While most of GDSs kept traditional tools, innovative third-party technology providers such as PASS Consulting Corporation (PASS), TRX or G2 SwitchWorks – the last two sold their technologies already – released new POS desktops and early introduced new technologies that would soon satisfy travel agencies’ needs: multi-GDS connection and graphical user front-ends.
As for the three main GDS, their increasing interest in new front-end tools highlights the key role of dynamic third-parties in fostering innovation with products ahead of their time, and later on attracting bigger players in new markets. As a matter of fact, even though Travelport, Amadeus, and Sabre’s products are drastically different from travel agencies’ green screens, there is little innovation, as they utilize a technology that has been already used before. However, the fact that these GDSs are trying to close the gap, reflects how point-of-sale desktops, either they are going graphic (Sabre) or multi-source (Travelport and Amadeus) are in the forefront of travel technology providers.
Some of the world’s largest travel management companies made some strong moves for a bigger independence from GDSs. Hogg Robinson Group (HRG), for instance, internally built a platform enabling them to connect to other content providers next to the global distribution systems. In the same way, Carlson Wagonlit (CWL) developed its Symphony platform for a huge cost of $50 million. Travel agents were already demanding for new technologies that offer gains in profitability, productivity and independence from GDS. This is clearly what PASS VTO was all about. Back in 2003, driven by the market’s needs, PASS Consulting launched, for much lower costs, new features of its Virtual Travel Organizer (VTO) including a graphical user interface and multi-source connectivity.
Built on the XX/1 platform that integrates direct providers, low-cost airlines, and proprietary product databases – such as hotel information – the VTO allows travel agencies to deliver higher value to customers. This has been achieved by providing a wide range of travel products in the business travel environment through one unique interface. The graphical interfaces are much easier to use, enabling even newer travel agents, not previously trained on cryptic entries to deal with complex travel plans and customers’ needs. Additionally, they provide a better look-and-feel and a better learning-curve. The project seemed at that time very promising, PASS even developed partnerships with large travel companies, nevertheless it might have been a bit too early back then and the market was not yet ready for that change.
The potential of multi-GDS
Eventually, content providers saw the potential of multi-GDS agent platforms. In 2008, Travelport announced an agreement with G2 SwitchWorks under which they acquired certain assets from G2Switchwork among those their multi-GDS platform which today 4 years later comes to the market as Universal API and combines Galileo, Apollo, and Worldspan (it claims to also combine Sabre and Amadeus which remains to be seen live), as well as G2 Switchworks graphical desktop which branded as Universal Desktop. With GDSs following the trend of new desktop developments new restrictions arrived for third party technology providers and TMCs, since the use of alternative multi-source agent platforms raises deeper political issues. GDSs implemented quite a few protectionist measures that prevent a wide adoption of alternative non-GDS desktops.
In 2007, Sabre made stricter its Authorized Developer Program according to which certified third parties must pay a significant fee to integrate applications into Sabre’s system, regrettably quite a few restrictions are tied in. Analogously did Travelport with their Software Developers Kit License Agreement. Amadeus also charges users and third parties proposing software that operate on their platform and require to certify each installation. Without these developer licenses, third parties are not authorized to provide any connectivity through their platforms. In parallel, tensions between the airline industry and the GDSs rose and as a result third party multi-source solutions seem to be in direct competition with the GDS’s own development efforts. In the beginning of 2009 Farelogix lost its developer agreement with Sabre and later Travelport as well because of its role in American Airlines’ development of direct connections.
