The Beat Letters: O'Neil-Dunne On 'Control Freaks' And Pegasus

Consultant Timothy O'Neil-Dunne wrote two letters in response to recent coverage. [more] Regarding "Converging Technology Confronts Control Freaks," published Oct. 7:

I find it very interesting that the focus of travel world remains on the sexier front ends. Having been around the travel distribution world for more than 30 years, I can easily see that the one-size-fits-everything is no longer the order of the day, and definitely cannot support the next generation of services. While Gregg [Brockway of TripIt] was discussing the the "traveler-centric future," nowhere in the article did anyone talk about the underlying issues of how the infrastructure of travel can meet the needs of this user-centric world. And here lies the fundamental flaw--the current technology base cannot support this type of world. For a long time the travel distribution and service world has run on a number of assumptions. Among them was that the intermediary was a neutral force (for good) and that the value chain was hierarchical. Both these assumptions have been shown to be no longer true. The intermediary has not been neutral for a long time. The distribution chain is now a free for all--open to almost anyone. One can clearly see that fragmented content and services tuned to the individual needs moves away from both those basic premises. My reality is very different to your reality!

So before we get to the Web 3.0 world that I, for one, think is coming, we need to do something about that supply chain technology.

The converging (user facing) technology is working in favor of control freaks but the technology base (of the supply chain) is flawed and broken, and won't support these enhanced functionalities. The commercial model also needs to be realigned with this new value proposition. You cant have it both ways.

Before we can get to the next level, we need to have better tools and solutions. We also need a better technology model. We also need a fairer and more honest (and transparent) commercial model of compensation.

How to do that? Ah that’s a very good question. I will give you one hint though: Travel isn’t that special.

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Regarding "Escalating Look-To-Book Ratio Prompts Pegasus To Change Model," published Oct. 1.

The decision to mimic the GDS charging model by Pegasus in the L2B revisions to the contract is probably a damning indictment on both the model and the failure of Pegasus to address the issues of a suitable solution.

On the model failure, I believe everyone here has some blame to share. The GDSs have failed to develop suitable databases for searching at an equitable price, and clearly this includes Pegasus. The local point-of-sale technologies both on- and offline have failed to make smart searches possible. The suppliers have not done anything to force discipline in their inventory distribution that would enable spider-based searches.

So can we do anything to fix this?

I believe that we can and should. I believe we can look to other industries, such as financial markets, for managed "state"-based products. This would require a fairly significant and radical rethink of how product inventory is managed, displayed and distributed.

As Pegasus was rolling out its new technology, surely it could have foreseen this issue emerging. Surely it should have considered building into the technology platform a suitable "search-friendly" structure of how the data is displayed on the Web. Frankly the market may not be kind to Pegasus for this failure to develop the suitable capability. With leakage of booking away from the formerly dominant player to others such as SynXis and away from the GDS model altogether, this action may be counterproductive to Pegasus' efforts to restore its market position.

Of course, only time will tell if this was a smart move. I believe it not to be.

~ Timothy O'Neil-Dunne is managing partner at T2 Impact.