29 June 2011

Sabre AND Travelport Take Big Steps Outside Air with New Hubs

While Amadeus has been retreating to focus on the air business - the other guys seem to be going the other way.

Sabre announced the major acquisition of Softhotels which will beef up their Hospitality business - already a vibrant component of Sabre and a major force in hospitality.

Travelport - free of the GTA boat anchor business - has now started a new Agent based leisure service for non-air.

Both of these announcements demonstrate the need of the core business to expand. As the GDS component of the Big 3 GDS companies declines and the market moves to a more open model - we can expect this form of behaviour.

However - for those of you who watch the space carefully - will this be a worthy replacement for the standard GDS business?

Well in my view the GDS yields will be hard to find replication for Travelport unless the former sink below 20% which seems to be on the cards. For Sabre this is a complimentary business and looks to help them in their quest to edge Pegasus out of the nest as the central player in Hospitality distribution.

1 comment:

Mark Lenahan said...

Somewhat related, Carlson Wagonlit Travel have just launched a non-GDS hotel reservations tool.

I think GDS are moving into a crowded market. Pegasus might be big, but are by no means the only game in town, there are dozens of large intermediaries with their own contracting capability or integration with the yield/channel management systems that hotels use. There's a lot of complexity around content, inventory and allocations and release, packageable rates, net/merchant rates, BAR, etc. GDS have typically concentrated on collecting a commission on bookings where the hotel is the merchant at check-in or check-out. A lot of the existing hotel intermediaries do far more than that.

Scale matters, how many people can they put on the ground talking to hotel managers?