electronic distribution overview

8/7/2019 Electronic Distribution Overview

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ELECTRONIC RESERVATION

DISTRIBUTIONin todays World

and where does it fit


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EDS

The EDS is composed of two major components:

The GDS or Global Distribution System. A means ofelectronic booking airlines seats, car hire hotel rooms andship cruises only by Travel Professionals (mostly agents)

The IDS or Internet Distribution System. A means of

booking the above services by chanelling potential enduser bookers (self bookers) via the existing GDS ordirectly through the Internet system.


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Graphic overview of the EDS

Internet Distribution

Direct ConnectPartners includeAOL, Yahoo,Verizon, Delta,100+ ConventionBureaus, 40+ HotelLodging Assocsand 30 StateTourism Bureaus.

eCommerce

Web Sites Travel PortalsWeb Sites

Hotels, Resorts

and Chains

Associations,

Memberships

and Destinations

Call Center

Inbound Voice Outbound Voice

Private Label

Full-Time Reservation Outsourcing

Overflow and After-Hours Calls

Travelers Support Desk

Next Generation Seamless GDSConnectivity INCLUDING AutomaticRate, Availability, and HOD Content

Updates and Distribution

Internet Distribution System(IDS) Connectivity INCLUDINGRate, Availability, and Allotment


Hosted Web Siteand Travel Portals INCLUDING

Internet Marketing

Call Center Reservation andSupport Services

Travel Agents

Online Agencies

Others

Brick & Mortar

Agencies

Integrated SingleDatabase

with Single ImageInventory

ReservationDelivery via

XML Interface,Email or Fax

Rates, Allotmentsand HOD Content

via core Extranet

ReservationDelivery via Email

or Fax


via core Extranet

Hotels with epitome PMS Hotels with 3rd Party PMS Hotels without a PMS


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Major TRAVEL DISTRIBUTION CompaniesWho owns who??

GDS Leisure Corporate Affiliate TravelAgency TimeShare DSP

Galileo,WizComSwitch

CheapTickets,Lodging.com,

Orbitz

Travelport,Orbitz forBusiness

Lodging.com,Neat Group

ThorConsortium

RCI

WizCom,Trust Intl,ShepherdSystems

SabreTravelocity,

Site59,

Travelchannel

TravelocityBusiness,

GetThere

TravelocityPartner,

Travelocity,

Site59,Nexion

World ChoiceTravel

None

SynXis,Sabre

Distribution

Technologies

None (1)

Expedia,Hotels.com,

Hotwire,Anyway.com,

TV Travel Shop

ExpediaCorporate,Metropolitan

Travel,Egencia

WWTE,Expedia,

Hotels.com

ClassicCustom

Vacations

IntervalIntl

NewtradeTechnologies

AmadeusOneTravel.com,

Eviaggi.com,

Opodo

e-Travel OneTravel.com Vacation.com None None

PegasusSwitch

HotelBook.com,TravelWeb.com

NoneOnline

DistributionDatabase (ODD)

CommissionProcessing

ServicesNone

Utell, Unirez,PegasusSolutions

(1) Primary GDS Partners are WorldSpan and Sabre

SOURCE: PhoCusWright Inc.


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GDS SwitchCentral Reservation Systems, CROs

and Representation FirmsInternet Sites Others in Play

Amadeus PegasusHotel Information

SystemsSceptre* Expedia.com Datalex

Galileo WizCom Chouinard &Myhre Supranational GetThere.com Google

SabreColumbus

ReservationsSynXis Hotels.com HBS

WorldSpan GenaRes TravelCLICK* Hotwire.com Lanyon

Historic Hotels * TRUST International Orbitz.comMICROSFidelio

iHotelier UniResPlacesToStay.co

mNewmarket

Innlinks* Utell* Priceline.com Ramesys

InnPoints* Vantis* Site59.com Revelex

Kerry Hotels* WORLD Hotels* TravelWeb.com VAS

Leading Hotels* Travelocity.com Yahoo

LUXE Hotels Travelscape.com

Pegasus Trip.com

Preferred Hotels* WorldRes.com

Leading PLAYERS in the Game

* Representation company only which utilizes a 3rd party CRS


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FACTS about Electronic Distribution

In 2005, approximately 32 million US householdsused the Web to buy leisure travel, for which they will

spend approximately $64 billion.

By 2009, this will reach 46.4 million US households,spending nearly $111 billion. Vacation packages,cruises, and hotels are poised for the greatest growth.

