As Brazil becomes a more significant travel management target of many multinational corporations, many struggle with travel content complexities that remain a roadblock to corporate travel technology development.
In 2005, the two largest Brazilian carriers, TAM and Gol, pulled all their domestic content out of the GDSs, removing more than 90 percent of the country's total domestic inventory. In lieu of the traditional GDS model, TAM and Gol required that bookings at the Brazilian point of sale be made through their direct channels, including their Web sites.
To entice travelers to book direct, TAM and Gol last year detached commissions from fares booked through the direct channel. Bookings through travel management companies carry as much as 10 percent commissions as part of the fare.
Today, 85 percent of Brazilian airline and hotel content is outside of the GDSs, although a lot of hotel inventory resides in CMNet, a hotel booking engine. The lack of access to airline and hotel content through a centralized system has stunted corporate online booking tool growth, which has settled at around 10 percent, according to GDS and TMC executives.
Brazil and Mexico alone drive more than half of the travel business in Latin America and the Caribbean, according to Sabre Travel Network senior vice president of the Americas Jay Jones.
Until the global economic crisis slowed corporate travel passenger volume growth to just 6 percent last year, the country experienced several years of double-digit percentage-point increases, according to Travelport Brazil country manager Sidney Alonso.
Meanwhile, the airlines' GDS pullout increased agent processing times and in turn transaction fees. A domestic transaction previously took 2.5 minutes to complete, but now averages more than nine minutes, according to Alonso.
Faced with massive losses of content and decreased incentives and commissionable bookings, travel management companies and GDS providers developed their own single-entry aggregated content portals.
"When they left the GDS, our operational costs increased a lot," said Fernando Vasconcellos, director of sales for FCm Travel Solutions' Brazilian partner Kontik Franstur.
In 2007, Kontik, which processes $200 million in annual travel sales, built its own booking engine, which melded content from the airlines' direct Web sites and the Sabre GDS.
Amadeus and Sabre Travel Network also built new booking engines to incorporate all content, albeit not in their host systems. Travelport this spring is releasing the corporate version of its Panorama system, which it has been using for leisure travel.
Even with the consolidated content, the lack of consistency creates a difficult operating environment for TMCs, GDSs and corporate travel buyers trying to manage growing programs.
According to Alonso, out of the 65 million segments booked in Brazil last year, the three GDSs only processed 12 million. "The bottom line is that we have no relevant domestic content in the system," said Alonso. "Last year, TAM also took away some international routes out of Brazil. They are available, but it does not count for any commission or incentive, so agents cannot move on and make the booking."
Although the largely regulated air travel market is dominated by TAM and Gol, which own about 50 percent and 40 percent marketshare, respectively, according to Brazilian government statistics, competition from some low-cost carriers, including JetBlue founder David Neeleman's new Azul Brazilian Airlines, which launched in December, have created a new dynamic.
Yet, those smaller airlines only make up about 5 percent of the market and do not have a big enough domestic route structure to really impact the competitive arena, said Amadeus marketing director of Latin America Claudio Altieri. Azul's home airport, Sao Paulo's Viracopos-Campinas International Airport, is about 100 kilometers from downtown Sao Paulo, making it a less desirable location. "It's a predictable market," said Travelport's Alonso. Prices will go down and up, but its artificial because it is all based on TAM and Gol and their size."
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