GDSs to review agent incentives

Travel Technology Show Special: The incentives received by agents from GDSs will come under review this year, GDS bosses have admitted. The message from the GDS seminar taking place at the Travel Technology Show in London, is that GDSs will be forced to evaluate their costs, particularly agents’ incentives, under pressure from changing nature of the distribution chain and the impact of GDS deregulation. Worldspan vice-president and general manager EMEA Graham Nicholls said he thought it was only a matter of time before deregulation came to the UK. “That deregulated environment, driven by market forces, will allow GDSs to respond by directing different offerings to different customers.” Amadeus executive vice president commercial David Jones thought deregulation in Europe was likely in the next six months. Sabre senior vice president Richard Adams said the company welcomed GDS de-regulation. “It will give us the opportunity to work towards value pricing. “There are many possible models that GDSs may adopt as we enter into a deregulated market that will bring value to our customers. And when we bring value there is an opportunity to seek recompense for that” he said. When asked by the debate moderator Paul Richer whether GDS deregulation would lead to screen-biasing, Sabre’s Mr Adams would not confirm or deny whether the GDS would start putting certain airlines ahead of others. On the subject, the Amadeus and Galileo executives (Cendant Travel Distribution Service (Galileo) regional director UK and Ireland, Alison Bell) said they would not introduce screen biasing because it was up to agents to do that. Mr Richer then asked the question of whether GDSs would start charging agents. Mr Jones began by saying that GDSs would start charging fees to agents. “It will be this year, to some extent, in some places” he said, but later retracted the statement and mirrored the carefully selected words of Sabre’s Mr Adams: “We will look to reshape the incentive curve.” Mr Adams and Ms Bell both said that their respective GDSs, Sabre and Galileo, had “decided to take the hit” in a recent deal with British Airways that gave them full access to fares. In response, Amadeus’ Mr Jones said: “Taking the hit is very noble. “But look at Sabre’s results for the fourth quarter and if you read the transcript for the analysts call, see what the managers are saying on the subject of agents incentives.” Mr Jones said that cutting revenue means costs need to be reduced elsewhere, and one area would be agent incentives. “I am not saying they are going to slash them but they will take a look at incentives” said Mr Jones. Sabre’s Mr Adam’s responded with his words about ‘reshaping the incentive curve’. All the GDSs agreed that despite doing different deals with airlines over fares and content, they would not start taking content exclusively from airlines, which would mean that in the future agents would have to use more than one GDS to get access to fares from all airlines. Mr Jones said: “Seeking exclusivity of airline content is extremely foolish, and screws up your agent customers because they want content.” Report by Ginny McGrath