SOURCE: Forresters Consumer Technographics North American Travel Online Study


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Online Travelers PROFILE

The typical Booker has been

buying online for 3.3 years,and while they buy 60% oftheir trips online, that stillleaves a solid chunk boughtoffline.

M

iddle aged adults, almostevenly divided among menand women.

Well educated, upper-middleincome earners the averagehousehold income of

$80,361/year. They travel regularly,

spending $3,484/yearonleisure travel.

They stay at hotels 2.8

times/yearfor leisure trips.


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FACTS about Online Travelers

Online long-haul leisure travelers online

leisure travelers who have taken a trip outside thecontinental

US in the past 12 months represent 25% ofonline leisure travelers. These travelers earn

more, travelmore often, and spend more than other online leisure

travelers. They also view the Web as anintegral

part of their travel planning and purchasingprocess. Web agencies top the list of where onlinelong-haul travelers research and buy leisure travel,but these travelers will continue to rely on both onlineand offline sources and will continue to reveal the

nuances when it comes to price.


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FACTS about Online TravelersY generation online leisure travelers young

adults age 18 to 24 are influencing massive changesin how travel is distributed, marketed and sold. Thats

because this is the first true Web generation oftravelers a group that, as a whole, ignores offline

points of sale and has no brand loyalty. This groupis more likely to fly than older travelers and to usealternative places to stay, such as home or condorentals. To earn this sophisticated, active, yet cynicalgroups business, travel marketers must track

travelers as they age over time, create or build upeventsto satisfy their thirst for appointment travel, andrethink their loyalty programs to bond with travelersbeforethey start to think about brand loyalty.


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UNDERSTANDING the Various Booking Optionsfor Travelers


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OPTION 1: The TELEPHONE


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The TELEPHONE

1. Call Hotels Sales orReservations Office Direct


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The TELEPHONE

1. Call Hotels Sales orReservations Office Direct

2. Call Hotels CentralReservations Office


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The TRAVEL AGENT

Representing over 800,000 Travel Agents

50,251

65,750

21,636

50,060

Asia Pacific EMEA

Latin America USA/Canada

Approximately 185,000 Travel AgenciesWorldwide


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FACTS about Travel Agents

Approximately 92 million hotel room nights werebooked by Travel Agencies in 2005.

Brick and Mortar Agencies generated 80.6% of allGDS bookings.

19.4% of all GDS bookings were through GDSpowered Web sites.

The average rate for room nights booked throughTravel Agents was 31.2% higherthan the averagerate for room nights booked via the Internet.

SOURCE: TravelCLICK

eMonitor


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TRAVEL AGENT Hotel Bookings - 2004

Room Nights Pct. Growth Avg. Daily Rate Pct. Growth

Travel AgentComponent

92,172,342 5.7% $132.13 6.6%

Consumer InternetComponent

22,209,367 10.6% $100.73 10.2%

Total GDS & PegasusHotel e-Commerce

114,381,709 7.5% $126.03 6.9%

SOURCE: TravelCLICK

eMonitor


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Market Segment Room Nights Pct. Growth Avg. Daily Rate Pct. Growth

Luxury 2,513,475 15.9% $310.64 7.0%

Upscale 33,577,310 3.4% $154.01 6.4%

Mid-Scale 39,588,218 6.3% $101.15 5.5%

Budget 7,501,869 1.9% $70.78 3.9%

Performance by MARKET SEGMENT

SOURCE: TravelCLICK

eMonitor


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Hotels

RentalCars

Airlines

Cruises

GLOBAL DISTRIBUTION SYSTEMS


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GLOBAL DISTRIBUTION SYSTEMS Galileo

Galileo International was founded in 1993 by 11 majorNorth American and European airlines.

North America, Europe, the Middle East, Africa, and the

Asia/Pacific region.

October of 2001, Cendant Corporation acquired GalileoInternational for approximately $1.8 billion in commonstock and cash.

Serves travel agencies at approximately 45,000 locations.

500 airlines, 227 hotel companies, 33 car rental companiesand 368 tour operators.


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GLOBAL DISTRIBUTION SYSTEMS Sabre

Sabre was founded in the mid 1960s by 4 major NorthAmerican Airlines... most predominantly American Airlines.

Represented in 45 countries, is a leading provider oftechnology for the travel industry.

In July of 1996, Sabre became a separate legal entity ofAMR (parent company of American Airlines).

Sabre connects more than 60,000 travel agency locations

around the world. 400 airlines, 55,000 hotel properties, 52 car rental

companies,9 cruise lines, 33 railroads, and 229 tour operators.


