Buyers Wary Of Costs From Distribution Fallout

Travel buyers are most concerned with the pricing implications of airlines', global distribution systems' and travel management companies' efforts to shake up the corporate travel industry's distribution dynamics, according to a National Business Travel Association survey of 237 travel managers released today.

While 90 percent said cost implications raise concern, booking efficiency and content fragmentation—as noted by 75 percent and 68 percent of respondents, respectively—round out the top three concerns.

NBTA said it shared the results with American Airlines and Sabre as well as Delta and Worldspan, which have yet to come to terms on new distribution pacts, raising concerns about access to content and its costs.

"Currently, there is no agreement between American Airlines and Sabre, and a $3.50 per-segment fee will go into effect Sept. 1 for all American bookings made on Sabre. Delta Air Lines and Worldspan are in ongoing discussions regarding their relationship, though a deadline is not immediately pending," NBTA said, noting that 71 percent of travel managers book American through Sabre or Delta through Worldspan. "If those airline-GDS pairs do not hammer out agreements on their relationships, those transactions will likely to move to other channels or those bookings will likely be made on other airlines," NBTA noted.

Travel managers are seeking ways to mitigate cost increases that are expected to result from the new airfare distribution landscape. Of the respondents, 24 percent said companies would take fewer trips, 25 percent would adopt such travel alternatives as phone, video- or Webconferencing, while 21 percent would increase the use of low-cost carriers.