Open Booking and Travel Management Transaction Fees.

GOODBYE TRANSACTION FEES?

Smaller TMCs have the most to lose from open booking and the vendors that support it. The more an agency depends on booking fees, GDS overrides and similar transaction-related revenue streams, the greater the risk from open booking.

How big is the risk? Bob Joselyn, president and CEO of TAMS, said that some of the industry’s most profitable corporate agencies would find themselves in the red if GDS revenues disappeared.

And disappear is what Joselyn believes will happen to GDS revenues as open booking expands and travelers take control of more travel decisions. As transactions become increasingly automated and traveler-directed, GDSs will have less need to pay incentives to agencies that play a declining role in booking decisions.

Timing depends on airlines
GDSs will almost certainly cut TMC revenues, said Norm Rose, president of Travel Tech Consulting.

But Rose doesn’t expect sudden slashes. How soon and how deeply GDSs cut incentive payments depends largely on how successful airlines are in moving business travelers to direct-booking models.

“The GDSs are very powerful and profitable companies,” Rose said “They are not going to disappear. They are already evolving.”

Amadeus is moving quickly to become more of an IT company and less of a transaction company, he noted. Galileo and Travelport are taking similar steps.

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