GDS Will Evolve Into 'Value Creation Hubs,' Harteveldt Says - 0 views
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Airline distribution will migrate from global distribution systems to “value creation hubs” over the next five years, according to airline and travel industry analyst Henry Harteveldt.
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Value creation hubs, or VCHs, will be aggregators that enable extensive airfare and product transparency, dynamic pricing, and rich merchandising and retailing,
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“The GDSs have served airlines well for many decades,” Harteveldt wrote. “GDSs’ security, reliability, speed and accuracy are among the best in any transactionally based industry. “
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Airlines want more flexible, robust commerce platforms built on contemporary software and architecture,” Harteveldt wrote.
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“Airlines want commerce platforms that can support extensive fare and product transparency, dynamic pricing, rich basic and ancillary product merchandising and retailing and the ability to reliably and securely process the massive volume of shopping sessions.”
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The airlines also believe that new providers who enter the airline distribution and commerce space will generate more competition and better selling solutions,
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They will use the new-generation commerce technology infrastructure that powers airline CRS/PSS host systems and e-commerce solutions, thus reducing the need for lengthy, costly disruption in a conversion to a new passenger services system.
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value creation hubs will be developed with the database-commerce operating and business environment in mind and will be designed to provide extensive fare and product transparency, support dynamic pricing and enable rich merchandising and retailing.
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A key difference between GDSs and VCHs will be the business level at which they operate. Unlike GDSs, which work with individual airlines, VCHs will be developed for each major alliance – Oneworld, SkyTeam and Star Alliance.
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Because the VCHs will operate at a “group” level, rather than at a single-airline level, the VCHs will house a “community link,” similar to the common platform operated by Amadeus, which will function as the “hub of the hub,” he said.
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An important distinction between the GDS and VCH models will be the commercial relationship with subscribers, including agencies and other intermediaries.
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Value creation hubs, or VCHs, will be aggregators that enable extensive airfare and product transparency, dynamic pricing, and rich merchandising and retailing, Harteveldt predicted in a white paper on “The Future of Airline Distribution.” The paper was underwritten by IATA
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They will use the new-generation commerce technology infrastructure that powers airline CRS/PSS host systems and e-commerce solutions , thus reducing the need for lengthy, costly disruption in a conversion to a new passenger services system.
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This article is explaining how Henry Harteveldt, an airline and travel industry analyst, believes that GDSs will evolve into value creation hubs, or VCHs, over the next five years. He believes GDSs have served airlines the best among many transactionally based industried; however, many areas of airline marketing, sales, distribution and e-commerce are looking for more. He specifically states that airlines are looking for "more flexible, robust commerce platforms built on contemporary software and architecture", as well as "commerce platforms that can support extensive fare and product transparency, dynamic pricing, rich basic and ancillary product merchandising and retailing and the ability to reliably and securely process the massive volume of shopping sessions." VCHs will be used to support the high-volume, high frequency shopping, similar to GDSs, and the system will the new technology that powers airline CRS/PSS host systems, reducing the need for costly conversion disruption.