MTBA/OVBTA October 13, 2006 Travel Distribution Fragmentation Robert Langsfeld The Corporate Solutions Group ® Incline Village, Nevada 775-832-5151 [email protected]

MTBA/OVBTA October 13, 2006

Travel Distribution Fragmentation

Robert LangsfeldThe Corporate Solutions Group®

Incline Village, Nevada

775-832-5151

[email protected]

www.thecsg.com


Reality Strikes !!

• The bills are starting to arrive• 80 C /transaction costs• ?? Participation• $2.00/ticket cost by agency• HRG is negotiating individually, but the fee

continues to be $1.98, $1.99, etc.• CTD’s hit hard

– Getting more in to the details– “Been living off of the benefits”

• Sharing the impact


What Are The Issues?

• New GDS Contracts

• Pricing

• Participation Variations

• Opting In/Out

• Distribution (aka Content)

• Fragmentation


Travel Procurement Department

OnlineAgencies

GDS Deregulation

Low Cost Carriers

AlternateGDS

Direct Connects

SouthwestTMC Consolidation

“Super” PNRCentral Collection Location

Distribution Revisited


Shopping(New Pricing Engines)

Selling

“Super” PNRCentral Collection Location

Direct pipeline to airlines

Traditional GDS

Agent DesktopTraveler

Self Booking ToolFinancial Management

Reporting

Non Participants (stand-alone websites or limited res. system participation)

DirecNetSkyConnect (LCC’s)

________________________________

United Airlines________________

US Majors (DirecNet)

New TM Process Options (Air)


The Move to Lower Cost Distribution


Economic Comparison

5

4

413

GDS charge

Inducement GDS margin

GDS costs


New GDS Contracts

• Most of the GDS’s have come to agreement with the Airlines– Participating Airlines– American, Continental, Delta, Northwest,

United and US Airways

• $3.50 per segment• “opt-in” agreements• Access to content


Pricing“Access through participation in the Super Access program incurs an 80 cents per-segment reduction in incentive income for users. The program and costs are comparable to the "full content" programs introduced by Galileo and Sabre.”

• $3.50, then what do you get in return?• Are there any other fees?• Are there any offsetting revenues?• What about “simple” tickets? • What about complex tickets?• What about international trips?• If you don’t pay, what do you get?• What do you pay if the airline is not participating?


Participation Variations

• The major, primary airlines are participating– What do you get?

• Is the information the same for each of the Airlines, GDS’s?

• What is promotional, private content?• What about the non-participating airlines?• “TMC proprietary technologies as a means

to shield clients from GDS program fees”


Opting In/Out• If you opt -in you get full access

– But do you?– Promotional, Private, Special Fares?– What else?

• If you opt-out, what do you know you are getting vs. not?

• Again, non-participating• Plus, these are in reference to the

agreements between some of the airlines and the TMC’s– How about you?


Distribution (aka Content)

• To get Legacy Airlines schedules, you new to”play”– But is your TMC playing?

• “Warner said such CWT-provided technologies as a self-booking tool are "component parts of a holistic, integrated solution.”

• If the airline is non-participating, then what do you do?

• Even of more concern, who is watching?– Auditing


Fragmentation

• Now we get in to a real issue• If information comes from varied sources, then

we are subject to “interpretations”• We are just staring out on our journey• The TMC’s are offering to “not charge” if you use

“this or that”– Now, if you are a current client-no– If you are a new client-yes

• Ex.- Merchant Model


The Future• “Things are a-changing”• Essentially a cost increase from the airlines to

the TMC’s– Make well formulas

• What is the next step? Steps??• Increased fragmentation• Bias• Hotels• Who is watching who, and why?• Ask to see the whole, not just the part they

are showing you


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Documents

MTBA/OVBTA October 13, 2006 Travel Distribution Fragmentation Robert Langsfeld The Corporate Solutions Group ® Incline Village, Nevada 775-832-5151 [email protected]