The Triumverate of Travel
As a research exercise for our sales and business development team, I asked the questions:
1. What are the currently available GDS companies?
2. Where did they come from?
3. What websites do they own?
The resulting answers, for many us who are familiar to the travel industry, are not altogether surprising. To a general consumer or to someone who is new to the sector, however, the results of the research are probably quite startling.
Here is what we discovered. There are five GDS companies, they are:
- Worldspan – Formed in 1990 by Delta Airlines, NWA, and TWA. Now owned by Cendant (Travelport).
- Sabre Holdings – Was formed in 1960 and in 2000 was spinoff from American Airlines.
- Amadeus – Formed in 1987 as an alliance of Air France, Lufthansa, Iberia Airlines, and Scandinavian Airlines System. One of the largest GDS companies.
- Galileo – Created by a consortium of European Airlines. Now owned by Cendant (Travelport).
- Appollo – Designed by United Airlines in 1967. Bought by Galileo, now owned by Cendant (Travelport).
So, the result is that There are actually only three companies that control pretty much all the distribution for traditional travel products, these companies are Amadeus, Cendant (Travelport), Sabre Holdings.
Now for the websites. We identified the following websites and then grouped them by the companies that own them.
Cendant
- Orbitz
- Gulliver Travel
- Lodging.com
- Ratestogo.com
- Travelbag
- Hotelclub.com
- Needahotel.com
- Octopustravel.com
- ebookers.com
- Cheaptickets.com
- Budget
- Avis
- Wyndam Hotels
Interactive Corp.
- Expedia.com (and all derivatives)
- City Search
- Evite.com
- Hotwire.com
- Tripadvisor.com
- Hotels.com
- Ian.com
- HSN
- Ticketmaster
Sabre Holdings
- Travelocity.com
- Site59.com
- Lastminute.com
- Worldchoicetravel.com / WCT.com
- Holidayautos.com
- igougo.com
When you look at this list and the list of companies that own the GDSs, you can quickly see that the majority of all travel product purchased by consumers today is controlled by only a few companies. Just how much competitive pricing can consumers expect when they are searching, researching, and comparing prices for products that are all distributed by the same companies. As shocking as this may seem to the average consumer, it is not information that is readily provided to consumers when they purchase online or through a travel agent. Even many travel agents are not aware of the incestuous relationships that exist within the industry.
What does the future hold for Travel 2.0
We have already seen that many airlines and hotels are starting to opt out of GDSs in favour of direct sales to consumers or through travel agents. The savings in commissions to these intermediaries is passed on to the consumer and shared with those who actually sell the products to the consumers, for example travel agents or other travel resellers. As other booking technologies, like Rezgo.com, specifically designed for niche tour operator become more wide spread, then we can expect that the long term impact will force these traditionally monolithic companies to rethink their closed approached to distribution in favour of a more open and transparent method.
Sources:
Stephen – great blog. Couple of updates for you.
Cendant as a company has been split into four groups. The parts that own the online retailers is now called Travelport. Brands are as you say though Lodging.com has been shutdown (redirects to Orbitz) and there a couple of other brands like asia-hotels and Away.com. Avis and Budget are now an independent public company (Avis Budget Group Inc) and Wyndham Worldwide is another separate company.
Interactive has similarly been split. Expedia is now a separate company with Ticketmaster, citysearch, evite (and others including Ask.com) in another vehicle.
Turning to Travelocity, it is worth noting that Site59 is going through a rebrand to Lastminute.com and they own Zuji.com in Asia.
You are absolutely correct that there is a big three globally but should not discount Priceline – often called the almost number four. They lag big three (about a third the turnover of the smallest of the three) but have scale – and are particularly successful in European through their brand Booking.com (incorporating Activehotels).
If you ask me, the future of travel, and in this case Travel 2.0, is basically along the path that Sidestep already started with their application on Facebook. I think that was one of the smartest things they could have done, especially with the huge surge of social networking popularity. Another company called Netvibes is said to be doing something that’s like Tripadvisor meets Sidestep, but it’s still on invite beta so I haven’t been able to fully evaluate it. But I think right now, that’s where the future is headed for travel. I think it’s smart too.