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GLOBAL DISTRIBUTION SYSTEMS WorldSpan

Founded February 7, 1990, Worldspan was originallyowned by affiliates of Delta Air Lines, Inc., NorthwestAirlines, and TWA.

Worldspan has successfully developed the strategies,solutions, and services to ensure the companys long-term

success in the new web-based world of travel distribution.

Datalex is a large partner, thus enhancing its webdirection.

Worldspan currently serves 20,021 travel agencies innearly 90 countries and territories.

Worldspan connects approximately 421 airlines, 210 hotelcompanies, 40 car rental companies, 39 tour and vacationoperators, and 44 special travel service suppliers.


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New GDS provider Luftonav

In March Lufthansa announced that they will join G2switchworks and ITA software as a preferred supplierto provide an alternative access platform to StarAlliance airlines.

These airlines include:

Air Canada, Air New Zealand, ANA, Austrian, bmi, LOT Lufthansa, SAS, Singapore, TAP, Thai, United, US Air,

Varig

Reading through the press announcement in small

print you can see that this is a joint development byNavigant (owns TQ3), Amex and Carlson.

More choice in fact means more global players havinga piece of the action across all their spheres ofcorporate influence


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GDS Travel Agency Installations by REGION

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Asia Pacific EMEA Latin America USA/Canada

Amadeus

Galileo

Sabre

Worldspan


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TRAVEL AGENT Reservations

SWITCH(WizCom orPegasus)

CRSCRS

Travel Agency

Hotels, Resortsand Inns


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WizComInternational

Began in 1987 to provide GDSand reservation services

Subsidiary of Cendant

GDS SWITCH COMPANIES

PURPOSE: To pass the data between the GDSs and the Central Reservation Systems(and Offices) and to reduce the costs of individual connections to each GDS.These switches levy approx. $1 pre transaction.

PegasusSolutions

Founded in 1989 by16 hotelcompanies and offers the

UltraSwitch communication link Originally known as THISCO


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CRSCRS

Travel Agency



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GDS CONNECTIVITY Types

Type B (or teletype) connectionswork via ARInc or SITA datacommunications lines and can becompared to sending a fax -- you

know your message has beenreceived but have to wait for aresponse. Type B connectivityallows for greater speed andconvenience for travel agentsover manual processing. WithType B links, the confirmationnumber is updated in the PNR

and placed in the travel agentsqueue generally within minutes toa few hours after completing thereservation depending on thehotel companys operationalprocedures.

The travel agent has to completethe hotel booking request, endthe transaction and re-display thePNR (pseudo city code) to

determine if the reservation hasbeen confirmed. Type Bcommunication is used as a fall-back procedure for hotelcompanies using Type Aprocessing when a Type A link isdown for maintenance, forexample. On occasion, every

hotel company that uses Type Alinks will revert to Type B. Thisexplains why it is possible toreceive confirmation numbersimmediately during onetransaction while for another atthe same hotel there is anlonger confirmationdelivery time.

Type B Processing Why it matters to a TA


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Type A connections use adedicated telephone line andprovide interactive confirmation

processing. It can be compared totalking to someone on thetelephone -- you send yourmessage and receive a replyalmost immediately withouthaving to end the record.

Type A connectivity works inreal time. It provides animmediate response allowing

travel agents to receive their hotelreservation confirmation numberwithin about 7 seconds.

Advantages of Type AConnectivity:

Confirmation speed about 7seconds or less

Interactive processing and errorresponse

Type A Processing Why it matters to a TA


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Seamless connectivity is anadvanced connection fordisplaying interactive data.Reservation processing is still

Type A, but the messagingstandards are newer and moreefficient. Additionally, interactivemodifications and cancellationsare usually included in this levelof connectivity.

Seamless connectivity allowsmuch of the room description,rate, booking rules andavailability data displayed to a

travel agent through their GDS tobe gathered directly from thehotel companys centralreservation system.

Advantages of seamlessconnectivity:

Viewing information drawndirectly from CRS

Confirmation speed

Real-time information

More information and moreaccurate information

Information is less cryptic

more user friendly language

Seamless Processing Why it matters to a TA


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Also known as NGS, thistechnology enhances and is builtupon classic Seamless

Connectivity to allow seamlessdata to be displayed on the multi-property, hotel list and availabilitydisplays.

Next Generation Seamlessproducts make the shoppingdisplays in GDSs more accurate

with real time seamless data andaids the selection process thusimproving the first step in theshopping/booking process inGDS.

