The Interactive Travel Services Association commissioned PhoCusWright to produce a paper outlining the "role and influence" of the global distribution systems. You can
get it here. For most industry participants, the paper will contain little new information. It looks more like a primer that GDS companies reportedly
planning to go public can hand out to potential investors and analysts. If I can be permitted to stereotype, the GDS role is as familiar to such folks as is the dark side of the moon (not the album). ITSA executive director Art Sackler declined to answer my question on whether the paper's timing is related to IPOs, but nevertheless, I have to agree with him that such a paper "was long past due." [more]
GDS firms and others making the travel industry work from within--particularly in corporate travel--have long struggled to explain themselves to public investors (see
Solutions, Pegasus and
Inc., TRX).
So this paper, while longer than it needed to be, indeed explains the role and the clout of GDSs and even touches on the challenges of airline merchandizing, direct connections and pay-for-content models. There's no mention, however, of what might be the most controversial element of GDS competition today (see
Davidson, Jim and
Justice, Department of). PhoCusWright acknowledged that the GDS firms reviewed the paper before it was finalized, in November.
Among the findings, PhoCusWright projected the GDSs' share of the U.S. travel market in 2010 would be 36 percent, on par with 2009 and up one point from 2008. In the United States, "GDS air transactions accounted for nearly two two-thirds of all airline passenger revenue in 2008," at the U.S. point of sale, according to the paper.
PhoCusWright aggregated 2008 data from the three major GDS providers to conclude that "GDS companies powered more than $268 billion in worldwide travel revenue in 2008 through 1.1 billion transactions--or more than 2,100 transactions per minute; in the U.S., the GDSs processed 449 million travel transactions in 2008, representing $98.7 billion in total travel sales, or 35 percent of total supplier revenue (gross bookings); GDS bookings represented $81 billion of U.S. airline revenue in 2008, or 64 percent of gross U.S. airline sales; GDS companies power the reservations and technology infrastructure for more than 163,000 travel agency locations and nearly half a million travel agents worldwide; the GDSs provide access to more than 550 airlines, 90,000 hotel properties, 30,000 car rental locations, and hundreds of major tour operators and cruise lines; the three major GDS companies, Amadeus, Sabre, and Travelport, had combined corporate revenue of $9.624 billion in 2008 and employ more than 23,000 people."
Incidentally, PhoCusWright's Doug Quinby said researchers asked each of the GDS firms about
screen bias. According to the report, "none of the GDSs has to date re-instituted screen display bias," at least for air travel, even though technically they could have done so following the deregulation of the U.S. GDS business in 2004.