18 January 2011
Is Search Powered by the GDS Really Fair? You Be the Judge
In the lines of the usual untruths being floated out there. Here is a key question to ask your favorite GDS. I think its high time to take the challenge and ask this key question once and for all.
Before I answer the headline question let's all be clear about a set of assumptions that seems to be in place.
1. The GDSs are neutral and unbiased
2. The GDS provide full search across ALL airlines
3. The airlines are depriving the GDS and therefore the agents and the consumers of information on all their charges.
4. The airlines are only deliberately trying to change the game and make it harder to figure out the price.
5. All Travel Agents including OTAs provide neutral and unbiased results to their customers.
if you turned each of those assumptions into a question. You would be wrong if you answered yes to any of the above questions in the USA.
1. In the USA GDSs are unregulated by any formal process other than conventional commercial rules. In the EEA certain rules and restrictions exist.
2. The GDSs do not have ubiquitous access to all airlines equally and therefore the neutral search is a COMPLETE fiction. Not all airline participate equally, not all airlines place all content in the GDS, not all airlines are even present in the GDS.
3. The Airlines are compelled by law to display all charges and not hide any charges from the consumer. Further the Airlines have for many years used the Internet not the GDS to communicate their service fee and commercial models with the agency community over the internet because - the GDS systems (known as Co-host or Info pages) are inadequate and costly to maintain. Never once has anyone complained about this process. Almost ALL airlines now use the Internet Web pages to store data that is easier and simpler plus better for the travel agency community at large.
4. The airlines have always tried to obfuscate their pricing and hide the true market price from the consumer? If you want any further proof of the reasons for doing this - just ask AA who tried to create a transparent pricing model called Value Pricing in the 1980s and were forced to recant it because they could get no other airline to join them.
5. No travel agency including the OTAs are required to provide neutral or unbiased information. I should know - I fought that battle with the European Community in 1997 and won the right not to have to. Note that the compelling argument I made was that to force the OTAs to display neutrally as the GDSs are in Europe would force the same rule to be applied to any agent. Meaning that the agency communicty would be forced to tell their customers about ALL suppliers no matter what the customer requested. And just so we are clear - WHO was the company that tried to force that issue? Yup you guessed it a GDS. I wont embarrass the company by naming names but they know who they are.
In the USA it is not required.
Good now that we have that out the way. Can we please stop with the untruths about the expressions and words "GDS" "Fair" and "Search" in the same breath?
Folks this is capitalism. And as long as its fair and the big boys don't beat up on the little ones nor create closed oligopoly rules on suppliers and users.
Cross subsidization by big players to preserve their dominant position is often outlawed on both sides of the Atlantic.
I hope you can accept that there needs to be a little honesty in the debate.
So I am not going to answer the question. I don't need to - it answers itself.
With thanks to Mark Hodgetts Blog for the Image. Check out his blog its quite interesting.