20 February 2009

The Great Content Emperor's Clothes

I have followed the debate on Sabre's cancellation of one of its development contracts with interest. Many regular readers of this blog will note that I believe the GDSs are going through radical change no longer of their choosing and that they need to be realistic with their GDS cash cow business model.

First I will defend Sabre's right within the appropriate legal constraints to make its own decisions about who it does business with. However I do find it somewhat amusing that Sabre is laying claim to a position that is essentially at best untenable and probably not true. Namely that they are providing a complete aggregated content service.

But this behavior is not new. GDSs attempting to control the world. Consider in history when the GDSs used to provide everything - the access, the network and the content. Lets rewind the clock to circa 1987 when they did provide the entire system. Even then the GDS's access to content was inadequate. There was no access to many remote, regional and international airlines. They did a poor job in hotels. etc etc. They fought tooth and nail against companies like Lanyon who provided independent open PC access to the GDS systems.

Fast forward to today and the GDS no longer provides a network. They no longer provide the hardware for access and their share of content provision is even less. So the claim of complete aggregated content is somewhat hollow.

Further the the market has been de-regulated. Airlines are not forced to participate in the GDSs and GDSs are not forced to accept participation from airlines. In effect it should be a free market. Even in Europe as I have noted before their share of content aggregated or not has been steadily falling.

The GDS share of total traffic has been falling worldwide. As we have seen from recent statistics - ARC transactions are falling faster than airline passenger traffic. Expedia's traffic this week confirms transaction counts are falling faster than traffic counts. This bodes ill for GDSs who today almost exclusively power the agent based traffic.

But shhhhh don't tell the Courtiers in Dallas. If they want to carry on believing that the company is truly the Content Emperor then perhaps they need to examine the quality of the cloth. I think somebody sold someone an invisible suit.

So who is the child who is going to tell them the truth? Since the Professor is a little old - I cannot say for sure if that suit really has this great cloth. But I am sure that there are many others with younger (better) eyes than me who really can see what is going on.


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