Travel distribution in newer dimensions
Keeping pace with the ever-dynamic nature and requirements of the new age traveler it has become mandate for the travel management companies to change. The small mom n pop / corner shop is no exception. The travel business is on a boom and the new business models are revolutionizing the contemporary means of doing business. This is indeed a challenging time of the legacy businesses to upgrade and deliver to the demand. The liberalization in economic policies has resulted in exponential growth potential.
New Business Strategy – Up Stream
The success of the low cost / no frills airlines is a good example of – ‘how thinking out of the box’ helps. This has opened newer avenues of reaching the client directly; bypassing the dominating travel agent community, which was not well received initially but eventually, the idea sold and did wonders for the early starters. Incidentally we can see that there was a B2C business model being implemented in the travel vertical, which was very popular in the retail sector.
New Business Strategy – Middle Tier
This was then recreated in the Middle tier (TMC/Travel agency) where there was clear need for consolidating the travel with leisure requirements. The role of a travel agent has been Travel planning and to offer their expert services in paving the path for a memorable get away or a suitable package. Study shows that with the increase of the Internet and the awareness of the travel products, today 8 out of 10 travel bookings are made online. Therefore the new generation TMC’s of the world decided to reach the customers where they are and offer their services online. Technology today makes this possible for the customers/buyers to visit the website, create their own multi-product itinerary (Air/Hotel/Car), make payments online and even print tickets and vouchers. Technology companies and TMC’s have joined hands in developing solutions, which are highly intuitive suggestive engines on the lines of Amazon.com. This allows the possibility of prompt cross-selling and ability to increase the size of transaction.
New Business Strategy – Traditional IT Enablers
The Predominant mediator between the Travel Principal (Airlines/Hotels) and the Travel Management Companies has been the GDS.
GDS - Global Distribution Systems comprise of Central Reservation System, which helps bridge the gap and provides real-time access of the travel inventory to the Bookers. This happens by a scheduled release of airline fares to all the GDS through a central body ATPCO and controlled access to the airline systems for bookings and confirmations. The Airlines today are in a comfortable position where they reach the clients directly using an ASP model compromising with the cost of inventory distribution on GDS. With the new business models the GDS business seems to be ones bearing the entire heat.
The way ahead for the GDS is to upgrade their legacy systems and to provide Converged/ Integrated, Open Source, End to End booking solutions to the evolving Travel companies.