Which GDS for the future?

With commission rates dwindling and the popularity of the internet growing, agents face pressure to up their game. ATN finds out how the leading GDS providers can help the travel trade tackle these challenges.

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By  Administrator Published  March 22, 2008

With commission rates dwindling and the popularity of the internet growing, agents face pressure to up their game. ATN finds out how the leading GDS providers can help the travel trade tackle these challenges.

Until recently, Travelport GDS - comprising the Galileo and Worldspan software platforms - and Amadeus have been the main competitors in what has become a battle to win the support of the region's travel trade for their global distribution systems (GDS).

But fellow GDS provider Sabre Travel Network Middle East (STNME) has slowly been building up its products and has also become a serious contender in the market.

The difficulty for travel agents is to decide which GDS to sign up with, as each player offers a suite of products and each claims to produce solutions for the key problems facing agents -namely commission cuts, the internet and the need to improve efficiency and harness technology.

"This industry becomes more competitive on a daily basis and we offer players in the region's travel industry the means to make their businesses more profitable, to reduce their costs and maximise their sales," claims STNME's CEO Daniel Naoumovitch.

"We do this through [providing] the best technology, innovative services, travel products that are bookable and distribution services."

In order to compete with the market leaders, STNME has been forced to focus on offering a unique service focused on the needs of the region's travel professionals, by providing a local service and extensive training for agency staff.

"We believe we have some of the most comprehensive training in the GDS business - it is one of the biggest feathers in our cap," says Naoumovitch.

"One of the major advantages that Sabre has is that it is the only GDS that has its headquarters in the region itself, which can be said of none of our competitors."

This enables the company to respond quickly to the needs of local agents, avoiding time delays and handing responsibility to regional managers with local market knowledge based in the actual GCC locations.

"We've also expanded our training team, so we now have 15 trainers across 11 countries with a minimum of one trainer per country, as well as support given from the head office in Bahrain. We also provide training through visitations to individual offices, training within our own offices - both locally and at out head office - and through the computer system with e-services."

If a travel agent requests training, then STNME sends in a trainer to asses what is needed by the agency and ensures that it is provided.

In addition, regular training courses are scheduled and quick reference guides provided in both English and Arabic, again providing for local agents.

"Each market is completely different, and we provide continued support to the travel agent through the best and the largest help desk facility. Our client service is second to none in the region," says Naoumovitch.

"We also have the latest technology and we support the travel agent with it. This means, for example, that a travel agency in Saudi Arabia can reach our office in Bahrain quickly through VOIP technology and their needs can be met more efficiently."

Of course, the travel trade is being threatened by the very technology that is also helping agents improve efficiency, but Naoumovitch plays down the threat of the internet, claiming that it is still less effort for travellers to utilise the services of an agent with access to a GDS. than to book their holidays online.

"We all have the ability to go onto the internet and see what the cheapest deal is, but not all of us have the experience and the range of products offered by the GDS. The beauty is that travel agents using a GDS - although the internet is coming on leaps and bounds - can, with one click, provide information that would require numerous internet searches," he argues.

Sabre is actually using the internet to provide agents with useful tools, such as MySabre, a web-based booking corner enabling travel professionals to launch Sabre through their home PC or laptop.

Sabre Travel Network Middle East concedes that it still commands a relatively small share of the GDS market in the GCC, but it is already ladies-only training department amongst the leading GDS providers and is looking to expand into Saudi Arabia over the next month.

"We are opening three new offices in Saudi Arabia, one of our main markets in the region, focusing specifically on the Eastern Province, and we are ideally aiming to have those open by the completion of the first quarter," explains Naoumovitch.

Market leaders

Amadeus has also taken an interest in Saudi Arabia, commissioning a study by Hermes Management Consulting in November 2007 to assess the future needs of the country's travel trade. The survey highlighted the fact that commission payments still comprise 74.6% of the gross margin across the country's travel agencies, despite an expected drop in the current 7% commission awarded by airlines in Saudi Arabia.

Amadeus suggests that one way agents can prepare for inevitable commission cuts is to implement service fee management systems, such as its Service Fee Manager, which enables the agent to charge the consumer a service fee for products supplied.

"Instead of losing income due to low or zero commission, agents can increase the financial benefits through this technology," explains Fernando Cuesta, senior regional manager, Middle East and Africa, who manages Amadeus' operations in the Middle East through a number of local companies.

Cuesta claims that Amadeus always focuses on the long-term needs of the travel agent, ensuring that by investing in research and development of new technologies and solutions, it can provide the best products.

"We have the full trust of the travel agent community because we have been the top investor [in technology] in the last five years and this shows not only our commitment, but that we're here to help our customers prepare for the future," he says.

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