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sbarr011

Another Airline Follows Lufthansa And Adds GDS Fees - 0 views

  • “the overall business case is more positive than we thought,” he pointed to an uptick in ancillary sales through the direct channel.  “From what we hear in the industry and with the visible success of Lufthansa, I would be very surprised if others would not follow.”The global GDSs, including Amadeus, Sabre and Travelport, continue to strongly oppose Lufthansa’s strategy, saying that their platforms offer agencies and their clients the most choice of services.
  • Meanwhile, Lufthansa says it won’t change course on the booking-fee strategy, which is aimed both at reducing GDS costs, and encouraging agencies to use the airline’s direct-connect platform to buy tickets. 
  • But the Ukrainian flag carrier is also slapping a slew of new fees on all bookings made through a variety of channels, including third-party booking sites as well its own ticket offices – which will also be subject to the $9-per-segment fee.  Thus, the action appears to be designed to steer consumers to book directly on the airlines’ own website, rather than specifically targeting agencies.
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  • Like Lufthansa, which introduced a 16-euro fee on GDS bookings in the fall of 2015, Ukrainian argues that the fee is in response to what it calls the “growing fees of GDSs.”  
  • Any new fee can generate a backlash, and particularly for price-sensitive leisure travelers, could lead to booking away from a particular carrier. 
  • Lufthansa German Airlines’ CEO recently raised eyebrows in the industry by predicting other airlines would match its controversial fee on all bookings made through Global Distribution Systems. But since then, the only news on this front has been from a relatively small carrier, Ukraine International Airlines, which said it will impose a new $9 surcharge on GDS bookings at the end of April.  
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    This article discusses Lufthansa airlines and Ukraine International Airlines who both now impose a surcharge on GDS bookings. The GDSs Amadeus, Sabre and Travelport disagree with this strategy and say that they offer the most choice of services and think that steering clients away from using GDSs to book travel is not a smart idea. In 2015, Lufthansa and its other airlines (which also includes Austrian, Brussels, Eurowings and Swiss airlines) implemented a 16-euro fee on all GDS bookings. Ukraine International Airlines (UIA) is a much smaller airline than Lufthansa, however, some analysts believe that this decision could prompt other airlines to do so as well. About one month ago, UIA imposed a $9 surcharge on GDS bookings. Some analysts believe that the new imposed fee will drive some customers, especially the price-sensitive leisure travelers, towards other airline carriers. In addition to implementing a surcharge on GDS bookings, UIA is also adding fees to any bookings made on third-party booking sites. The airline is trying to incentivize its travelers to book directly through their website and not go through any other channel. Lufthansa has had success with their strategy. The CEO stated the fee had a net-zero impact on their business, but there was a rise increase in sales through their direct channel.
jazminesnyder

Guest Column: How Distribution Systems Are Like Seat Belts - Business Travel News - 0 views

  • global distribution systems use old technology
  • their interfaces aren’t quite as attractive as airline websites
  • they still do what they’re designed to do efficiently and affordably.
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  • agency portals
  • Are not designed to manage high transaction volumes generated by large TMCs.Do not offer comparison shopping on competing airlines.
  • Its strategy seems to rest in shifting distribution costs to corporate buyers.
  • Building out airline websites, keeping website content updated, investing in agent portals and investing in direct connect technology all come with significant capital expenditures or resource costs.
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    My article this week is about how GDS (Global Distribution Systems) can be compared to a seatbelt. The author opens the article discussing the main reasons we still continue to use seatbelts; even though they aren't the most comfortable or fashionable items to use, they still do their jobs in saving our lives when it comes to a collision of some sort. The author is in favor of GDS and makes the claim that like seatbelts, the GDS may not be the most up-to-date or may not appear to be as nice as other local systems to each individual airline, but they get the job done and there are no other systems out there like it that we know of (no other systems that do everything he GDS system does that is). The main topic of discussion that the article is concerned with is the recent decision made by the company Lufthansa to start charging its customers an additional surcharge for using GDS systems instead of going through its own system. The author clearly makes it know that she doesn't believe Lufthansa when they say they are charging this additional surcharge because GDS is the most expensive channel to go through. "Because there's no reason to think that an airline should expect to distribute its products without any cost, Lufthansa's recent gambit seems more of a tactic for increasing lagging direct distribution... Its strategy seems to rest in shifting distribution costs to corporate buyers" claims Rose, the author of the article. The author also points out some of the draw backs of using agency portals, the main reason being that a customer cannot compare rates of other competitors and that agency portals cannot handle high volume transactions like the GDS can. It is also made known that there are costs that come with other channels as well, like the prices you pay for building airline websites and keeping them updated. The author concludes that "Given the history of negotiations between airlines and GDSs, it's impossible to know whether Lufthansa is using DCC as
irinatroitskaya

