AmTrav CEO Jeff Klee has some advice for GDSs looking to maintain their positions as pre-eminent corporate travel tech providers. He suggests they embrace new data formats, expand content aggregation into more corners and make things simpler for users.
The story of Kodak is a cautionary tale about a once-great company whose leaders misunderstood its mission and failed to seize a massive opportunity. As technical advancements brought new and better ways to take pictures, they were reluctant to let go of their preferred means-to-an-end — film — and pivot. Ultimately, Kodak faded into irrelevance.
The global distribution systems once had a Kodak Moment, and not the good kind. Internet startups surveyed the hotel distribution landscape and concluded that, even though using GDSs would be easier, they were too slow, too limited and lacked rich content like descriptions and imagery. So, they built inventory aggregation platforms that mostly cut out the GDSs from the biggest prize in travel distribution: selling hotels to consumers.
Had GDSs stepped back and revisited the broader goal of just making it easier for travelers to book hotel rooms, with a willingness to rethink their narrow focus on EDIFACT connections to switches and CRS systems, today’s landscape might look very different. Instead, GDSs all but ceded their role in consumer hotel bookings. Even corporate travelers are increasingly willing to use leisure solutions to book hotels.
I look at flights and wonder if it’s déjà vu all over again.
GDSs seem stuck on pursuing a mission to empower travel agencies to create and manage passenger name records rather than what should be their mission: connecting suppliers and consumers of travel inventory.
Impatient and unsatisfied with the status quo, some players are building their own flight aggregation platforms and order management systems. With certain suppliers, they’re bypassing GDSs to deliver more inventory and capabilities, and a demonstrably better experience.
GDSs are at a crossroads. Do they want to be Travelfusion or Spotnana? Should their go-forward mission be simply to aggregate inventory? Or is it to continue as the hub of the TMC tech stack – not just a content source, but also a database, a CRM system, a point-of-sale solution and the system of record for data passed between applications?
A GDS could viably divest product lines and become a super aggregator. If they stop pouring resources into desktops and other agency tools, they could focus on becoming the best, centralized source for booking channels to get travel inventory. They could create a single API that normalizes content and workflows for every supplier, whether EDIFACT, NDC or something else behind the scenes; abstract away unnecessary complexity so developers don’t have to know about fare basis codes, reservation booking designators, ticket designator boxes, other service information fields, etc.; orchestrate recovery flows for the inevitable supplier failures; and enrich the content with descriptions, multimedia and reviews not available from suppliers. They could add an “expert mode” for developers to work with native supplier APIs and count on immediate access to 100 percent of the supplier’s capabilities. And they could layer on responsive support from highly skilled people to advise and assist developers in ways that suppliers never would. This is a bundle of services that I would pay for.
Alternatively, GDSs can continue to aspire to be that end-to-end technology solution for travel agencies. To win there, they must rip off the Band-Aid.
With PNRs, GDSs have been inexplicably wed to a data structure that hasn’t been fit for purpose for at least two decades. If that continues, it will be impossible to compete with Spotnana. That is not quite an apples-to-apples comparison, but it will be.
If GDSs are serious about continuing as the core piece of an agency tech stack, they have to:
- Replace the PNR and traveler and company profiles with modern, configurable data structures that can be queried, joined and sorted.
- Structure orders as containers for multiple supplier bookings so a trip can be multi-ticket, multimodal, multisource and/or multi-vertical — all seamless to the user.
- Provide point-of-sale tools to agents that don’t require NASA-level training or memorization of codes and formats.
- Expose booking data to third parties and AI engines through open, modern APIs with simple data structures, while abstracting out arcane industry constructs.
- Be capable of ingesting and syncing bookings from other sources, including supplier-direct and other aggregators.
- Provide even more of the end-to-end solution by building or much more deeply integrating OBTs, mid-office, back-office, expense management, duty of care and other service providers.
This won’t be easy, but in the complicated world of travel distribution, easy won’t win.
Companies and travelers will be best served if the industry has technically adept and commercially viable content aggregators. GDSs are still far and away best positioned to serve that role despite serious competition from nimble and fresh-thinking competitors.
More than any other industry players, GDSs can shrink moats and propel innovation. They make it feasible for startups to start up and build new, imaginative solutions that solve pain points and make life easier for travelers and companies — without reinventing a giant wheel. Without GDSs, the scale required to aggregate content would mean no small players. And without the push from small players and new entrants, even the platforms that today are modern and progressive will tomorrow become bloated and complacent.
This is my call to arms for the operators of the three primary GDSs. I see the world from a narrow vantage point, with certain biases and an admitted lack of visibility into the complex businesses that are GDSs, but I’m asking anyway. We need you, GDSs. Travelers and their companies need you. This is not a time to go after small wins.
I say this with respect: Like all of us, you made mistakes, and you came late to the battle, but the war is still yours to win.
Jeff is right on point and love the Kodak reference as there are ominous similarities, but the good news that it is not too late to change…yet… but coming on like a freight train. AI will make all of this easier if they move now!