Online travel distribution – Breaking down the barriers

Online travel distribution – Breaking down the barriers

Early travel distribution systems were designed to simplify the fragmented process of searching and booking multiple travel suppliers.

The amalgamation of airline, hotel, car rental and tour operators via global distribution suppliers and viewdata systems certainly made comparative supplier searches far easier for travel agents.

However, the development of travel distribution systems, particularly online travel distribution systems, ultimately became a catalyst for a new age of market fragmentation. Today, fragmentation previously based on barriers to communication has been replaced by fragmentation due to ease of communication. There has been a virtual explosion of travel suppliers and travel intermediaries accessible via the Internet and, as a result, fragmentation has gone full circle.

As widely reported, online travel has grown at lightning speed. According to the Centre for Regional and Tourism Research 2005, in 1998, the value of Internet-based travel sales was €0.225 billion, or 0.1% of total travel industry sales. In 2005, sales were over €22.3 billion, representing more than 9% of total travel industry sales.

The development of online channels has accelerated change in the industry; including the emergence of new types of suppliers (e.g. low-cost airlines), the reinvention of travel packages (e.g. dynamic packages) and changing commercial models (e.g. the merchant model).

The fragmentation of travel distribution channels has also resulted in the breakdown of traditional boundaries within the chain of distribution. Suppliers are unbundling traditional packages in order to distribute contracted supply more flexibly. And travel agents, empowered by new packaging technologies, are creating self-branded packages through easier access to travel components and positioning themselves as virtual tour operators.

Ultimately, travel agents and consumers need technology to serve them better. They need simplified, integrated, systems providing seamless access to all of their preferred suppliers. An integrated search is achieved when all types of travel product can be seamlessly compared via a single search enquiry; including traditional packages, dynamic packages, virtual packages, tailor-made packages and individual travel components.

Furthermore, the integrated comparative search will form part of an optimised and flexible booking journey, governed by business rules, presenting only the products travel intermediaries wish to sell and promoting ancillary sales and upsell at appropriate stages of the booking journey.

Today’s travel technology systems are addressing the longstanding issue of the disintegrated travel search. By investing heavily to integrate structured XML supplier links, sophisticated caching technologies and dynamic packaging services, the capability of travel technology systems to now achieve what has been a highly elusive business requirement should not be underestimated.

The age of the integrated travel search is finally upon us.

Simon Powell, chief executive, Comtec (Europe)


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