It's been a long time that we haven't had any disruptors in the B2B travel sector.
For too long, the travel technology industry has been driven by mainly 4 actors (used to be 5 with Worldspan): Amadeus (Disclaimer: my former employer), Sabre, TravelPort and ITA Software (recently acquired by Google but yet to be completed because of this).
So when I heard that the rock and roll style entrepreneur Morten Lund decided to disrupt the industry and launch Everbread with a suite of solutions, i couldn't resist to have a positive smile on my face and welcome such a brave move.
First of all, the main 3 Global Distribution Systems (GDS) have been around for a while. They were all at some point in their life owned by airlines. They are all now owned by private equity funds (Blackstone for TravelPort, Cinven & BC Partners for Amadeus, TPG & Silver Lake Partners for Sabre).
They are all battling hard to gain market share in all over the world. Some do better than others in certain markets due to a/ their country of origin b/ their level of customer support c/ their loyal customer base
But they are all continuing selling their solutions with the dangerous game of incentives handed out to travel agents.
What does this mean for non GDS agnostics?
Basically if you are a travel agent and you are looking to offer Flights, Hotels, Car, there is a good chance you need to access inventory via the GDS and use their booking platform to make reservations for your customers. All GDS have proprietary front office systems that sit on your computers. Some agents use the graphical interface and others (majority of them) use what we call the "Black Screen" with codes that you learn over a a long intense week of training.
Some agents might decide to swith from one GDS to another besause of different reasons. And when comes the negotation to buy into a new GDS parntnership, the incentive comes largely into play in the decision making factor. It would mean that the GDS will pay the agent an incentive per booking. I know this can sounds weird in the technology sector, but yes GDS pay their customers to use their system. So you might ask how do the GDS make money? From suppliers like Airlines, Hotels, Car rental companies who pay a booking fee and more to be on the GDS. Also let's not forget that all GDS have expended their expertise to provide technology to suppliers as well (another good source of revenue for them).
This battle of who is getting which travel agent / travel management company / tour operator is totally flawed with this incentive model. In the economy crisis we lived not so long ago, some agents weren't interested to invest long term but more how I can make more money with GDS incentives. Such a short strategy in my eyes but hey I am not a travel agent.
Back to Everbread.
As Morten mentions in his video interview with Kevin May from Tnooz during Webintravel in Singapore last week, he thought to join the travel industry because it is the biggest industry in the world and there is a lot of money to make even though it is very competitive. Funny enough we don't know much about their product Haystack yet. No demo has been published online but I am dying to get a demo with their team at some point. Ultimately, Everbread aims to do a better job in travel search. Watch this space. Check out his first appearance at a travel trade industry event last week.
To be continued...
(Filip, I didn't forget your offer ;-)
Coffee with Morten Lund, 'Archangel' investor & CEO, Everbread from WebInTravel on Vimeo.
Mike Lanigan from Alberghi Marketing says
Too many small independent luxury hotels rely on well-known-brand portal websites to generate business but it's often perceived business. Using Google analytics, they can track how much traffic is being generated by these sites (referrals) and, alarmingly, it's often somewhere between low and zero per month. It's also virtually impossible to measure how many bookings are generated via these sites unless customers book via the portal booking engine and these can be very few. Given that the cost can be as much as £2000pa, is it worth it, when their own websites can be working so much better for them?
A hotel's website provides a good testbed for all sorts of intiatives and Google analytics enables them to get some idea how popular these initiatives are. They can see which are the most popular pages of their site.
I can say one thing categorically; those hotel sites that have a Late Availability page that they manage themselves on a daily/weekly basis will find that it's one of the top three most popular pages, especially as more people are booking last minute these days.
In fact, if a hotel is managing its site properly, it can't do without analytics. This, of course, assumes that the site's Google profile is generating loads of traffic!
Of course, a small luxury hotel can have the slickest website in the world and spend an inordinate amount of money on marketing but if the reception team are incapable of converting the enquiries, it can be to the benefit of competitor hotels. But that's another issue!