What is the position of TMCs? New frontends are quite challenging to implement as it asks the TMCs to reconsider their financial model. Until now, their principal revenue comes from the fees they charge to the corporations and the commissions they receive from suppliers through the GDSs. In addition, GDSs have provided them – most times at no cost – the hardware and software they need to run their businesses. For TMCs, rethinking distribution models and stepping out of their comfort zone implies development costs and eventually they would start to participate in the investment. The shift from a situation in which TMCs get paid for distribution to a situation where TMCs actually have to pay for distribution technology, is a bitter pill to swallow. What advantages does it bring them? As competition between agencies gets more intense it gets vital to find content wherever it is located and independently from market conflicts. TMCs are in de midst of the clash between airlines and GDSs. Multi-GDS desktops could help to preserve their access to content, regardless of the risk of facing the airline pulling out their content from GDSs.
However, the role of a Multi-GDS booking front end is not limited to the air travel industry; it also provides data from all actors in the travel industry. Today, PASS is a developer authorized by all of the three main GDSs, which is a valuable asset for the use of the XX/1. On the downside, the threat of losing the developer licenses limits PASS’ possibilities to commercialize the VTO. Considering the number of travel agencies adhering to the GDSs desktops (e.g. Balboa Travel, Omega World Travel, and Travel Leaders Corporate), it looks like the market is ready for a new generation of point-of-sale desktops. Business Travel News even named Amadeus Americas’ executive president Vic Pynn “one of the most influential business travel executive” for attracting big clients. Potential clients see the benefits of products like the VTO in bringing to companies a long term competitive advantage, for example a unique interface seriously lowers training efforts and costs. Additionally, agents are more efficient and can focus on offering better services.
Building from its experience, PASS learned that the concept of “One size fits all” is irrelevant for travel management companies, as an American Express works differently than a BCD and each client of a TMC has its own specific requirements and workflows; a standard desktop is therefore inefficient as quite a lot of customization is required for each client. With the VTO 2nd Generation (VTO 2G), PASS delivered a very customer-oriented solution and remained faithful to its philosophy of developing customized software applications for the prize of standard software. Like the VTO and in addition to the GUI, VTO 2G provides complete access to an broad range of travel content and inventory such as flights, hotels and rental cars travel to management companies and agencies worldwide.
More than being a tool combining multiple sources, VTO 2G offers quick customization capabilities to the specific needs of any agency. About 80% of any individual created VTO 2G solution is based on off-the-shelf components produced by the PASS Software Factory. This means that most development efforts are made on the 20% of individual features developed for a specific client. The key strength that PASS frontends have is that all point-of-sale applications are based on the same platform.
Thus, next to the VTO 2G, PASS completes its offer with an Internet Booking Engine (IBE) and the PASS Corporate IBE, an intelligent booking system that enables the travel department of any company to book all business travel themselves. All of these front-ends are backed by the PASS XX/1Multi-GDS transaction server, which integrates all source systems and translates them into one unified XML. Moreover the highly configurable PASS Rule Engine controls all front ends in one place which means that the application is flexible and allows high adaptability without involving further developer’s intervention; if any corporate policy changes there will be no need to change it in different areas.
How could we define what the best tool is? Today standardized front-ends make sense where processes are simple and similar. However there is a strong competition between TMCs and agencies must focus their effort on differentiation. Technology should support TMCs‘ efforts to compete, the best tool would therefore be, the one that allows best flexibility to process workflow.
In his book “Value Creation in Travel Distribution” Michael Strauss, CEO of Miami Beach-based PASS Consulting Corporation, asks the question: Are the TMCs ready for a change? “TMCs must learn to move with the trends instead of remaining entrenched in the status quo. The travel industry suggests that distribution costs are too high. At the same time direct distribution suggests that the sales chain is too long. History shows that it is generally not the company with the greatest financial strength which survives, but rather the one with the right strategy and the right technology”.
Importantly, it is useful to keep in mind who in the end will be affected by travel distribution turbulences: TMCs’ corporate travel-management clients who pay for distribution costs in the price of their tickets. Corporations want a type of travel management that keeps travel costs under control, makes available the best product choice at best fares and adapts best to their internal constraints. It is now up to travel management companies to implement the best technological solutions to satisfy their customers’ needs.
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