TNW pick of the week: Expedia to target SA agents – a new threat to the GDS?

By Dorine Reinstein

EXPEDIA will launch its agent-oriented Travel Agent Affiliate Program (TAAP) in the next nine to 12 months in South Africa, says the online travel agency.

TAAP is already operational in Europe and the US, and has dramatically propelled the online travel agent (OTA) from an agent competitor to a supplier.

Diego Pedrani, director of Expedia Travel Agent Distribution, says agents can easily join TAAP by just making a few clicks, and pay no annual fees. After registering, agents are given an exclusive tracking code that gives them access through a dedicated portal to Expedia’s global inventory, including products from more than 130 000 hotels and 300 airlines. The products and prices on the agent site mirror those shown to consumers. Agents can use the portal, combined with their tracking code, to check the availability of hotel rooms, flights, packages, and destination-based activities; make and confirm reservations for their clients in real time; track their bookings; and accrue commissions.
With no annual fees and higher commissions on hotels, could this new line of agent-oriented OTAs become a serious threat to traditional global distribution systems?
Diego says no. OTAs are not about to take over from the traditional GDS. “Expedia gets its air inventory from the GDS and can’t compete on that line of business.” Bruce Hanna, Travelport’s vice president commercial Southern Africa, confirms that Expedia works with two GDS systems, Worldspan and Pegasus. “From a flight perspective OTAs make use of our airfare and this can be seen with Expedia using our Worldspan GDS platform. We will continue to develop innovative products to assist OTA and value this relationship.”

Garth Wolff, ceo eTravel, says he can’t see the GDSs falling away completely at this stage. But even though agent-oriented OTAs are not a direct threat to the traditional GDSs, the new competition will put more pressure on GDSs to innovate and deliver in order to maintain their relationships. Garth says: “At this stage the GDSs provide us (TMCs) with more than just a product. We have a relationship with both Amadeus and Galileo/Travelport who work with us to ensure that we can provide the best connectivity options available in SA at the moment. Also the GDSs allow us to consolidate the sectors from all our ITCs under one agreement per GDS. We are then able to get the necessary hardware (including the generators) that keeps the eTravel ITC hubs available 24/7/365.

Clearly this equipment costs a fortune so without the commercial arrangements that we have with our GDS partners, we would not be able to fund this and still pay the high levels of commissions that the eTravel ITCs currently enjoy.” He continues by saying only time will tell whether the market will be able to accept new entrants like Expedia.

For more on this story refer to TNW July 13

Other headlines to look out for:

Air Taxi to target untapped market
Yellow Fever - SA errs on the side of caution
Planet Africa Tours takes over AWL Travel SA