Ultimately, when travel managers are faced with this situation, they need to be able to sit down with their supplier and tell him how they, as buyers, want to access supplier inventory. To do that, buyers need to know how distribution works and what the options are.
When it comes to integrating new supplier content into your travel program, whether that be a GDS or an online booking tool, "There's really nothing easy about it," comments Tom DePasquale, executive vice president of Redmond, WA-based Concur Technologies. For Concur, that complexity isn't such a bad thing. It adds value to what they can offer to the market by building a bridge to disparate supplier inventory via "direct connect APIs (application programming interfaces)" often at little or no cost to their clients, showcasing their strength in this area.
"How fast we can implement a supplier completely depends on their distribution strategy," says DePasquale.
From a simplified perspective, distribution strategies can be broken down into four areas: global distribution systems (GDSs); alternative GDS platforms and connectivity providers; suppliers with available content and their own API; and suppliers with content but no API.
The Options
For suppliers who seek the most broad exposure to buyers — and can afford to participate — a GDS has long been an industry standard for distribution. So far, the market still prefers to obtain inventory via the GDS rather than direct connect links, but as markets and models change, APIs are becoming increasingly common. While GDS access to inventory may vary by supplier's participation level, each system makes content more widely available to a larger market because it's spread across multiple corporate booking tools simultaneously.
Direct GDS participation may be a good fit for some small suppliers such as regional airlines because it can often replace their own inventory management system and enhance interline agreements, increasing volume. But it might not be for an individually-owned hotel property; affiliation with a GDS-participating multi-supplier representative such as Pegasus or TravelClick is more likely to provide an affordable infrastructure to make small hotel inventory available via the GDS.
For suppliers that seek an alternative to the traditional GDS systems, there are alternative platforms such as ITA Software's RES product, Sabre's Synxis or Open Skies from Navitaire, a wholly-owned Accenture BPO business. Any of these can be considered when it comes to hosting and managing inventory and delivering content to a broader base of customers than with the supplier's web-only solution. Whether or not a supplier hosts its inventory in a GDS alternative platform or simply uses it for connectivity to the GDS, these platforms can provide visibility into major GDS systems as well as an interface into individual booking tools or third party web sites via standard APIs. Not only are they less expensive than a GDS, but they also provide additional support for things like phone-based customer service and marketing tools.
Suppliers with content available and their own API can use their APIs to build custom connections to applications such as online booking tools.
Suppliers with content but no API —nor interest in having one — tend to keep it simple and want to drive buyers only to their web site for purchasing their inventory. For example, Thailand's Air Asia LCC has based its strategy on innovative sales channels: a nationwide call center that takes an average of 6,000 calls a day; its own web site, available in six languages; and a direct B2B engine linking it to travel agents.
"Vendors are devoting more resources to APIs all the time," says DePasquale. "Concur will deliver 8 or 9 new suppliers via API this year, including some new European rail providers."
The bulk of direct connect suppliers today appear to be airlines outside of North America. But that can change at any time, depending on the amount and type of content that the market demands versus the supplier's ability to provide it quickly and cost effectively.
From a GDS perspective, the implementation process for an airline is very similar to that for a car rental company or a hotel. There are a few small exceptions. For example, an airline participant in a GDS may use an older communication protocol such as "multi-access" (punching out to the supplier's host system), or may add features such as seat map visibility, via a separate XML feed to the GDS.
"While only a small number of airlines today lean heavily on XML as a GDS communication protocol, it is safe to say that number will increase in the foreseeable future," says Kyle Moore, vice president of product marketing for Sabre Travel Network and Airline Solutions, noting that "we have engaged several airlines, a few more advanced than others, toward utilization of XML as the method of connectivity to Sabre.
Worth The Wait
"It will take a considerable amount of time for all supplier types to move from today's various forms of connectivity (teletype, multi-access and edifax/direct connect) to XML," he adds, "but as the industry moves towards adopting XML standardization protocols such as OTA (Open Travel Alliance), more suppliers will migrate."
Encouraging suppliers to adopt data OTA is one step closer to universal PNR and profile data, which would potentially make changing agencies more efficient, improve the quality of third party reporting and make it easier to consolidate data from different sources, such as separate GDSs. Traveler tracking and security products today often utilize PNR data from multiple GDSs and multiple agencies, all of which may be formatted differently (even when from the same GDS, but different agencies). This forces the technology provider to scrub the incoming data, translate it into a standardized format, and report on it accordingly, which is one good reason why OTA is something to think about when discussing connectivity with suppliers.
By definition, the Open Travel Alliance (www.opentravel.org) provides a community where companies in the electronic distribution supply chain work together to create an accepted structure for electronic messages, enabling suppliers and distributors to speak the same interoperability language, trading partner to trading partner.
"One Sabre XML success story is AirTran's connectivity to Sabre, which is 100 percent XML-based," says Moore. "Where hotels are concerned, small, individual properties or chains can find faster, often more affordable access to the GDS via third parties such as Synxis, TravelClick or Pegasus, but big hotel chains tend to go directly to the GDS."
AirTran hosts its reservations and inventory in Navitaire's Open Skies product. "The Navitaire Open Skies system continues to develop new and innovative tools that help us manage our reservations, distribution and inventory systems as AirTran continues to grow," says Kevin Healy, vice president of planning for AirTran Airways. "The AirTran business model is based on low cost, quality service; Navitaire is a leader in developing new technology and cost effective systems which support AirTran Airways' low cost network. These highly effective systems allow AirTran to maintain our three Georgia call centers."
The Data Imperative
One technology provider, Miami, FL-based FareLogix, argues that a single source GDS is insufficient to provide complete access to content for both travel agents and travel consumers. As direct connections and web-based solutions begin to gain traction, Farelogix claims that there needs to be a system that aggregates and delivers consolidated content and comparison shopping from multiple sources into one user interface, such as their solution.
Often the burden of a supplier providing its own technical resources to support data requirements and API standards can be difficult, as such standards change frequently and demand costly engineering and support. Benefits to be gained by suppliers who utilize third party platforms such as Synxis, is the ability to maintain certain industry-specific compliance regulations such as PCI (Payment Card Industry) compliance for data security standards. Such standards can be difficult to maintain, especially for small suppliers, and may limit their global reach to countries where data privacy laws can be difficult to keep up with.
The PCI Data Security Standards were created by the major credit card companies (including Visa, MasterCard, American Express and Discover) in order to safeguard customer information that could be compromised due to the enormous volume of credit card transactions that are taking place online. These standards mandate that service providers meet stringent standards of security when they store, process and transmit cardholder data (including network security, data management, application security, personnel and management policies and procedures).
"As the number of online bookings continues to grow, hoteliers should be increasingly concerned about providing a safe channel through which their guests can book," says industry consultant John Burns, president of Hospitality Technology Consulting. "Getting the 'PCI Compliance' stamp is not a simple endeavor and shows a real commitment from the vendors that achieve it."
Regardless of the path, after many years of change and reinvention, whether inventory is directly housed with them or provided to them, the GDS remains the common tie that binds content and inventory to buyers. While there may be transactions that are processed without ever touching a GDS, participation with them not only provides suppliers with exposure to GDS subscribers, but almost insures exposure into any online booking tool that is GDS compatible.
Charles Brossman has worked on both the supply side, including benchmarking and expense management companies, and on the buy side as a travel manager. Now the principal of his own consulting firm, Primal Purchasing, Brossman specializes in negotiating group purchasing programs.