United Signals It Wants a Better Deal with Reservation Middlemen - Skift - 0 views

  • The reservation services that middlemen technology companies provide to travel agency networks and online travel agencies are a particular sore spot for airlines.
  • Overall worldwide, airline lobbying groups say they pay $7 billion in fees a year to these reservation systems.
  • In the past, non-standard products like that have posed challenges for Sabre, Amadeus, Travelport, and Travelsky to display and distribute to travel agencies.
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  • But beyond monetary concerns, there were antitrust issues at play, with the airlines contending that Sabre had a stranglehold on the domestic U.S. market
  • The distributors say they can accommodate technological requests from the airlines, despite the public skepticism expressed by some airline executives.
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    This article demonstrates the way how relationship between the airlines (United) and the technology companies which serve as middlemen is build. According to the estimations, the airlines pay to the gds's about $18 per round trip ticket reservation, which results in 7 billion in fees that are payed to the gds's annually. The air companies consider these fees unfair in regard of the gds' performance. To compensate for these payments as well as to promote direct bookings, the airlines (namely, Lufthansa) have added a surcharge for any external bookings. GDS's, however, fight back and start litigations against Lufthansa. The decision on this case will either stop such a practice, or force other airlines to follow LH and add surcharges for gds's too. Another problem that airlines experience with GDS's is the presentation of non-standard products that the airlines offer. For example, it took the GDS's several years to correctly display the Ecomy Skycouch by Air New Zealand (buy 3 seats at the price of 2 to sleep across all of them during the long-haul flight). United is going to introduce its Basic Economy Seats with no carry-on luggage and no qualifying miles. However, they are not sure that the GDS' s will be able to display this product to the customers in a proper way so that they could fully understand what they are buying. The reason for that is that GDS's are mainly reluctant to invest in technologies that are focused on product differentation. In this regard, it becomes more difficult to compare fares since different set of services is included in different products. Thus, the customers might be mislead. Moreover, there are antitrust issues with the gds's. The airlines claim that Sabre has a stranlehold on the US domestic market. Such position allows it to ultimatum the airlines and voluntary decide on search display order. The airlines expect the GDS's to be more prone to partnership ralations. This would imply the fair compensation for what they add to the
shawndab

Priceline gets Hawaiian Airlines' NDC content: Travel Weekly - 0 views

  • The airline no longer sells Hawaii interisland flights in the GDSs; they are only available via NDC and direct channels. 
  • It also doesn't have to pay Hawaiian's GDS surcharge of $7 per segment on U.S. mainland flights.
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    The IATA's (International air transport association) New Distribution Capability (NDC), is allowing Priceline the option to sell interisland flights in the Hawaiian islands. This deal will also mean that Priceline will not have to pay the GDS $7 per segment surcharge on U.S. mainland flights.
kgill017

Lufthansa says other airlines will follow GDS surcharge move - 0 views

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    This article discusses how Lufthansa Airlines has instituted a surcharge to use GDS system bookings. This is in part to promote direct bookings. It also claims that other airlines may follow this new measure in the future .
hectorpachon

A viewpoint on GDS surcharges and the evolving airline distribution landscape | PhocusWire - 0 views

