The industry has yet to find a common platform for distribution. So why is it taking so long and, with the continuing development of technology, is there still a need for it? Linda Fox finds out more
Vision, money and balls are what it’s going to take if any progress is to be made on the issue of a common platform for travel distribution. Several attempts have been made in the past, which led to the development of some common standards but generally most initiatives have fallen by the wayside or, more accurately, on deaf ears.
A common platform would create business efficiencies, reduce costs, level the playing field and eliminate waste in terms of the amount of duplication of effort being done to develop interfaces to all these new third-party bed stock, tours, transfers and flights.
But, there are a huge number of reasons as to why little common ground has ever been found, ranging from a lack of understanding between IT departments and operational people, to little knowledge of the potential value it could bring to the bottom line, and the list goes on.
Mike Cogan, a partner in travel technology firm Equinus sums it up: “There was never any buy-in from high up in the organisations. There was no recognition that it would have benefit for them as trading partners. There were attempts to get the attention of the implementers but those people come from marketing and operational backgrounds and don’t understand it.”
Add to that a mistrust of the suppliers and options, aggressive market competition, low margins and the capital investment required and it’s enough to sink any good idea.
Then there is the technology itself, the core legacy systems in the background, and, with the advent of the Internet and online booking, the need to take a multitude of holiday content and push it out to multiple new channels while simultaneously receiving additional content from third-party suppliers just to stay in the game.
BlueSky Travel Systems founder and director Steve Driscoll says: “You would think each tour operator would have one single platform within their own individual groups, but only now are we starting to see the technological capability to be able to adopt a single platform across a diverse group.”
And today, the barriers to a common distribution platform have moved on. While much functionally richer technology is available, making the idea more feasible, the focus is no longer on common processes to conduct business. When XML came along, the entire communication process became much easier and smoother and almost satisfied any appetite for a common platform. Most experts acknowledge that there is duplication in terms of interface development to all the bedbanks and third-party flying, but the cost of that development has come down significantly.
Netizen Digital managing director Lewis Lenssen says: “Technology has evolved so the pressure is less. It’s quite easy to transform one message into another format.
There is money being wasted, but is there enough incentive to put all that effort into defining a common standard when the savings would have to be divided across a lot of companies?”
Market forces have also shifted focus on to the importance of the web as a retail channel and how to improve the online experience, the shelf life of brochures and the recent consolidation and subsequent integration.
Dolphin Dynamics president Roberto Da Re says: “We have almost leapfrogged the idea of a common platform and tour operators are better off focusing on having a good reservation system at the back-end.”
Traditionally a supplier of technology to the agency market, Dolphin has recently taken a step into the tour operator arena with a system, it believes, will act as a much-needed solution at the back-end.
Da Re says: “To me the common platform is the language these systems talk to each other in.”
Even if all the other barriers had not been in place, it would have been difficult to persuade an industry that lives hand to mouth of the benefits of investing in technology when it was enjoying unprecedented growth because of dynamic packaging and the online push.
GTA vice-president of application development and former Cosmos IT director, Alister Beveridge, says: “If anything, the barriers are less, but stronger than before. In the past everyone built their own systems because they could not get a platform unique to their business.
“Since the move into online selling it is much more competitive and everyone is trying to retain a unique selling point to their business. It’s not a valid concern because every customer has the ability to customise their platform.”
The final nail in the coffin of the quest for a single standard is the concern that it would create a dominant supplier.
Da Re says: “If you had one company you would have a monopoly and it would not work.”
Therefore any attempt to get an initiative off the ground would have to be led by a consortia of tour operators, other suppliers or an industry body such as the Association of Independent Tour Operators or the Federation of Tour Operators.
Anite Travel director Ed Spiers says: “A common platform is not going to come from a travel technology initiative, it is going to come from a best of breed approach that the big players take, and once they have done that then other people will adopt those processes.”
