Global Distribution Systems Retool for the Next Digital Revolution
Skift Take
The global distribution systems are each pushing forward in their own unique way. By investing like technology companies in flexible distribution and payment technologies, they hope to provide a better value proposition to travel partners that are keen to cut out the middleman. Decades of bad blood between the two, however, still linger over the conversation.
Depending on who you ask, the global distribution systems that power the worldwide travel industry are either outdated dinosaurs or powerful technology companies that will continue to be relevant far into the future.
The reality, though, is that it all depends on where they go from here.
Amadeus, Sabre, and Travelport have each taken different paths in recent years, but one thing is for sure: Each player is iterating to ensure they remain firmly entrenched in the travel marketplace.
Executives from each company separately spoke to Skift Travel Tech Editor Sean O'Neill at the Skift Tech Forum in Santa Clara, California on Tuesday about the future of the sector and the tensions between the global distribution systems and their longtime partners. Here are the most important takeaways from interviews with leaders from each company.
In an always-on, mobile-first world, travel companies need near-instantaneous digital tools to help market and sell their products.
"They're really going after speed; how can I have instant?" said Decius Valmorbida, senior vice president of travel channels for Amadeus. "Why do I have a silo between airlines, rail, and hotel travelers? Personalization is the holy grail because loyalty has become an expensive enterprise. We need to build a system that caters to the needs of the travelers while catering to the needs of the providers."
Amadeus processes 20,000 queries per second, a similar speed to Google. Amadeus is also moving away from the legacy systems that have hamstrung the merchandising efforts of airlines and is transitioning toward more flexible cloud-based systems.
Not everyone is sold on the value of the global distribution systems, though. Independent hotels, for one, are hesitant to pony up the hefty 20 or 30 percent transaction fees. Low-cost carriers have also developed their own commercial strategies to avoid partnering with them so they can own complete control of their merchandising efforts.
"With low-cost airlines, there are elements with technology and distribution strategy," said Valmorbida. "How much do they wan