Next GenerationSeamless

Why it matters to a TA

Each GDS has its own name for their NGS Product:Amadeus Dynamic Access

Galileo Inside ShopperSABRE Direct Connect ShopperWorldSpan Integrated Source


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ADVANTAGES of Next Generation SeamlessConnectivity

Real-time information on the first hotel availabilitydisplays

Alleviates misinformation between the multi-hotel

availability displays and single hotel displays Saves time by making appropriate hotel selections

from the multi-hotel availability display

Saves time by manipulating the multi-hotel availability

displays to users specific hotel requests/requirements

RESULTING in an average sales increase of30% versus seamless connected CRS


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CRSCRS

Travel Agency



via Interface, EMail Communication or Fax


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Room Nights % Change ADR % Change

New York 1,309,573 4.1% $231.06 15.8%

Los Angeles 1,070,862 3.2% $139.28 7.4%

San Francisco/Oakland/San Jose 968,082 2.7% $142.61 6.1%

Washington/Baltimore 965,632 3.1% $156.63 9.6%

Chicago 816,259 4.8% $140.92 9.0%

London 783,472 1.4% $227.33 0.0%

Dallas 579,312 8.3% $104.11 4.5%

Atlanta 542,328 2.9% $109.80 6.2%

Boston 499,296 4.8% $156.08 3.2%

Houston 417,368 5.2% $109.42 4.3%

The top 10 worldwide destination markets in room nights for

GDS and Pegasus third-party powered websites, in order, were:

TOP 10 GDS Cities Worldwide

SOURCE: TravelCLICK 3Q2005


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OPTION 2: The INTERNET


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WHY Leisure Travelers Bookat Their Favorite Sites

The ease of shopping online makes it hard for travelcompanies to develop site loyalty just one in threeUS online leisure Bookers have a Web site theyregularly use to buy their leisure travel. Nearly allBookers with a favorite site use it because they have

previously visited it, but the strength of familiarityisnt enough to sustainthe relationship low prices, immediate emailconfirmations, and ease of use also matter. Thesetravelers are valuable, as they spend more and takemore trips than Bookers without favorite sites. To winthem, entice them with both quality and price:Bookers witha favorite site are just as likely to indulge in travel

as pick the lowest price.


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The INTERNET

1. Brand Sites71.4% of InternetBookings


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WHY a Best Available Rate?

Over the past two years, best available rates havebecome part of the travel industry landscape,

primarily among hotels. Do they work? Yes, onceWeb travelers make sure theyre not just marketing

fluff. In fact, more than 2 in 10 US leisure travelers

are fervent Best Rate supporters. Supporters arebrand loyal but ironically prefer to buy from Web

agency sites. Best Available Rate help supplierskeep existing market share and can be used to

steal share from intermediaries. But Web agenciescan also benefit from Best Available Rates bystealing business from other Web agencies ratherthan alienating suppliers.


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The INTERNET

1. Brand Sites (71.4%)

2. Retail Sites12.5% of InternetBookingsalso referred to as

Online Travel Agencies


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The INTERNET


2. Retail Sites (12.5%)

3. Merchant Sites8.6% of Internet Bookings


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SHARE of Channel Bookings

Share ofInternet Bookings

Share ofChannel Bookings

Pct. Change over2003

Merchant Sites 8.6% 100.0% 9.0%

Expedia 3.0% 35.4% 5.0%

Hotels.com 2.6% 30.5% -15.8%

Travelocity 1.7% 19.2% 109.3%

Orbitz 0.8% 9.4% -0.5%

TravelWeb 0.3% 4.0% 24.5%

Lodging.com 0.1% 1.5% n/a

SOURCE: TravelCLICK eTRAK


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The INTERNET


2. Retail Sites (12.5%)

3. Merchant Sites (8.4%)

4. Opaque Sites7.5% of Internet Bookings


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SHARE of Channel Bookings

Share ofInternet Bookings

Share ofChannel Bookings

Pct. Change over2003

Opaque Sites 7.5% 100.0% 16.0%

Priceline 5.8% 77.8% 16.6%

Hotwire 1.7% 22.2% 14.1%



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WHO gets WHAT from WHERE and HOW?

Site Source

Travelocity.com Sabre

Expedia.com WorldSpan/Pegasus/Own Extranet/PMS I-face

Orbitz.com Pegasus

CheapTickets.com Galileo

Hotwire.com Pegasus

PlacesToStay.com WorldRes

Hotels.com Fax/Own Extranet/PMS I-face

Priceline.com Worldspan


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WHO gets WHAT from WHERE and HOW?

