For years a standard travel e-commerce approach to online booking involved licensing a "booking engine" for the Website. These booking engines began as a front-end to the GDS allowing the consumer to book air, car and hotel online. As travel e-commerce became more complex, booking engines often added business logic and customer profile information. An alternative trend to enable Website booking capabilities has an emphasis on the a robust middleware application. With this approach, the booking engine is nothing more than a presentation layer that sits on top of the middleware software and relies on it for all of its communication and business logic. The same middleware layer powers call center applications providing a common platform for online and offline customer interaction. A robust booking engine which contains customer profile information and business logic limits the use of the these functions for offline call center agents. Despite the hype around touchless travel, the offline customer agent still plays a critical role in travel e-commerce, especially for complex itineraries. Allowing this agent to pick up and complete partial reservations created by the consumer is an important role and turns call centers into customer care centers. This trend towards a robust middleware application continues to grow with many vendors providing this new functionality.
Tuesday, February 21, 2006
Thursday, February 09, 2006
When I launched my consulting practice in 1995, many of my early clients (Carlson Leisure Group, Broadvision) focused on using personalization techniques for travel planning and booking. It is surprising that now in 2006, we've still seen few efforts by the major travel players to filter queries and deliver more personalized information for their customers. There are some obvious concerns about embarking down a personalization track. Consumers have little patience to fill out detailed preference profile forms (as well as privacy concerns) and attempts to determine preferences implicitly often alarms consumers that "big brother" is watching. Despite these obstacles, I am still convinced that personalization has a role in travel planning. Currently a basic knowledge of past itineraries is not being used to predict future choices. If you are working on personalization techniques for leisure or corporate booking systems, please let me know as still believe that providing filtered content that meets customer's needs can improve the efficiency of online booking and value to the end consumer.
Thursday, February 02, 2006
I wanted to further clarify my beliefs regarding the changing travel distribution environment. First let me make one point clear, I do not believe the GDS will "replaced" by the so called GNEs. A more realistic scenario is that both GDS and GNEs will exist as low cost distribution channels. The debate should not be framed around GDS verses GNEs. Instead the issue concerns the point at which travel content is aggregated. Whether the major industry players are willing to admit it or not, we live in an environment where inventory is already fragmented. Here are just a few examples to prove my point:
1) LCCs such as Southwest airlines cannot be purchased online other than at southwest.com
2) In Europe where 80% of the hotel inventory is from independent properties a majority of these properties are not in the GDS and therefore not available through traditional GDS-based booking engines. This applies to rail and ferry travel as well.
3) The major TMCs such as WorldTravel are investing millions in a new platform (project Renaissance) that will aggregate content from multiple inventory sources.
4) Large leisure agencies (e.g. Liberty Travel) have also been investing heavily in infrastructure changes to accommodate the new multi-source environment.
At the end of the day, suppliers (air, car and hotel) must have the right to chose how they want to distribute their product and at what price. This is basic market economics which has been masked by a distribution environment controlled by a few large entities (the oligopoly that has been the GDS). The Internet has permanently changed distribution by opening new and emerging channels. The GDS will continue to be a major source for travel inventory, just not the ONLY source.
Wednesday, February 01, 2006
It was nice to be quoted in a today's Reuters' article. Unfortunately , the reporter became confused between the definition and concept of a GDS and that of an online travel agent. Though there is a connection between online travel and the GDS, (Travelocity and Orbitz are owned by two of the GDS, in the case of Cendant they own both Galileo and Orbitz) the way the reporter tied the two together is incorrect and misleading. The issue is about distribution and value, not online travel. Considering Orbitz's direct link technology, they themselves are already bypassing the GDS. My comment about leakage stands. I believe we will see some inventory go through GNEs in 2006. The real question to ask the GDS, is how low can you go? Is there a floor on their ability to match GNE pricing? What role does technology play in setting distribution costs? The GNEs say it plays a major role. The GDS says its all about price. We'll see who's right this year...