Wednesday, July 13, 2005

The Future of the GDS

I wanted to take an opportunity to clear the air on my opinion of the "future of the GDS". In various articles I have been quoted as being critical on the pace of innovation of the GDS and their challenges in respect to moving to a new lower cost distribution model. I wanted to state that it is my belief that in the long term the GDS will continue to be a major force in travel distribution, despite the growth of so called GNE (GDS New Alternatives). The GDS market has been oligopoly and as such has not experienced significant technological competition, until recently. I have never questioned that each of the GDS companies are moving to more open systems. The issue is the pace of market changes and the speed by which each of these companies move their core transaction engine off the TPF mainframes and truly embrace a new open infrastructure.
The other key issue is the continued fragmentation of inventory sources, a phenomenon that conflicts with the traditional GDS single source model. Travel distributors (travel agents, TMCs, tour operators) need to gain independence from the GDS at the point of sale. Relying on GDS POS technology limits the distributors ability to access multiple sources of inventory and integrate external and internal sources of content in a seamless manner. The major TMCs (Amex, CWT , WorldTravel BTI), travel agencies (LibGO) and online wholesalers (Expedia) all have recognized the need for this POS independence and have implemented technology that access multiple sources of inventory simultaneously. The GDS are still an important part of this equation, just not the single source.

14 comments:

Renaud said...

What was true in 2005 is even more so today, in a time where the airline industry market is contracting pushing both inventory providers and distributors to look for way to cut cost and come up with innovative product offers.

GDS which have lacked behind in offloading legacy to open systems will be in even more trouble today, as the operating cost will continue to grow due to the continuous and exponetial look to book growth.

It will be tough for all GDS, however I feel that these tough times will be in the end beneficial to GDS which have anticipated and undertaken the technological shifts...Some will disappear and some may get bigger as a result.

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Relying on GDS POS technology limits the distributors ability to access multiple sources of inventory and integrate external and internal sources of content in a seamless manner.

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