GDSs ‘not competing with agents’

TTI Autumn Conference Special: Ownership of websites such as Travelocity by GDSs like Sabre actually benefits agents, rather than competing with them, according to an industry figure.

Speaking at yesterday’s Travel Technology Initiative (TTI) Autumn Conference, Sabre manager of leisure product marketing EMEA, Gary Howes said: “The ownership of consumer websites like Travelocity broadens our distribution network and actually benefits agents because it brings greater participation of suppliers.

“It gives us powers to strike agreements with suppliers and agents benefit from those agreements.”

Mr Howes was speaking from a panel that represented all four GDSs, three of which have a stake in a consumer online travel website. Sabre owns Travelocity, Amadeus has recently increased its stake to a majority holding in Opodo and Galileo is owned by Cendant Travel Distribution Services, a company that also owns lodging.com and HotelClub.com among others.

The remaining GDS, Worldspan, continues to affirm its commitment to staying clear of ownership of a consumer website. Vice president and general manager of travel distribution, Graham Nicholls said: “For us it is clear that we do not have strong vertical integration like the other GDSs and we will not start competing with our agency customers. We will help them to combat change.

“Why would agents give profits to someone that is going to eat their lunch?”

He added: “We do have quite a different strategy to the other three.”

Galileo UK country manager, Jason Clarke dismissed Worldspan’s strategy as a “one trick pony”. He later told TravelMole: “It is all about consumer choice – the consumer will decide which channel to book their travel with.

“Worldspan’s view limits them on the technology they can bring because each channel will benefit from increased technology and in order to invest more in technology you need to get greater revenues from it.”

He added: “This one trick pony may or may not work to their advantage.”

When asked by audience member, Mark Bradbury, business development director of RWA, whether the GDS with the deepest pockets would be the most successful, Mr Nicholls said that as the smallest of the GDSs, Worldspan could remain flexible. He added: “Not all businesses can continue to cross subsidise other businesses because it does not work.”

Answering the same question, Amadeus head of Tours Business Unit UK, Bill Barnes said: “The key factor is the distribution network that a GDS has.”

In his opening presentation, Mr Barnes said Amadeus was “hedging its bets” by maintaining stakes in various travel websites around the world including Rumbo in South and Latin America and Opodo in Europe.