The issue came under intense discussion during the recent IT&CMA/CTW Asia-Pacific Double Bill in Bangkok.
NEW Internet booking systems promising lower costs for airlines and hotels, easier analysis of trends and customer data and greater transparency for clients, are poised to give stiff competition for aging global distribution systems (GDS).
New booking software emerging on the market, such as Carlson Wagonlit Travel's (CWT) Symphonie and ITA Software's QPX system, are allowing clients greater flexibility to change and reorganise the component elements of an itinerary, and to make a more detailed analysis of company travel trends.
In addition, costs are being lowered for hotels and airlines as the companies that produce the new booking tools rely less on per booking charges and more on software licensing for their revenue.
While airlines are paying as much as US$12 per booking via GDS, the same booking on the new Internet shopping and pricing systems that source their tickets directly from airline and hotel inventories runs between US$3 and US$4.
TravelTech Consulting president, Mr Norm Rose, said the rise of Internet bookings in the past few years had seen the GDS product broken down into multiple channels, with airlines, hotels and other products increasingly booked separately. "Now, companies like Orbitz, G2 Switchworks and CWT are stepping in to unify these channels again on a new type of system, with lower costs in terms of programming and CPU storage than the typical GDS, which runs on narrowband technology dating as far back as the 1960s."Mr Rose predicts in the next five to seven years, the industry will be switching away from a GDS-centred model to a business model where large travel management companies using the new software products become the primary point of sales for modular, more flexible products.
NBTA (National Business Travel Association) immediate-past chairman, Mr Kevin Iwamoto, said industry operators should keep up with the latest technology and trends in order to survive in the changing travel environment. "The GDS business model is being replaced by a new breed of Internet booking tools that are not dependent upon legacy mainframe pricing systems. There is a huge motivation for airlines to move to these companies that derive their income from software licensing rather than bookings." Amadeus e-commerce director, Mr Peter Smith, countered this statement, saying companies such as Amadeus had much more to offer than a simple GDS.
"New technologies are coming along all the time and I remember when our new IBM was the size of a minivan.
"New technology is not the key to success and a company that relies on keeping up on all the new software is just treading water."
Instead, he advocated evolution of policies and services.
"While US companies are working to eliminate costs and European companies are working on increasing efficiency, the real issues for Asia-Pacific operators are value for money, flexibility and good service," he said.
BTI Singapore general manager, Mr Greg James, said a balanced approach would benefit TMCs in the future. "TMCs that stay on top of both new technology and changing service trends will continue to have a place in the international travel economy. The sharks are circling and operators must work to get more out of existing products."
