Questioning the travel industry status quo, one blog post at a time

Posts Tagged ‘supply chain’

Did you see Friday’s Beat commentary by Joe Da Rosa from Balboa Travel, in which Joe voiced his strong opposition to the commoditization of travel agency services?

Now I’ve known Joe for ages—all the way back to my System One and Amadeus days. Anyone who meets Joe instantly knows he is a professional, a gentleman, and a leader… and from what I know of Joe, it takes quite a bit for him to “get his dander up.” So, knowing Joe, his agitation must be justified, and, in this case, I think he’s absolutely right.

Travel agencies invest in people and resources. They work very hard to compete for their business, and the last thing they need is for anyone to view their products and services as commodities. It is absurd, preposterous, outrageous… and if the holidays weren’t upon us, I would really go off here.

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I must say, I’m quite astonished after reading a recent article by Charlie Leocha at Consumer Traveler. In “The New Airline Luddites,” Mr. Leocha is quite critical of the airlines and calls them, well, luddites. For those that don’t know the definition of “luddite” it is one who opposes technical or technological change.

Whoa. That’s a pretty hefty jab. I mean, airlines are pretty technologically advanced. After all, they do manage to get a 90-ton aircraft off the ground and keep it up in the sky (I still don’t get how that really works). So calling them luddites is, I think, quite false. Read the rest of this entry »

For someone who travels as much as I do, sleep is at a premium. Besides being a time for me to regain my strength, it’s also a time to escape the trials and tribulations of daily life. I mean, I love those dreams where I’m Indiana Jones. You know, chasing the bad guys, winning gunfights, and of course, recovering the gold. Or the ones where I’m a Pro Bowl quarterback throwing the game-winning touchdown, giving the postgame interview, then giving some kid my game ball as I tussle his hair on the way to my helicopter.

Now those are fun dreams. An escape. And let me tell you, there is nothing worse than dreaming about work. I’m awake worrying about work 16 hours a day. The last thing I want is for it to start permeating my dreams. But sure enough, the other night I had a dream about what the conversation must be like these days between a Corporate Travel Manager and a Travel Management Company. Yeah, I know, not nearly as exciting.

Luckily for us, I was able to film one of my dreams. Don’t you imagine the conversation between Ms. Corporate Travel Manager and Mr. TMC would go something like this:

A Bobblehead’s Corporate Travel Manager Dream

It has been a bit challenging of late to find something positive to blog about when it comes to innovation and our industry. It seems conflict trumps innovation in most current discussions and debate. Well, that changed a bit today in Dublin, Ireland. It may not last, and probably won’t, but it changed for a little while.

 

I am at the Datalex Annual Customer Conference here in Dublin. They actually invited me, and I am honored to be here. And, a bit humbly, I must give Datalex credit and kudos for pulling together a rather unique customer event—unique not in venue, although welcoming and even a bit historic, nor in structure, but rather in content and approach. From the very beginning I got the sense that industry norms would be challenged, status quos pushed to the uncomfortable, and productive, yet provocative debate would rule the day… and it did. In other words, no one dodged or sugarcoated the issues.  Okay, “no one” may be a bit of a stretch, but when someone did, they were immediately called to the carpet. Tough, albeit, wonderful crowd. Read the rest of this entry »

I am sure if you were a fly on the wall at Blockbuster HQ a while back you would have heard these words: “That new Netflix strategy is simply misguided.” And similarly, in the hallowed halls of Kodak you most definitely would have heard something like, “Digital photography, talk about a misguided strategy.” Or the countless brick and mortar retailers that failed to develop an online presence because they thought Amazon.com’s distribution strategy would “never work.” My guess is that the folks who uttered those words are no longer employed by their respective organizations. In my humble opinion, those folks failed to recognize the power of the technology that was responsible for bringing about that “misguided strategy”

Copyright JJAVA / Fotolia

Yet, I continue to hear some in our industry say, “this new direct connect strategy is misguided.” So, do the same technological principles that radically changed the company strategies mentioned above apply to our industry? That is a great… Ask The Question.