While the travel industry is busy concentrating on newer technologies and hoping sticking plasters will keep legacy systems patched up, it’s interesting to see what progress has been made in other industries with parallels in terms of legacy technology and the volume of transactions.
While some sectors have managed to achieve some common ground, it’s difficult to name one that has managed an end-to-end platform adopted unconditionally by everyone. According to Lenssen there was a huge initiative in the insurance industry to try to find some common standards.
“In my experience, it is extraordinarily difficult. To bring together a bunch of people who are competing, you tend to have to see the benefits quite quickly. What worked was where people targeted quite small elements of data.”
The banking and investment management sectors are also good examples where some common ground has been achieved, such as the BACS system.
Adam Farrell, head of business development at DBFS, which specialises in systems for the investment banking sector, says: “What I don’t think the travel industry does very well is borrow from other industries. People seem to be frightened of exploring and look at where things have been done well.”
Despite the volume of reasons why there has been little common ground up to now, there are some areas where improvements could be relatively simple.
Brochure production is a good example, because the closure of shops has reduced distribution points for customers but tour operators need to continue to have that visibility.
Tour operators are therefore spending a fortune posting out brochures when many could be put into electronic format. Web technologies could be another potential area for common development with everyone using and needing elements such as marketing and analytics software and even payment solutions.
Further ground could also be made in the existing way companies communicate with each other.
RWA business development director Mark Bradbury says: “Better interchangeability of product is what we will get to. There is a need for commonality in being able to exchange information and common services that people can hook into.”
The remaining burning question is where does the industry go from here? Newer entrants have managed to gain considerable ground in the past 10 years from a standing point, and the more traditional industry was initially slow to react. Package operators have now regained a lot of the ground online but that’s at the expense of legacy issues.
Equinus’ Cogan says: “Until somebody grabs their attention and says we are up against competition from outside our sector of the market and facing challenges that we have not had before, no-one is going to come to the top. Direction is set from the top and it never gets their attention, it is not sexy enough.”
The quest for common a system… the story so far
The first attempt at standardisation came from an initiative called GTI – Galileo, Thomson and network provider Istel (X-TANT). While the three were happy to work together, other parts of the industry felt they were not part of the club and declined to get involved. In addition, many felt there was no need to invest in anything else because Viewdata was working well.
There have been a number of attempts by the Travel Technology Initiative to achieve some sort of standardisation and projects such as Rescon – a standard Viewdata confirmation window – came out of it but there was no real desire to implement it.
A project called T4, involving the IT directors of the top four UK operators, led to the introduction of TTI-developed systems Topas (Tour Operator Product Availability Standard) and Torix (Tour Operator Reservations in XML) both built around XML technology. Elements of the technology were adopted and it was a really good starting point but things have moved on since.
Case study: Cadogan Holidays
When marketing and sales director Geoff Lawrence joined Cadogan Holidays more than a year ago he realised the legacy tour operating system would not be in line with targets to develop the business.
The system had been on the market for at least 10 years and was good for standard mass-market holidays with little flexibility and no need to be dynamic.
“It wasn’t a system for the modern world, with numerous customers in terms of holidaymakers and suppliers and the flexibility and management control we need.”
According to Lawrence, the technology was unable to respond to the increasing demand for bespoke holidays and multi-centre trips.
Cadogan received information from 35 companies after an initial RFI process and finally narrowed it down to two suppliers. Travelink was picked because it was better at the front-end than other systems.
The new system will be run in parallel from the beginning of December to give Cadogan a month to bed it in before the peak selling period in January.
“These projects are enormous and it’s not just taking out one system and putting a new one in. It’s almost a re-engineering the business.”
Coming towards the end of the process Lawrence feels there were not that many systems available that met the needs of Cadogan. The problem lay in how flexible the systems were and how they handled product, pricing and reservations.
He also believes the idea of a common industry platform is long gone because connectivity issues have been solved but each system has to support the business strategy of the individual company.