Distribution Strategies

A study in the US has found that for the first time since 2008, the percentage of agencies reporting increased bookings (34 percent) through their GDS was higher than those seeing a decrease (24 percent), a signal of a sustained economic recovery.

ccording to the American Society of Travel Agents’ (ASTA) 2011 Global Distribution System (GDS) Report, the study, which is designed to assist agencies in evaluating their current GDS contracts and help industry suppliers gain insight into the travel agency distribution channel, also confirms the value of the GDS distribution to the travel agency industry. When renegotiating their contracts, a majority of GDS subscribers (65 percent) say they value their GDS for its ease-of-use and many (50 percent) see no viable alternative.

Among the report’s findings:

·    The agency-GDS relationship is very stable, with 19 years being the average length of time for GDS usage.

·    Seventy-five percent of agencies used a GDS in 2011, compared with 76 percent in 2010.

·    More than 80 percent of agencies pay less than $1,000 annually for their GDS; 46 percent paid no fees at all.

·    Sixty-one percent of agencies plan to renew their current GDS contract when it expires. In 2010, that figure was 63 percent. The majority (40 percent) of agencies report they have a “no-minimum” pricing plan, a figure which has held relatively steady since 2008.

·    The percentage of agencies rating content “very satisfied” drops across all travel categories between 2008 and 2011 down between 10 percent and 34 percent depending on the category.

·    The largest group of agencies (44 percent) describe themselves as “somewhat satisfied” customers.

In September last year, a survey by the Association indicated that its members expect to see a stronger profit in 2011 and 2012--on par with 2008 profit levels. The survey asked travel agency members about their revenue and transaction volume, sales per travel segment, and their expected profits. When asked to compare the first half of 2011 to the same time period in 2010, the majority of ASTA members said their 2011 performance was the same or better for revenue (73 percent), transactions (72 percent) and client lists (75 percent). Approximately a quarter of those surveyed saw a decrease in these areas, a marked improvement from when this question was asked in 2010, when a third of agencies reported a decline, and in 2009, when 80 percent of agencies reported a decrease in performance.