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Summary Travel Technology
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1 Software/technology in the travel industry1.1 General
1.1.1 Terms and definitions
Inventory = the number available products for sale for example: airplane will hold 180 seats,
hotel 250 rooms.
Travel products are sold through computers. If a product is cancelled, the product is returned
to inventory. IT makes it possible to manage inventory quickly and accurately.
Reservation
An electronic record of sale, called a reservation, is used to keep track of the sale. If the
airline or travel company changes the service, for example, modifies the departure time or
even cancels a flight, the passenger must be notified. When the client modifies anything, the
travel company needs to identify the sale and change the inventory accordingly.
Examples of reservations used in a travel agency are a PNR or a PO. A PNR, made in the
GDS can hold many different sorts of segments, from a flight to a rail segment to a hotel
room or a car rental.
Telecom
Telecom is the name of the technology which allows information of hotel rooms, flights, etc.
to be shared by many different people around the world.
1.1.2 Programs and systems used by a travel agent
Hardware are the electronic and mechanical components of a computer.
Software are the set of computer programs or instructions installed on a computer to allow it
to perform certain functions. (GDS, Operating system, browsers …)
Operating systems software Windows or Linux
Applications software which is designed for specific operational tasks MSOffice
Main tools used by a travel agent are front- and back office applications
Front Office Systems: used by travel agents to search for and sell travel products
Tour operating: Belgian Travel Network (BTN4U)
Rail: @lantis
Car rental systems
Hotel: Fidelio
Aviation: Altea Reservations
Back Office Systems: used to carry out internal data processing and accounting functions.
(Servico). The Back Office System allows the travel agent to:
Issue documentation for clients like trip itineraries, receipts, invoices and vouchers
Perform database functions (storing customers’ names, preferences, …)
Generate reports on sales, service fees, agent productivity, profit margins, …
Provide accounting services to track accounts receivable and payable, run reports for
BSP
,Other software used by travel agents:
CRM systems (Salesforce)
Mail applications
SAP
Finance ledger / Accounting software
GDS
MSOffice applications (Word, Excel, PowerPoint …)
Softphone / email distribution / chat tools
Airline direct connect tools or applications
Low Cost aggregators systems
Browsers
1.2 GDS
1.2.1 History and evolution
The airline industry created the first GDS in the 1960’s as a way to keep track of flight
schedules, availability, and prices. The GDSs were actually among the first e-commerce
companies in the world facilitating B2B electronic commerce as early as the mid-1970s.
Prior to this, travel agents spent an inordinate amount of time manually entering reservations
and pricing itineraries referring to tariff books published by ATPCO. The airlines realized that
by automating the reservation process for travel agents, they could make the travel agents
more productive and essentially turn into an extension of the airline’s sales force. It is these
original, legacy GDSs that today provide the backbone to the Internet travel distribution
system.
There are 4 major GDS systems:
Amadeus
Galileo
Sabre
Worldspan
Founded in 1987 by Air France, Iberia, Lufthansa, and SAS, Amadeus is the youngest of the
four GDS companies. Amadeus is a leading global distribution system and technology
provider serving the marketing, sales, and distribution needs of the world’s travel and tourism
industries. As with its competitors, the future for Amadeus will continue to be linked to the
technological and structural changes that are revolutionizing the travel industry.
Galileo global travel distribution system is also known as the Apollo system in North America
and Japan. Galileo International was founded in 1993 by 11 major North American and
European airlines. It is a major player in the GDS business throughout the world: North
America, Europe, the Middle East, Africa, and the Asia/Pacific region. Galileo is a value-
added distributor of travel inventory dedicated to supporting its travel agency and corporate
customers and, through them, expanding traveller choice.
For more than 40 years, Sabre has been developing innovations and transforming the
business of travel. From the original Sabre computer reservations system in the 1960s, to
advanced airline yield management systems in the 1980s, to leading travel web sites today.
Sabre is a leading provider of technology for the travel industry and provides innovative
products that enable travel commerce and services, and enhance airline/supplier operations.
,Since its 1995 advance into the world of Internet technology for the travel industry,
Worldspan has successfully developed the strategies, solutions, and services to ensure the
company’s long-term success in the new web-based world of travel distribution. Worldspan
provides worldwide electronic distribution of travel information, Internet products and
connectivity, and e-commerce capabilities for travel agencies, travel service providers, and
corporations. In 2001, Orbitz LLC was launched on the Internet, using Worldspan as its
Internet Booking Engine, and in 2002, the launch of Worldspan ePricingSM made Worldspan
the first GDS to introduce a revolutionary new multi-serverbased technology, offering an
unprecedented selection of pricing options to all of Worldspan’s customers.
1.2.2 Distribution: Economic model and Value Chain
Suppliers of all sorts load their inventory and fares into the GDS. Airlines do this through
ATPCO. Suppliers pay the GDS booking and ticketing fees for all bookings made through
their systems. Part of these bookings fees are paid to the travel agency in the form of
incentives. The travel agency pays the GDS for the use of its technology.
Aside from GDS booking incentives, the agency often has contracts with the suppliers direct
resulting in another revenue stream for the agency.
The supplier content that flows through the GDS and the resulting bookings generate MIDT
data. These MIDT data the GDS gathers are sold to suppliers and agencies and form an
important source of intelligence for both parties.
All orange lines are content/technology streams, the blue lines are money streams.
Cost per Acquisition = the expense made per customer they attract.
Sales channels can have many forms, they can be direct acquisition through own websites,
brand loyalty and direct marketing campaigns such as sending newsletters to an existing
customer base, or through META channels such as skyscanner or momondo. Google
Adwords is another a very effective way to increase the number of visitors on OTA websites.
The customer will see the search results they are looking for through a graphical interface,
which can be considered as the brand used. Today, OTA’s have many brands depending on
the type of travel offered or the type of customer they want to attract with it (youth/students,
backpackers, families, business men …).
Eventually the booking flow ends at the supplier who will confirm the booking.
, 1.2.3 Offline vs. online
The offline agencies are referred to as ‘Brick and Mortar’ agencies by travel industry
professionals. A brick and mortar agent works through the classic ‘software’ interface
installed on the agents’ desktop. This interface is often referred to as the ‘blue scree’ or
‘green screen’ as historically. Online agencies connect with the GDS through API’s
(Application Programming Interface). All these API’s, together with GDS webservices, are
used to build the agencies IBE or Internet Booking Engine which is the backbone on the
OTA’s website.
1.2.4 Threats to the GDS
Many airlines are looking to avoid the current distribution costs and are both trying to find
alternatives to and ways around the GDS, or are imposing surcharges for segments booked
through the GDS. In 2015, Lufthansa Group, as a first, imposed a 16 euro surcharge for
bookings through the GDS. Early 2017, British Airways and Iberia followed that example by
announcing to implement a similar surcharge later in the year. Also in 2017, American
Airlines announced it would pay agencies a 2 dollar incentive for bookings made through
their direct or an NDC approved channel.
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