DISTRIBUTION / TMCs
accelerate the growing industry trend towards a ‘fee for service’ model that has already taken place in many markets overseas and among several agency chains in Australia. This compensates travel agents for the added value and bespoke service they provide customers beyond the logistics of booking, particularly for managing complex itineraries,” said the airline. This shift in both cost and business models might be making TMCs and their clients jittery. But corporates have weathered such storms before. At the turn of the century many were forced to explain to their bosses why the travel department had moved from a source
the OBT was built to consume red, yellow and blue but we supply green, they have to do something in order to be able to take green. It’s about how these were configured in the first place to take the content.” The challenge Marchant is talking about is that self-booking tools were developed especially by GDSs (see p26-29) for TMCs and corporates to facilitate access to GDS content. They were a new methodology for booking travel but they were tied to the legacy architecture which the web is not. GDSs are not alone in seeing their world being turned upside down. The TMCs too are on a journey. They have moved from a world where all their content and a good level of their revenue (the difference even between profit and loss for some) came from GDSs to a multi-source environment. Hotel and rail content have always arrived at the GDS from aggregators’ pipes. Now there are aggregators who are providing them with a bundle from different carriers, say, both low-cost airlines and IATA members. But have corporates’ requirements changed? Areka’s Jean-Michel Kadaner points out that “in comparison to other professions there’s no clear barrier between B2C [business to consumer] and B2B [business to business]. We’re using the same suppliers and products. There’s no differentiation on a low-cost airline whether I’m going on business [or leisure] from Paris to Dublin for the day.” I don’t know how a TMC can add value for a customer and margin to the TMC without a form of aggregator technology
Travel management companies need to address three client requirements: an improved travel experience, optimising the client’s programme and improved servicing, according to Ahluwalia. Amex acknowledges the essential nature of servicing a booking by evaluating all its content under what they call MMP (minimal marketing product). Do fare T&Cs display? Can it be exchanged or rebooked? “We want to facilitate but not in a way that will not add cost or complexity,” adds Ahluwalia. But this leaves business challenges. Bishop believes that travellers behaving like consumers means that TMCs must behave
of income (agencies passing some of their commission back to the corporates) to a cost centre (the management fee model). TMCs are also facing major challenges around how to provide content. With a nod to the increased demand for retailing, which no doubt was spurred by the explosion in the use of online shopping sites during the pandemic, Bishop wryly observes: “Our competition is the website not other TMCs.” The gap between the old technology and the new is also evident between suppliers’ provision of content via pipes
more like online retailers. “What we need to do is sell more of the trip components – if we make it easy for people to buy things from us, they will. We use Atriis because we want something that sits above the GDS and have all the content available to both agent and customer. “If you’re a good retailer you need to make it appeal to direct and indirect customers – make it easy for the agent to book and give more value to the customer. We couldn’t have done this in the old structure – it wasn’t compatible. “I don’t know how a TMC can add value for a customer and margin to the TMC without some form of
and aggregators and what the customer is ultimately receiving. EasyJet’s head of business development, James Marchant, says that just because content has been made available to a TMC doesn’t mean that it is available to users. “The way our content ends up with you [the user] is through our API. The biggest lesson we’re learning is that even if our content is taken by a GDS, aggregator or OBT, that doesn’t mean that’s what a consumer has access to.” He continues: “For example, we launched the standalone cabin bag on our app and website and made it available through our API. But it takes time before being available to the end user, whether [that’s a] travel consultant or booked through the OBT. “The booking tool has to be developed. If
aggregator technology. We’re never going to be in a position where a GDS offers everything. GDS functionality is not the whole story. Enhancements may improve revenue prospects but they might also add cost. Bishop pondered the consequences: “We know what the GDSs are doing but we don’t really know what it’s going to cost. Fares might be cheaper but there might be a cost to this change.” But for travel management companies change is undoubtedly on the way. IATA’s distribution director Yanik Hoyles believes that “at some point it won’t make sense to have 50-year-old technology coexisting with new pipes. How long [that lasts] will depend a lot on the airlines and technology providers. Once everyone’s onboard, keeping the old plumbing won’t make sense.”
42
businesstravelnewseurope.com | SPRING 2023
Made with FlippingBook Online newsletter maker