BCD Travel releases White Paper on Current trends in Travel Distribution

The full-content agreements signed in 2006 between airlines and global distribution systems (GDS) are at best a stop-gap measure for corporations seeking efficient access to airfare inventory, according to a white paper on current trends in travel distribution released Friday by BCD Travel.

The white paper explores the tensions and complexities that animate the current distribution environment, addressing issues such as GDS fees, credit card merchant fees alternative content aggregators (ACAs) and the rise of unbundled pricing.

Dee Runyan, executive vice president of technology, products and supplier relations for BCD Travel, said, “The executives responsible for managed travel programs feel caught between travel suppliers’ drive to remove costs from their distribution system and their own need for easy access to full content inventory. Corporations need to understand clearly the views of key industry players as to the short, medium, and long-term viability of current distribution channels.”

BCD Travel interviewed a range of subject matter experts from the major airline, low-cost airline, GDS, hotel, and travel management company sectors. The resulting white paper compiles and analyzes these experts’ answers to a series of questions, including:

- Is the GDS the most viable technology for distribution of airline inventory today? Will it be the most viable technology three to five years from now?

- Will the opt-in programs currently operating in North America and the United Kingdom take root in continental Europe?

- Will alternative players in distribution technology become a viable option in the next three to five years?

- Who should pay GDS fees and associated distribution costs – suppliers, customers or travel management companies?

- What are airlines’ plans for reducing merchant fees paid to credit card and charge card companies?

Among other conclusions, the white paper asserts that GDSs remain the strongest, most efficient option for both customers seeking access to, and suppliers seeking an outlet for, global inventory – but that this position of strength is tenuous, and that future viability will depend on the GDSs’ ability to incorporate new technologies that accommodate both supplier and end consumer expectations.

“Over the next several years, we expect airlines to continue focusing on lowering distribution costs on all possible fronts - whether through lower GDS fees or lower merchant fees. Suppliers such as hoteliers and car rental companies are watching developments in this arena closely, to see how they too might benefit. In this environment, it is more critical than ever that travel management companies take an active role in aggregating content and insulating customers from disruptive industry developments,” added Runyan.

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