  • The fact is that the current system is old. It’s been around since the 60s and it has serious flaws baked into its older mainframe approach. Not so long ago, research revealed security flaws in PNRs as used by the GDS, which meant they could be easily hacked.
  • This means that travel agents’ bookings are swayed by the airlines they have preferred agreements with. It earns them bonus payments if they reach a certain volume each year. This can skew the equation away from the traveler's best interests.
  • The fact is that three main players still dominate the global travel distribution system.
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  • Recently, there have been disputes between certain airlines and the GDS.
  • Tensions between airlines and GDSs have been further exacerbated with carriers making more from unbundling their fares and then offering services like luggage, food and drink as add-ons. This move has been hugely profitable for airlines -- and has increased airline revenues by shielding these add-ons from middlemen.
  • European airlines have perhaps been most active in exploring models outside the GDS.
  • The fact is that it’s new technology that will guide and change the travel distribution system. Smaller players have more of an opportunity to create innovative solutions that do not involve the big three.
  • They have direct access to consumers and are pushing hard into selling travel. If Facebook opens up its user base of more than one billion people to travel companies you can imagine that many will jump on board.
  • Airlines have been heading towards a merchandising strategy for some time now, increasing profits and shifting from a service provider to a retailer.
  • However, there is no doubt that this is the path they need to take to grow and attract wider sales.
  • The fact is, in order to make these changes successfully they cannot be restricted by financial burdens, outdated systems and old technology. New platforms and systems need to be continuously developed to support them as the airlines’ business model evolves and passengers demand more from their carrier wherever they book their tickets.
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    Some argue that the GDS is a fair system. It it does enable travel agents and clients to access travel data, make price comparisons, access special rates and book travel. The big 3 Travelport, Amaadeus, and Sabre do generate billions of dollars of global travel sales for travel providers. The fact is though that the current system is old, dating back to the 60's, has serious flaws, and can be hacked. It is also biased as travel agents bookings are swayed by the airlines they have preferred agreements with, which can skew the equation away from the traveler's best interests. Having 3 Big players with a virtual travel monopoly is not an ideal situation. Carriers are fighting back and airlines are changing strategy. Tension between airlines and the GDS caused by disputes has European airlines exploring models outside the GDS. To make the changes successful they cannot be restricted by outdated systems, old technology or financial burdens.
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    It discusses the high fees of the GDS and the fact that their system needs to be upgraded. Also, the challenges airlines face with paying those fees and ways the airlines are making additional revenue without having to pay fees to the GDS.
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    Due to the high fees some airlines were or are paying to the GDS companies, they are re-thinking their strategy to get more revenue out of the passengers, in order to mitigate the lost of revenue for not being anymore in an open GDS market like Amadeus. Amadeus knows they are the big gorilla in the market with a 44% of the share, compared to Sabre or Travelport, the other two leaders in the GDS market.
jlewinsky

What is the digital outlook for 2021 in business travel? | PhocusWire - 0 views

  • The GDSs are finally competing with a wider group than the traditional oligopoly group that they have been complacent with for so many years.
  • I imagine that at some point in the next few years the GDSs and the airlines will finally figure out their commercial challenges and we will get NDC content in the GDS as mainstream. If they do not, a huge amount of development cost by the GDSs has been wasted. 
  • It will be interesting to see how the NDC specialists will adapt to NDC becoming mainstream in the GDS. To compete with the GDS they would need to fill some gaps quickly around hotel, car rental, and I expect they will utilize the wealth of API options. 
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  • With more and more airlines adding surcharges for booking on the GDS as well as removing lower tiers of fares, the GDS is simply becoming a more expensive environment to book in. As has been said many times, this model needs to change.
  • The OBTs will face some challenges in 2021, one being with respect to resources.
  • The OBTs might have added to their roadmaps the integration of new information sources that deal with COVID-19.
  • In some respects, the OBT workflows are ideal with regards approval processes, which are likely to be more complex in 2021 compared to a year previous. So, from that perspective the OBT’s have a strength to play on.
  • Automation is no longer a nice to have in 2021, TMCs need to find ways of working that avoid the costly touch of a human being. Fully touchless bookings are the holy grail.
  • Still missing is a system able to grab GDS bookings, NDC bookings, other direct booking sources (e.g. low cost carriers, bed banks) and offer one single place to be able to view and interact with the bookings (modify, cancel). 
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    This article focuses on GDS emerging competitors now and in the future. Online booking has become more attractive to the consumer, with no surcharges unlike the GDS system airlines use for booking.
Avril Emmanuel

