"GDSs will remain viable …yet will be pressured to become more competitive"

By EFT Correspondent, recently in Las Vegas

Hotels can develop their distribution 100 percent direct but commercially there will always be a percentage of customers that the indirect channels will deliver that they would not have otherwise been able to reach directly.

So rather than single channel dependency, the game is about distribution control.

Agreeing with the same, Larraine Voll Morris, VP eDistribution, Marriott International told EyeforTravel.com's Ritesh Gupta:, "Effective distribution is all about optimisation, for both hotels and the consumer.   We invest in those channels that are both cost-effective for us and convenient for the consumer.  As long as there are different types of consumers -- leisure, corporate, groups, etc. -- there will be different distribution channels to meet their needs.   They will continue to evolve based on consumers' needs and available technology.

GDS clearly state that it is imperative to provide value to suppliers who provide them content and develop products whether they are traditional, web 2.0 or some new technology.

On this, Larraine, a speaker during `The role of GDS in Distribution' session of EyeforTravel's Travel Distribution Executive Conference 2007 in Las Vegas, said content fragmentation is clearly an issue for GDS users primarily travel agents, as  seen over the past 18 months with the new airline-GDS contracts.   

"What we have seen is a new commitment to full content in exchange for much more favorable economics for the airlines.   While the hotels are currently not withholding content or rates from the GDSs, we are concerned that despite generally declining costs of existing technology, our GDS costs continue to rise.   Suppliers are investing in new opportunities such as the internet and Web 2.0, OTA XML interfaces and mobile technologies.  So while the GDS is a proven, historically cost-effective distribution channel, the trends suggest that major innovation and/or new lower cost transaction models need to be developed for GDSs to compete more effectively in the future."

On how relationship with GDS is expected to shape in the wake up of suppliers looking to lower their distribution costs, Larraine said, "Overall, I think the issue is less about the GDSs and more about distribution in general. Given the advent of new technology and the ability to direct connect more cost effectively, suppliers will be looking for distribution solutions that offer them the ability to easily connect and market to the right audiences at the right value.   If the GDSs continue to provide this service, they will continue to play an important role for us."

"Our brands are very important to us and we always want them promoted properly and effectively in all of our channels.   We look at the GDS as an extension of our own CRS, MARSHA.  In all of our distribution outlets, we adhere to a "single image hotel" policy, which means that we don't differentiate content by the distribution channel.   So, the goal of our brands on the GDSs is the same as it is through our own channels.  The more a GDS can help us promote our brands, the better," Larraine said. "With that said, one of the areas of concern to us, are new products that bias screen displays based on price and other preference criteria that commoditize our brands. We believe that supporting these types of products dilutes the investments we make as a company to drive consumer preference through core product and service strength."