Namely, the business model for TMCs is going to change.Here’s how I see it:
Fifth in a series on Managed Travel 2.0
First, let’s start with the core issue – the booking transaction. It’s the center of the TMC’s universe. They organize and price their business around this function. Everything else is basically an ancillary service. It’s all about the transaction fee.
No surprise that clients view the transaction fee as a bull does a red cape. It’s highly visible, a tempting target, and instinctively from a procurement perspective, it’s something to attack.
I recently claimed in this webinar that the travel industry’s innovative golden years were in the 1990s, and that our industry hasn’t seen much innovation (with a capital I) since.
Why the lack of innovation, you ask? I listed three factors, and am adding a fourth here.
Barrier 1: The legacy “Rows and columns” GDS mentality. The GDSs are arguably the most influential – and constraining – link in the travel value chain. Their products and attitudes about travel technology have driven much, maybe most, of the way suppliers, TMCs and many corporate buyers think about the travel technology landscape, for better or worse. Continue reading →
**Update: The four finalists are noted below in bold purple text.**
The Phocuswright Travel Innovation Summit showcased 34 firms yesterday. Each has an interesting new angle on some aspect of the travel business. For me, the firms in the social scanning and fuzzy shopping categories were the most intriguing. See this post for my take on the implications for travel procurement. Continue reading →
Here are the highlights from my recent presentation at CASMA titled “Future Innovations in Airline Distribution”. The original deck has about 50 slides, but because it was designed for a live 60-minute speech, it’s hard to get the meaning of many of the slides (nearly all pictures) by themselves. So here’s the 3-minute version:
Channels have limits.
Distribution channels are essential to commerce, but they have limits. The Panama Canal has to build wider locks to accommodate the newest and largest cargo ships. This is a metaphor for the GDS distribution channel, as it cannot handle the “wider” content that airlines want to distribute today.