Future of Hotel Call Accounting by Jessie Warner - 1 views

  • Call accounting has been around for decades to track, manage and bill or allocate phone calls. By the mid-1980s, call accounting was a necessary and very profitable tool for almost all hotels/motels. Some properties made thousands of dollars each month with call accounting
  • Call accounting products allow hotels/motels to bill guests for all phone calls that the property will have to pay for, recovering costs (plus fair mark-ups and/or surcharges for amortized equipment/service costs, profits, etc., too, if desired)
  • Managers can also detect phone misuse or abuse, optimize phone system performance, allocate telecom costs by department or extension, set special rates for VIP guests, and decrease billing errors
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  • is there a role – and a future - for hospitality call accounting? Do hotels/motels still need call accounting systems? The answer to these questions is a profound YES and YES!
  • Hospitality call accounting has a bright future
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    What hotel call accounting does is to track, manage, and bill or allocate phone calls made by guests or employees. It has played a critical role in the lodging industry for decades. By the mid-1980s, call accounting was a very profitable source for most of hotels/motels because it generated thousands of dollars each month. However, hotel call accounting has been less important due to the presence of cell phones, decrease in long distance rates. At this point, hoteliers may wonder if they really need call accounting systems. The author emphasizes that hotel call accounting is still important and beneficial for hotels/motels in many ways: billing hotel guests for all phone calls, detecting phone misuse or abuse, decreasing billing errors, etc. Mostly, revenues from call accounting alone can cover the costs for phone equipment and service, so hotels do not take any risk. The author also stresses that call accounting has a bright future. Even though the importance of call accounting has decreased, hotels still need a way to track and bill phone calls to guests and departments as PMS and phone systems get more advanced, as Internet and VoIP are used more and more.
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                      This article talks about the importance of call accounting in hotels. Call Accounting is a hotel's ability to track and analyze the phone calls made from its grounds.                   Call Accounting is a software that is still a necessity even though it no longer makes as much money as it used to. Warner says, "Now that cell phones are everywhere and long distance rates have significantly decreased, call accounting does not allow properties to bring in nearly as much revenue as before. For many hotels/motels, call accounting has been forced to take a back seat in their organization."       Call Accounting shouldn't be eliminated simply because the ROI is less. Tracking where a 911 call originated and providing quality customer service is more important than money. If you provide proper customer service, the money will come.          In another article on Ezine articles, Warner said, "Without a call accounting system, hotel managers do not have the information needed to quickly resolve guest concerns and may be confronted with headaches and disgruntled customers. However, by using a call accounting system, managers can have the added security and peace of mind that they have the information needed to help their guests and to understand, manage, improve, and control telephone activities."                  
marvahb

British Airways Adds a Fee That Could Weaken Airline-Ticket Middlemen - Skift - 0 views

  • On Friday, International Consolidated Airlines Group (IAG), parent company of British Airways and Iberia, said that it will add a fee of £8 (about $10.63) per leg of a trip on tickets that are booked through the three largest middlemen for distributing tickets to travel agencies: Amadeus, Sabre, and Travelport.
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    In their attempt to cease the use of "middlemen", British Airways and Iberia will attempt something so bold that not many other airlines have done. The airline plans to add surcharges to the tickets consumers purchase through GDS's in hopes that they will book directly through them. Although many predict that they will fail, they originally got the idea from the airline Lufthansa, which implemented this approach back in the summer of 2015 and have not seen a loss in revenue since. Sabre did try to sue the airline for this however the case remains in limbo.
ypere044

Hotel guests spend more on telecom; 38% rise in past two years - USATODAY.com - 0 views

