IS TRAVEL DISTRIBUTION FINALLY BEING CHALLENGED AND FORCED TO CHANGE?

IS TRAVEL DISTRIBUTION FINALLY BEING CHALLENGED and FORCED TO CHANGE?

And will it return control to suppliers, intermediaries and travel managers? Background The fate of Thomas Cook must force everyone in the industry to rethink and revalue their existing business model. Even with a huge market share and millions of passengers, wrong strategies, slow decision-making and competition bypassing at top-speed, build the coffin for the 178-year-old company. This is also happening in within airlines, hotels and other travel companies. Even darlings like Uber face challenges with labor, losses and legal areas. We all know the success of TUI, Expedia, Booking, Airbnb as well as Metasearch engines like Kayak. Yes, the leisure sector landscape has at least changed over the last decades and we do see clear winners with deep understanding of their market and ability to execute their business plans.Looking at the business travel sector, the picture looks quite different. With the huge decrease in airfares, more options for accommodations than ever and ever increasing in traffic, the role of the travel manager has moved to procurement. Another nail in the coffin is the rigid distribution of services.With the snail-paced NDC entering the airline market 12 years ago, only a few airlines and the Global Distribution Systems (GDS) has invested and launched solutions, and if same pace is applied to all the world`s airlines, we will be well into next century. Many will be happy because changes hurt and yes, the existing structure with Travel Management Companies (TMC) using GDS does work. However, with a cost and many limitations for progress because of ancient technology (basically obsolete). It does work, but real changes and developments have stopped decades ago.The last 3 decades have been buoyant to the airline industry including the business travel sector. The open sky happening did initially have a negative impact but has since been outpaced by a huge and constant growth in air travel. Lower airfares, more competition and globalization have all contributed to this development, and loyalty programs holding on to the traveler on top of the growth.The stone in the shoe was the historic dependence on an infrastructure with Bank Settlement Plan (BSP) and ARK in the US, Clearing Houses and IATA licenses with rules all going back to the birth of the airline industry after WW2.Any other company and industry would long ago have designed, bought or developed their own distribution, especially because most of the airline income is generated in their home-market. The Low-Cost Carriers (LCC) and others have placed hubs around the world to avoid cross border law and rules as well as better logistic, but basically there are 2 business models available:

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