By XXXXXXXXXX
“If you are a big company and you do the vast majority of your bookings through direct connects [with Lufthansa and BA], that affects your relationship with the GDS. It puts the whole commercial model on a different level”
value added work. Data and analytics can also serve up much more relevant content to mobile apps, while delivering content in a way that matches the change in traveller shopping. And all of this, in terms of mobile, data and analytics, improved personalisa- tion and intelligent automation, is going to require even tighter alignment between TMCs and their technology providers if TMCs are going to address and capitalise on the opportunities ahead of them.” Festive Road’s Tilstone believes that
even though TMCs have survived exter- nal influences such as 9/11, self-booking tools and the rise of procurement, they are facing a grave threat now. “I do think this is a more fundamental moment with all of those forces coming to a head,” he says. “It is a challenging time for TMCs, but also a huge opportunity for them to start differentiating themselves.” Clarity’s McDonagh argues: “Things
evolve. The industry dealt with the removal of commissions and moved to a transaction fee model. As the TMC does more consul- tancy work and clients realise the value for that, there will be a willingness to pay, but the customer has to see a return on investment.”
ROLE OF BUYERS Buyers will be crucial in this new operating model. “They are in as much of an infor- mation-gathering mode as their TMCs at this stage,” says Tilstone. “TMCs can work with buyers and design their future roles together. It takes a certain mindset, invest- ment and time.” While Lufthansa Group and British Airways have started levying distribu- tion charges, what does it mean for TMCs booking with other airlines? “If you are a big company and you do the
vast majority of your bookings through direct connects [with Lufthansa and BA], that affects your relationship with the GDS. It puts the whole commercial model on a different level,” says McLeod.
BUYINGBUSINESSTRAVEL.COM If they do not make money on bookings
with Lufthansa and BA, it is clear that GDSs may have to put up the costs for other air- lines, which may force the issue. On the other side of the coin, this may
affect the GDS incentive payments. “Any TMC that relies on income from GDS sector payments is not being run in a sustainable fashion and that may come home to roost,” says Clarity’s McDonagh. However, Travelport’s Broughton says
that, at least currently, changes to the present structure of GDS incentive pay- ments to TMCs are “unlikely”. Tilstone believes not all TMCs will survive these changes. “A number of TMCs
have got caught in a commoditised game of who can get lowest pricing and no other way to demonstrate value.” Tilstone adds, “For the owner-managed
TMC who started 35 years ago, say, does he or she have an appetite to fundamen- tally change what they do? Probably not. Are they making reasonable money at the moment? Probably. What they will do is then sell to another TMC at a later stage.” Ken McLeod, on returning from IATA’s
recent Business Travel Summit on NDC, was clear on one thing. “Actually, nobody knows where this is going to end up.”
The future shape of the large TMC
IN A RECENT INVESTOR PRESENTATION, HRG outlined a vision for the future of the corporate travel market. The company said that the market today was siloed, and characterised by market-specific GDSs, limited direct connects, lengthy compliance processes, and slow and inconsistent data and reporting.
Its vision is one in which the TMC aggregates rich content and offers from a range of GDSs and direct connections and presents this to customers in real-time through every possible channel, with
consistent service levels and content, irrespective of the market. Direct connects
are a key focus. The company said: “We have already successfully implemented airline direct connect solutions for a large German client [Volkswagen] and see further demand for these solutions going forward.” It adds: “We have also started work on our enhanced ‘Direct Connect Platform’, which will enable HRG to remain the market leader as we enter the next phase of travel distribution. Within our global
branch network we have
continued to deploy our ‘smart’ booking app agent desktop and our unified communications strategy. This paves the way for further enhancements as we create an omni- channel digital end- customer platform to enable us
to communicate in multiple ways.”
So, what do people think of this approach? Festive Road’s Tilstone says: “HRG definitely stands out. It has made a fundamental decision about who it is. That is a big tick. Has it got it right? Only time will tell.”
BBT July/August 2017 35
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104