  • The way travelers communicate on the road has changed dramatically over the years, and these changes become evident when analyzing the revenue earned by U.S. hotels from their guests for use of telecommunication devices and services. In lodging industry parlance, "telecommunications revenue" includes monies received from the guest use of hotel room phones, fax machines, and internet connections.According to our research, telecommunications revenue at the average U.S. hotel in PKF's annual Trends in the Hotel Industry survey sample has declined by 79% since 2000.
  • Internet fees help drive growth in telecom revenue
  • Tiered Internet pricing: Here to stay?
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  • to tell us about the state of the industry's telecommunications revenue stream - a stream that includes Internet fees.
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    "The way travelers communicate on the road has changed dramatically over the years, and these changes become evident when analyzing the revenue earned by U.S. hotels from their guests for use of telecommunication devices and services. In lodging industry parlance, "telecommunications revenue" includes monies received from the guest use of hotel room phones, fax machines, and internet connections."
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    This year, travelers are on track to pay U.S. hotels an estimated $1.95 billion in fees and surcharges - an amount that includes unpopular Internet charges. With this in mind, Hotel Check-In asked Robert Mandelbaum, the Atlanta-based director of information services for PKF Hospitality Research, to tell us about the state of the industry's telecommunications revenue stream - a stream that includes Internet fees.
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    Over the years, with technological and telecommunication advances the way we communication while on the road or on vacation has changed. I remember going on vacation as a child and being able to call my grandma from our hotel room once a day because we didn't want to spend too much money on calling back home or getting a voicemail from family members calling while we weren't in the hotel room. Over the years, this has changed dramatically. Now I can go on vacation and call, text, send emails, pictures, and videos to all my contacts with the use of my cell phone or with the use of my laptop in a WiFi area. This article gives insight on the revenue provided by telecommunications as told by Robert Mandelbaum a director of information services. He tells us that internet fees help with the growth of telecom revenue, as use of in room phones has decreased. This is just one way that the changes in technology have affected the industry. In this case, telecommunication advances have had a negative effect on the revenue in telecommunications but its only a matter of time until something new comes around and attempts to restore profit production. 
Lu Zhang

hotelsystemsoftware: How to Generate Revenue with Hotel Call Accounting Software - 0 views

  • It is imperative for sophisticated hotel billing software to account for telephone charges, Internet usage, equipment fees, surcharges and taxes in real time.
  • Hotel telecom revenues are now declining at a steady rate of 3 to 6 per cent per year. Hotel general managers and comptrollers are forced to become more creative to meet bottom line objectives for communication.
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    Because the calling rates decrease, hotel revenue of calling decline. However, according to this article, hotel can get much profit when using call accounting system. Hotel could track the busy number or peak calling times to set up specific rates or charge plan to maximize revenue from call. Besides, night auditors should pay more attention on reconcile balance between calling bills and hotel calling record, and ensuring the calling accounting system keep the accurate rates for different guests or locations.
Jiaqi Xu

