Airfare Disparities Remain In GDSs

Two years after the major global distribution system providers struck new deals with U.S.-based legacy airlines to deliver their "full content" to travel buyers, questions still swirl over whether content has been adequately defined and consistently delivered.

Audits conducted by Topaz International show wide fare disparity in content pulled from the four major global distribution systems. The audits in some cases show differentials between the lowest fares available on the same citypairs among various GDSs in excess of $200 on domestic fares and $1,000 on international fares.

The most recent audit, conducted earlier this year, examined 250 "typical business" citypairs with seven-day, 14-day and 21-day advance purchase options. Topaz CEO Brad Seitz said the firm strived for apples-to-apples comparisons—inputting the same citypair, booked at the same time with the same number of connections for the same schedule.

The prices, however, were not the same. Seitz said Sabre returned the lowest fare 74 percent of the time, with Worldspan at 71 percent, Amadeus at 62 percent and Galileo at 34 percent.

Seitz said all GDSs at one time or another have commissioned the firm to conduct audits, setting the criteria in some cases to demonstrate their shopping strengths, but data shared with BTN came from a Topaz-initiated audit of the four GDSs—independent and unfunded.

"Full content" gained prominence in the corporate travel lexicon in 2006 when the GDSs renegotiated content deals with airlines. The major legacy carriers promised full content to GDSs in return for a reduction in per-segment charges. GDSs made up the loss in revenue through opt-in programs that charged travel management companies—and therefore corporate customers—new booking fees.

"I ask the customers out there what they think full content means," Seitz said. "It's fairly simple, they say: It means everything is in there. On the other side of the fence, they're not really willing to put up a definition. That's what drove this whole thing. What bugs me, on behalf of travel managers, is when you're asked to pay for something, you hope you're getting what you're paying for. The GDSs put a cost on the agencies and the agencies basically passed the cost to the corporations and they're not necessarily getting what they want."

Several GDS and TMC executives said fare disparity among the major GDSs indicate variance in technological capabilities, rather than commercial agreements or varying definitions of "full content."

Sabre CEO Sam Gilliland said "there are some pricing and shopping systems that are better than others." He noted, "this is a complex business with fares that are changed on a daily basis. You are going to see differences in the capabilities of the systems and the algorithms they use to find the lowest fares. There may be occasions where fares that should be in a system aren't in all the systems."

President and CEO of Amadeus North America Kay Urban agreed that the fare disparity in competing GDSs "doesn't have anything to do with the agreements," rather "it has to do with the processing, how the technology is functioning, etc."

Executive vice president of technology at HRG North America Ted Brooks also said the disparity hinges more on capabilities than definitions or commercial agreements. "Most GDSs are getting feeds from the same sources. So most of the time it comes down to capability and what you are looking at in how many results it's returning and how it's constructed," Brooks said. "Typically, I don't see that this GDS has this fare and the other GDS has this one. It's more of a capability issue as to the fare construction or an issue around how they built the connection."

Still, a definition of "full content" has been elusive.

Sabre's Gilliland said "there is a lot of definition in the contracts that we have with the airlines as to what full content means." He said that includes "very specific terms that govern which types of fares that should be in the system." GDS executives would not get into the terms of the contracts or specify the language around full content. Major travel management companies also supplement fares with proprietary content and private fares negotiated with airlines. That means what Topaz sees in the public display may not be the same content corporate travel buyers gain through their TMC.

Andrew Winterton, senior vice president of global supplier relations for American Express Business Travel, said the GDSs have supplied more content than before the redrawn agreements in 2006. "It is very safe to say we have through the GDSs more content available to American Express now than previously," he said. He noted, however, American Express through its TravelBahn system chose to "have more control over our destiny by having our own distribution system model, which allows us to be complementary in adding content to our systems globally."

Carlson Wagonlit Travel executive vice president of global supplier management Mike Koetting said, "In our experience on the major carriers, we believe there is essentially full content. In a marketplace as broad and diverse as the travel industry, it's an unrealistic expectation to be able to put 100 percent of all content for all suppliers in one system. What we can expect and what we should strive for is to provide logical content for the business purpose of the travel consumer."

Several travel buyers during a Corporate Travel 100 benchmarking summit in New York this month said they feel comfortable with the level of content displayed through their channels. "It feels like we're getting full content. Sure, some of it doesn't get there, but it's negligible," one corporate travel buyer said.

Several TMCs agreed, noting that more important than "full content" is "relevant content." CWT's Koetting said, "The travel industry has more transparency in terms of price, content, availability and choice than any other industry on the planet. That it's not 100 percent complete doesn't make it less relevant or useful."

"The issue right now," HRG's Brooks said, "is if there is fragmentation or they commoditize the service that they offer, are we able to get the content that we need from the GDSs?"
—Seth Harris contributed to this report