Site Middleman Source

Yahoo.com Travelocity Sabre

AOL.com Travelocity Sabre

Earthlink.com Expedia Worldspan/Own Extranet/PMS I-face

MSN.com Expedia Worldspan/Own Extranet/PMS I-face

Lycos.com Orbitz Pegasus

AltaVista.com Orbitz Pegasus

Excite.com Expedia Pegasus

Passkey.com Hotel Direct

GetThere.com Sabre


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CRO Hotel Bookings Pct. Of 2004 Res Pct. Of 2003 Res Pct. Change

Brand Websites 21.9% 18.1% 21.5%

Retail Websites 3.8% 4.3% 11.1%

Merchant Websites 2.6% 2.2% 22.3%

Opaque Websites 2.3% 2.6% 12.3%

TOTAL INTERNET 30.7% 27.1% 13.1%

GDS Travel Agent 35.3% 36.5% 3.3%

TOTAL ELECTRONIC 66.0% 63.6% 3.7%

Voice 34.0% 36.4% 6.5%

TOTAL FOR CROs 100.0% 100.0%


RESERVATION SOURCESforMajor Hotel Brands CROs 2004


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RESERVATION SOURCES for Total HotelBookings

CRO Hotel Bookings Pct. Of CRO Res Pct. Of Total Res

Hotel Website 21.9% 9.1%

Retail Websites 3.8% 1.8%

Merchant Websites 2.6% 1.2%

Opaque Websites 2.3% 1.1%

TOTAL INTERNET 30.7% 13.2%

GDS Travel Agent 35.3% 16.8%

TOTAL ELECTRONIC 66.0% 30.0%

Voice 34.0% 17.5%

TOTAL FOR CROs 100.0% 47.5%

Hotel Direct -- 52.5%

TOTAL HOTEL BOOKINGS -- 100.0%


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Major TRAVEL DISTRIBUTION CompaniesWho owns who??

GDS Leisure Corporate Affiliate

Travel

Agency

Time

Share DSP

Galileo,WizComSwitch

CheapTickets,Lodging.com,

Orbitz

Travelport,Orbitz forBusiness

Lodging.com,Neat Group

ThorConsortium

RCI

WizCom,Trust Intl,ShepherdSystems

SabreTravelocity,

Site59,Travelchannel

TravelocityBusiness,GetThere

TravelocityPartner,

Travelocity,Site59,

Nexion

World ChoiceTravel

None

SynXis,Sabre

DistributionTechnologies

None (1)

Expedia,Hotels.com,

Hotwire,Anyway.com,

TV Travel Shop

ExpediaCorporate,Metropolitan

Travel,Egencia

WWTE,Expedia,

Hotels.com

ClassicCustom

Vacations

IntervalIntl

NewtradeTechnologies

AmadeusOneTravel.com,

Eviaggi.com,Opodo

e-Travel OneTravel.com Vacation.com None None

PegasusSwitch

HotelBook.com,TravelWeb.com

NoneOnline

DistributionDatabase (ODD)

CommissionProcessing

ServicesNone

Utell, Unirez,PegasusSolutions

(1) Primary GDS Partners are WorldSpan and Sabre

SOURCE: PhoCusWright Inc.


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Graphic overview of the EDS

Internet Distribution

Direct ConnectPartners includeAOL, Yahoo,Verizon, Delta,100+ ConventionBureaus, 40+ HotelLodging Assocsand 30 StateTourism Bureaus.

eCommerce

Web Sites Travel PortalsWeb Sites

Hotels, Resorts

and Chains

Associations,

Memberships

and Destinations

Call Center

Inbound Voice

Outbound Voice

Private Label

Full-Time Reservation Outsourcing

Overflow and After-Hours Calls

Travelers Support Desk

Next Generation Seamless GDSConnectivity INCLUDING AutomaticRate, Availability, and HOD Content


Internet Distribution System(IDS) Connectivity INCLUDINGRate, Availability, and Allotment


Hosted Web Siteand Travel Portals INCLUDING

Internet Marketing

Call Center Reservation andSupport Services

Travel Agents

Online Agencies

Others

Brick & MortarAgencies

Integrated SingleDatabase

with Single ImageInventory

ReservationDelivery via

XML Interface,Email or Fax


via core Extranet

ReservationDelivery via Email

or Fax


via core Extranet

electronic distribution overview

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