GTMC CEO Paul Wait (pictured) argues that the controversial GDS fee is causing confusing and alienating the market
As anyone who reads Buying Business Travel will know, the GTMC has been quite vocal on the importance of a multi-channel distribution strategy when it comes to hotels, airlines and rail companies.
While we don’t agree with surcharges being placed on GDS bookings, part of the GTMC’s role is to represent the views of the business travel community, and to highlight the benefits of a managed travel programme through a TMC. Our disapproval of GDS fees is simply in defence of the service and sales channel that TMCs offer to airlines, and other travel providers.
Decades of customer research shows that you cannot get all people, or all businesses, to behave in the same way. Therefore you have to be on sale – and easily accessible – in all the places or platforms that your customers are. For many businesses that means online and on the high street. For travel businesses it also means on the GDS, your own online e-commerce platform, and over the telephone.
Any business with a multichannel distribution strategy must be confident that all those channels will pull their weight, and have room to grow.
If we set up GTMC Airlines (™) for example, then basic market research would tell us that business travellers would require more sales support and management than a point-to-point leisure booking.
If it takes more time to sell, then we either need a trained and professional team in-house to specialise in supporting our business travel customers, or we need to outsource this service. TMCs have been the outsourced concierges of airlines (and hotels, train companies etc.) for many years, taking away time and resource to manage bookings, whilst still bringing in very healthy sales figures. And the company itself doesn’t pay for this service, the end customer – or traveller – does.
And now the GDS fee means that travel and accommodation providers are asking for an additional cost to book via a channel that in fact reduces their workload, and keeps their sales ticking in.
This is destroying multichannel distribution. I can’t be the only person who finds it bizarre that businesses that claim to value the business travel sector then charge an additional fee for the preferred booking route of TMCs?
At the GTMC we want a level playing field for all parties. If you want to add a fee – your business, your decision – then apply this fee to all distribution routes.
Being fairer across the channels is not just good for business, it also has clear brand and reputation benefits. By encouraging TMCs to sell on price then any airline, train line or accommodation provider is encouraging sales practises that they have fought years to avoid.
The additional GDS fee means that TMCs are forced to make their clients consider the cost of the air fare, rather than the service value it might offer, therefore eliminating the consumers trust in the brand. Sell on price, and you have nothing to differentiate you other than the cost.
To have a policy that uses price or product to differentiate, alienates the market, creates confusion and mistrust and ultimately acts as a brake to revenue growth. A multi-channel distribution strategy for a provider of transport and accommodation is essential, however so too is parity. Ultimately this allows the customer to choose how they want do business based on a value equation.