focused on integration methodologies," said Farelogix CEO Jim Davidson. "Everything, from the booking process through the inflight process, is going to be much more synchronized. It's going to be a ballet, rather than a combination of different dances, different venues, different eras—as it is today. Today, we're the clumsy high schooler asking the girl to the dance."

This report originally appeared in the Nov. 11, 2013, edition of Business Travel News. 

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