Niklas Andreen, Travelport group vice president, hospitality & partner marketing, said, “GDSs have to evolve with the times, 70% of Expedia’s revenues come from hotels. Our revenue model will evolve as well. One day, we will get to the stage when we will say “non-hotel” as opposed to “non-air”.”
He said that in five years time, he wants Rooms and More to “be the most relevant hotel channel for travel agents, corporate, leisure or mixed, and when booking hotels, we are top of mind”.
He said it was critical GDSs evolve with so much change happening in the market that was changing customer behaviour and the way they book hotels. “There could be names coming up that neither you nor I have ever heard of and with so much change happening, everyone – wholesalers, tour operators, travel agents – have to evolve.”
Andreen was speaking to WIT on the sidelines of ITB Berlin where he had taken part in a panel discussion which, yes, once again raised the spectre of the demise of the GDS due to the changes in the market.
One, more customers are now booking hotels first, and then look for flights around accommodation. The GDS model was built around air and remains first and mostly about air.
Two, Google Hotel Finder allows customers to do comparative shopping for prices on one page, and go straight to the hotel website to book. Richard Wiegmann, CEO of Trust International, the first hotel reservation system selected by Google to work alongside online travel agencies and chains on this new service, said, “Google Hotel Finder has the ability to change the way consumers look and book for hotels just like the “normal” Google search did it for all of us on the web.”
What this means is increased opportunity for hotels to grow their direct channel. Said Wiegmann, “I do believe the hoteliers do like the fact that the business through HF can come direct to their websites and IBEs. A clever hotelier will grab that customer and try to turn it into a repeating direct relationship through his website.”
Three, mobile is giving travellers the means to book as last minute as possible. According to Wiegmann, four percent of bookings on Trust are on mobile and 11% are mobile-enabled and the distance between booking and hotel location is now 20 miles.
Remko West of Xotels was pretty steadfast in his view that GDSs would disappear from the hotel distribution game eventually “because they are based on technology that’s more and more outdated”. “In general, they cannot cope with the technological changes,” he said.
Wiegmann said, “If GDSs do not change their business model, and they continue to depend on airlines, they will be dead but many are now investing in hotels.”
Travelport’s Rooms and More is largely based on hotel metasearch engine Sprice technology which it acquired in May 2010. Andreen calls it a “meta-book”. It allows travel agents to search across 13 different aggregators, most of whom include the big names in hotel content such as Expedia and booking.com. Travel agents then see the offers from these providers and the different commissions attached.
Andreen says the system will give agents the confidence that they have access to good rates and thus, can assure their customers they are being looked after. Travelport invoices the aggregators and collects the commissions for travel agencies. Travel agents also get access to consumer-written hotel reviews about each property.
Said Andreen, “We help agents keep all the information together in one place. We give them the tool to be comfortable that their customers are being looked after in the right way.”
He estimates that Rooms and More has 200,000 to 300,000 of an estimated half a million hotels around the world in the system. Currently, three out of the top five markets for Rooms and More are in Asia.
“it’s easier to evolve your business when there is growth. In Europe, it’s a fight for survival. Agents in Asia have a unique opportunity to leapfrog a lot of of agents in Western Europe and the US in how travel is transacted.”
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