How to Generate Revenue with Hotel Call Accounting Software - 2 views

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    Billing software is important for the hotel. It can helps the hotel account for telephone charges, Internet usage, equipment fees, surcharges and taxes in real time. With the declining of the telecom revenue the new call accounting modules should adapt to new market competition. Some of the hotel adjusting room rate to balance the telecom revenue lost. Even though the use of the telecom is declining, proper use hotel call accounting system can still bring profit. The accounting system can provide traffic reports identify grade of service, peak calling hours, and the number of trunks the hotel should have to run telecom smoothly. The calling accounting report can show where guests are calling. It is easy for hotel find its target market and negotiate better tariff plans. The call accounting system can make fewer mistakes than the night auditor. All calls are being record with the help of calling accounting system. Hotel should update the critical information in calling accounting system monthly and all the properties use the same tariff table and follow the same guidelines. In this way hotel can avoid inaccurate billing and lost revenue.
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    This is an interesting article as hotels have to adjust from guests using the room telephones and hotel internet to using their cell phones and mobile networks. Hotels do need to compensate for that loss in revenue but it is hard to charge much for internet service when guests can go down the block to Starbucks and get it for free. With these changes, it makes it even more important to hotels' bottom lines to have the right call accounting system in place making sure they don't miss out on any collectible monies. Good article Jingyi.
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    This article is about how to generate revenue from the hotel call accounting system. Travelers involve the business travelers and family travelers all need to keep in touch with others. Therefore, it is important for sophisticated hotel billing software to account for telephone charges, Internet usage, and equipment fees. Sometimes your telephone charges could account for a larger cost than the room rate. The article also compared the old call accounting system and the new ones. Old call accounting system would generally been left in the back room logging long distance call records from a PBX serial port. Nowadays, hotel managers become creative in using new call accounting modules or more appropriately a communication management system .Properly utilization of a hotel call accounting system can help hotel generate high profits. Proactive hotel properties use call accounting reports to determine calling patterns that show where guests are calling. These statistics help the hotel target marketing and negotiate better tariff plans. As hotel provides more communication facilities, the communication management system will be required to account for hotel cell phones, calls made with authorization codes, internet service, hand held devices and other guest amenities.
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    Hotel call accounting software or hotel accounting software in short is a system records telephonic activity, translates it into relevant data and arranges it in reports, graphs, charts etc for analysis. In the hospitality industry, the call accounting software plays an important role as an interface between the hotel management/staff and the customers. Call accounting products allow hotels/motels to bill guests for all phone calls that the property will have to pay for, recovering costs.Managers can also detect phone misuse or abuse, optimize phone system performance, allocate telecom costs by department or extension, set special rates for VIP guests, and decrease billing errors.
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    Using accounting system to generate revenue for hotel is a great way. Today, revenue management is strong relay on those more accounting system. Properly use accounting system can support hotel generate more profits. Also, proactive hotel properties use call accounting reports to determine calling patterns that show where guests are calling. All these data help the hotel target marketing and negotiate better tariff plans.
Cecilia Lucas

Travel retailers at risk as non-GDS business rises - 0 views

  • The increasing number of travel agents making bookings outside the traditional global distribution systems is driving the need for simpler payment systems, according to a new survey
  • found a fifth of businesses make more than 50% of their revenue from non-GDS transactions,
  • travel agents and suppliers believe their payment systems are completely adequate, with the biggest bug-bear named as booking fees such as administrative and credit card surcharges.
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  • meant payments transacted outside the GDSs were being handled manually or with disparate systems, leaving room for error and unreliable audit trails.
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    1/5 of travel businesses make more than 50% of their revenue from sales outside the GDS booking system, and as they do this, payment transactions are more unreliable and vulnerable opening bigger risks to the customers
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    Travel Agents are now faced with the situation where they have to utilize all channels to stay afloat. The market has gotten so competitive with more airlines going the direct booking route. Travel Agents now have to be flexible though they face the risk of multiple accounting systems. This could potentially increase the cost of doing business and they may have to input information in multiple system which of course per article may lead to mistakes. GDS may need to look at their approach and some of the fees charged if this trend continues.
Carl Miller

Overhead Bin - No boys allowed: More hotels offering women-only floors - 0 views

  • it provides a sense of security
  • “Rooms on the Orchid Floor are often sold-out,” said Jackson, “and now the hotel is considering adding an additional women-only floor.”
  • Harris-Hill said she initially chose the women-only floor, which has a $30 surcharge, because she was new to the area and felt more secure.
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    This article discusses a new trend in hotels - women-only floors. Some hotels are starting to dedicate entire floors for women. I think this is an interesting concept. I would have thought this would only exist in places like hostels where there may be public bathrooms. However, this seems to be a growing trend in hotels that cater to business travelers. The floors are accessible only with the room cards and they are only given to women.  The article mentions a couple of times, that it makes women feel more secure but it didn't really explain why. One woman said she was new to the area and that's why it made he feel more secure. Seeing as how I am a man, I don't really see how being on a same sex floor of a hotel room could make you feel safer. Ladies could you help me out with this?
sherylvelazquez