To assist in getting to some of those answers, I refer you to an essay recently written by Richard Eastman, who as many of you know has been at the forefront of travel and related technology for years.

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You can just imagine my delight when I read the Beat article titled, Travelport: Innovation Comes With A Price. I was almost giddy. A GDS finally discussing innovation investment! According to Travelport’s chief, a new world is coming “with Universal Desktop, Universal API, new types of content and so forth.” Yet, all this new content connectivity (music to my ears, by the way) “comes with a price.” Well, yeah, innovation ain’t free. We’ve been innovating for a number of years and our investors will certainly tell you “innovation comes with a price.” But I thought the principle of innovation was to make an investment up-front in order to reap the benefits on the back end. But anyway, I’m digressing. It’s just interesting to note where this particular GDS is saying this price for innovation will come from. It sounds like the travel agencies may be paying the GDS for innovative technology solutions. Read the rest of this entry »

Farelogix disputes BTC after BTC disputes BA’s Richard Tams’ claims that the current travel distribution model is broken.

When many of your customers (customers who pay you A LOT of money) are unhappy with you, unhappy to the point of filing an antitrust lawsuit, I’d say something is at least askew, if not broken.

And calling the current model “broken” is not “fashionable,” as BTC’s Mitchell claims. Skinny ties are fashionable. Calling the model broken is an assessment by several of the world’s largest airlines and industry analysts.

But I must be a benighted person because I had to look up ‘benightedness.’ However, accusing those who take issue with the current distribution model of being ignorant borders on downright vitriol.

Do the GDS provide a valuable service model? They sure do. Do they need to update? They sure do. They claim taking XML connections is no issue. But if it’s not an issue, why not take the connections? These new airline direct XML connections allow for a more personalized shopping experience, far greater pricing transparency and easier reporting of the abundant optional services offered by airlines. All this can be accomplished by simply taking the XML.

Is the distribution model “broken?” Perhaps. But to dispute a claim from an airline (that pays the GDSs’ bills) that the model is broken, now I dispute that.

John "The Ohio Icicle" Sherman

Anyone who follows the airline travel industry in the slightest knows it has quite a kerfuffle on its hands. With airlines suing GDSs (and their affiliates) for anticompetitive practices, and the GDSs calling the lawsuits “baseless,” it’s hard to keep track of what’s going on.

It seems based on my straw poll that while lots of folks have their opinions on these various lawsuits, a threshold impediment to understanding the situation is that few people know what this Sherman Antitrust Act really is. At best, it is a distant memory from our high school US History class. For the sake of clarity, the Sherman Antitrust Act of 1890 is named after very former Senator John Sherman of Ohio, most notably referred to as “The Ohio Icicle.” This measure was passed to prohibit “trusts,” based on Congress’ power to regulate interstate commerce. A trust for these purposes has been defined as an arrangement by which stockholders in several companies transferred their separate company shares to a single set of trustees that then manage those unified shares for the benefit of the different stockholders. The combination of those separate interests into one common interest tended to destroy competition.  Read the rest of this entry »

The Department of Transportation is delaying any decision to force airlines to utilize the GDS-mandated methodology for selling and displaying ancillary services. They are delaying their decision because they “lack additional information about costs, benefits and consequences” of requiring carriers to provide that information to the GDSs. It’s easy to understand why DOT has more questions than answers. We can just look at some of the recent comments by industry brass. Airlines now support a standardized XML for their direct connect whereby the airline can, in a fully transparent way, offer its best and most relevant product. What is standing in the way of the GDS simply connecting to those airlines? The GDS clearly express it is not a technology or “XML” issue, as recently stated by a Sabre official in The Beat. Read the rest of this entry »

Farelogix is highly supportive of management and settlement standards being developed around the merchandising process.  We have been the leaders in developing the first ARC certified EMD (both EMD-A and EMD-S), which is in full accordance to the IATA reporting standard. Farelogix merchandising solutions also fully support ATPCO fare filings if airlines opt to use ATP instead of alternative merchandising solutions in the market.

However, Farelogix is concerned about the recent announcement to extend the “standards movement” to the actual airline product definition and sales process. Read the rest of this entry »