Wednesday, 29 July 2009: There has been a bigger drop in negotiated business than in non-negotiated business. The GDSs have been hit by a 20% drop in business. Previously the ratio of negotiated business to non negotiated business was 65% to 35%; now it’s closer to 50% to 50%.
Nevertheless, Paul Southey, Vice President Asia Pacific for TraveCLICK, does not believe this is the end of the line for the GDS. He does question static GDS fees as the cost of revenue has increased and he doesn’t feel that a static fee is justified.
Baby Boomers Pull Back
The baby boomers pulled back their spending in 2009. They are a loyal, higher spending market and frequent travellers. This has hit suppliers and the branded website business harder than anticipated.
OTA’s price-driven tactics
Southey believes that the elimination of booking fees will drive market share, if not revenue. He says that leveraging partnerships to get the best value out of the OTA’s is the best way to benefit from current market conditions as the OTA’s are in an effective position to take share through price and tactics.
Internet is the primary tool for travel research
According to PhocusWright, the biggest influencers of buying decisions are the OTAs at 71%, followed by search at 59% and web at 39%, whereas destination and travel search sites websites had 28% influence each.
OTAs reach almost twice as many consumers than suppliers do online.
The things that are most important to shoppers on the web are the best price/offer (60%) and a good experience on the website (58%). Secondary to that is the travel options (48%).
Consumers are most influenced by positioning, pricing and perception.