Traditional GDS model has evolved from the CRS: Abacus International

By EyeforTravel.com Correspondent

The GDS model in Asia, like elsewhere throughout the world, is undergoing change. The airlines are conscious of what they pay for distribution and maintain a constant pressure on GDSs to reduce distribution fees, says Peter Smith, VP e-commerce, Amadeus Asia Pacific.

Don Birch, president and chief executive officer, Abacus International says, “The traditional GDS model has evolved from the CRS. Over the years, it has matured into the technical travel platform relied upon by the entire travel chain. Primarily used by airlines to distribute their capacity globally, other travel suppliers especially hotels are beginning to understand the comprehensive and cost effective distribution provided by GDSs.  In addition, as more and more travel goes online, GDSs will continue to be important suppliers of both content and functionality. Asia is at the beginning of this journey.”

EyeforTravel.com’s Ritesh Gupta got in touch with both Smith and Birch ahead of Travel Distribution Summit, scheduled to take place in Singapore, next week. Excerpts from the interviews:

How do you assess the current status of the traditional GDS model in Asia?

Smith: The GDS model in Asia, like elsewhere throughout the world, is undergoing change. The airlines are conscious of what they pay for distribution and maintain a constant pressure on GDSs to reduce distribution fees. At the same time, travel agents have also become conditioned to obtaining the highest quality of information technology and access to content through the GDS providers, much of which is available at low cost.

These changes have meant that Amadeus has had to become much more strategic in its offerings. That is why Amadeus invests tens of millions of Euros in R&D each year, to ensure that airlines and the travel agents have the most cost effective, efficient and reliable channels to market, which is extremely important for the success of their business.

As it stands, Amadeus distributes content to around 385,000 points of sale located in over 215 markets. The Amadeus Selling Platform (Vista) allows over 85,000 travel agencies and 11,000 airline offices to make bookings on around 500 scheduled airlines and low cost carriers. It provides access to over 57,000 hotel properties and 42 car rental companies serving over 30,000 locations.

Another major change is the recognition that non-air content is a growing area. Amadeus already offers extensive hotel, cruise, insurance and rail content distribution. And while the uptake has not reached the same level as air content, there is a vast opportunity to move travel agents into added value space through the sale of ancillary transportation and content. There are significant benefits for the travel agencies and for the suppliers in booking non-air content through Amadeus. More and more agencies are recognising this and are driving their consultants to book through the GDS channel, providing secure bookings, secure commission channels, back-office integration and statistics.

Birch: The traditional GDS model has evolved from the CRS.  Over the years, it has matured into the technical travel platform relied upon by the entire travel chain. Primarily used by airlines to distribute their capacity globally, other travel suppliers especially hotels are beginning to understand the comprehensive and cost effective distribution provided by GDSs.  In addition, as more and more travel goes online, GDSs will continue to be important suppliers of both content and functionality.

Asia is at the beginning of this journey.


How do you expect the GDS model to shape up in Asia? What impact will this have on travel providers, agencies and the end user?

Smith: It is clear that Amadeus is providing leading-edge solutions that are customer–centric, not only in their pricing, but also in the design of the solutions. We must continue to help our customers achieve cost efficiency through the use of our technology. That means providing travel agencies and their customers with faster, more reliable and easier access to a wider range of content and pricing options. 

The technologies that Amadeus offer will for instance, allow the mid-size agency to move to an online environment relatively quickly and on a pay-as-you-go basis.

This is important as there will be new players and perhaps, even new points of distribution, which will compete with travel agents and the GDS. We are already familiar with the customer-direct strategy adopted by the airlines and we are also seeing the emergence of mega online travel agencies; Amadeus must ensure that our customers can effectively compete in this space. 


Birch: In Asia, the GDS model will have to expand its travel offerings as the preferred single point of sale for travel.  In addition to its air content, the non-air content and travel information must be rich and easy to book to drive usage.

By building and aggregating the content, and focusing on pushing it out through a single point of sale, the travel agent will not only remain the best source of information to meet travel needs, but it will also become the solution to quick and easy turn-key travel solutions.


What’s on your agenda in 2006?

Smith: There’s no doubt that we will continue to invest heavily in the development and sales of our IT solutions for airlines, hotels, corporations and travel agents.

In looking forward, there will be a simplification of airline faring, not only to help the airlines internally in managing fares, but also for the benefit of the consumer who needs to be able to quickly assess a variety of dates and prices and even times within the date range, in order to make an informed and preferred purchase decision. 

The good news is that we are able to demonstrate absolutely that our solutions deliver an improvement in bookings and yield due to up-sell, and an increase capacity of the provider to manage service fees and alterations.

Birch: As the leading travel distribution company in Asia -Pacific, Abacus’ expertise and capabilities in this region are unmatched by any other. One out of every two travel bookings in Asia is done on an Abacus system. 

In 2006, Abacus will continue to focus on its core business – to develop and strengthen our relations with airlines and travel agents to deliver the best content, solutions and systems along with the quality service and value that Abacus represents.

We’re also planning to remain focused on working with our suppliers to expand further into content such as car rental, cruise bookings, rail and travel insurance, as well as complete tours. 

Our aim is to help the entire travel industry to make the most of the Asia-Pacific travel industry growth. To help our travel partners understand the potential of the growth and to assist them to adapt to the changing patterns of travellers, Abacus will continue to analyse industry issues, research traveller habits and anticipate customer requirements.

We’re predicting that for Y2006 the region’s growth figures for travel will be between 4 to 6 percent increase in bookings.   

To capitalize on this growth potential, Abacus’ primary focus in 2006 is to help to create true value for all the participants and so help our customers build the future of travel.