Thursday, September 4, 2008

Booking Channels are Changing - GDSs Left to Compete with Internet

It's no longer news that there is a major move on for people to now book from the internet. Travel agent and voice bookings have been in a steady decline for many years now and hoteliers have been happy because the cost of taking a reservation via the internet is usually at least half of what it cost via GDS and more via phone.

One has to ask, when do the GDSs start charging more for the connectivity to there systems and Travel Management Companies start charging more to cover their bookings costs to make up the short fall in revenues. This article from Business Travel News Online highlights the inducements that the GDSs are making to Travel Management Companies and airlines to keep them booking. The article goes on to talk about the Sabre Expedia relationship and how that has reduced GDS margins and set the new market price point for services. Ironically, this parallels what has happened to Expedia as suppliers have taken back control of pricing and inventory.
"There is more risk related to GDS economics than there has been in the past," said Carlson Wagonlit Travel executive vice president of global supplier management Mike Koetting. "TMC margins are small enough that almost any disruption to our revenues ultimately impacts our ability to service, or requires a cost increase to, our customers."
The potential for a price increase and level of service change is emminent in my mind.

Technorati Tags: , , ,



My Blog List


Hotel eComm Insights © 2008 Business Ads Ready is Designed by Ipiet Supported by Tadpole's Notez