The Future of Global Distribution Channels: New Horizons for Airline e-Commerce - 0 views

  • Earlier this year, Lufthansa announced that it was adding a surcharge to all bookings made via global distribution systems in an attempt to funnel traffic to direct bookings
  • Nonetheless, distribution has seen a number of interesting trends that may spell new opportunities for airlines looking to capture new markets, bring in additional revenue via ancillaries, and keep pace with the competition. Airlines are more interested than ever in alternative distribution, with the majority of airline marketing/sales/distribution executives saying they are very or extremely likely to adopt an alternative to GDS by 2017.
  • Overall, travel “distribution” is becoming more like “e-commerce,” with campaigns, offers, and channel marketing edging out the simpler “product push” of yesteryear.
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  • Pay-per-click advertising is a huge boon for the travel industry – travel and tourism was the third highest spending industry on Google AdWords in 2014,
  • Metasearch is a great opportunity for airlines because, again, it meets comprehensive or complex travel shopping needs.
  • With IT solutions that can gather, store, and analyze data in a variety of ways, airlines are better able to monitor performance across channels, quickly adjust offers based on a variety of situations and circumstances, and optimize communications and transactions by device.
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    This article is about the future of global distribution systems and how airlines are making a push towards direct bookings. They are using things like performance adverting, metasearch networks, and data based e-commerce in increase revenue and improve operations.
lianettfernandez

https://www.travel-industry-blog.com/travel-industry/ndc/ - 0 views

  • The other aspect of NDC is that airlines want to take control of the distribution, such as provide offers based on ‘who is asking’, price ancillaries etc. – in order to differentiate from each other.
  • In this example, what used to be a closed environment of a few handful of CRS provider hooking into one handful of GDSs, who open themselves only to a limited number of authorized developers, now appear to open up APIs to everybody. This may be an ultimate risk that needs to be managed.
  • there is absolutely no way that every TMC or even every corporation can integrate with all airlines, which means we need a direct connect aggregator.
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  • However, not all airlines will migrate to NDC at the same time which would mean a transition period and among the challenges, there is also the unresolved problem who does the ticketing:
  • It takes a number of agreements for each direct connect.
  • Source agnostic Agent Desktops are not easy to develop
  • While I’m sure there are trips which can be better maintained by NDC, there are also trips which will be a nightmare when they have segments of different sources
  • Another issue is the business model. All this new technology will have to be developed and such development costs. While the airlines say they want to inject the same amount of money, just the industry shall distribute it differently as needed, this may be a challenge: It seems like there are more players (such as the aggregators, but also the technology provider of the airline API), which means less money for more entities.
  • And finally, it all comes down to what airlines and GDSs agree upon.
  • NDC is a standard to which airlines can build their API (Application Programming Interface). It is based on XML (I think, the 1st version was actually our XML), which is a language becoming widely successful around the year 2000, to replace an earlier communication language between airlines and providers called EDIFACT (from the 1980s). So, essentially a very old technology is replaced by an aged technology and that is considered “New Distribution Capabilities”. However, an API needs to have a robust schema and XML brings that to the table. Along with NDC, airlines are also changing the shopping process: previously an offer was created by the GDS based on fare, schedule and availability, in NDC, the airline creates the offer and with that can also provide add-ons such as WiFi, lounge access, pre-boarding and other things. In other words, it also allows to personalize offer. It can also mean that a company negotiates with an airlines special business class seats which may only be available to the executives. Consequently, it may help with data collection as well.
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    It sounds so easy to use NDC, but the reality is: Not too many bookings are being made. Why? GDSs won't just give up the battlefield of simple bookings (call it 'easily earned money') and only deal with the complicated PNRs. While I am critical of the global distribution system "oligopoly", the sustainability of the redrawn commercial and technological landscape that NDC could produce has to be questioned. The proposition of NDC means that a "formerly relatively lean distribution chain will become a complicated commercial landscape with numerous airlines, numerous TMCs (or corporations) and several technology providers - all being connected to each other on a technological, as well as commercial, level."
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