Michael Strauss, chief executive officer, PASS Consulting feels one of the biggest challenges in the industry has been direct distribution and airlines going straight to the consumer by emphasisng their own web and corporate booking engines as well as est

Published: 02 Nov 2005

Michael Strauss, chief executive officer, PASS Consulting feels one of the biggest challenges in the industry has been direct distribution and airlines going straight to the consumer by emphasisng their own web and corporate booking engines as well as est

"This is challenging because airlines and distributors concentrate on
the supplier perspective and both travelers and agents have to juggle
many information and inventory sources. We continue to remain
independent and we work with all the GDSs and any other potential
information sources as a content pipeline and aggregator," says Strauss.

"We consistently work with GDSs on how to deal with new challenges in
the market and see the opportunities for everyone to benefit in the
midst of those challenges. One opportunity that we have found in all
this is the chance to provide value added service to offerings and
embracing new channels rather than fighting them," adds Strauss.

Strauss shared his viewpoint on new trends with EyeforTravel.com's
Ritesh Gupta ahead of Travel Distribution Technology 2005 scheduled to
take place in London this month. Excerpts:

In August this year, Farelogix Inc., RADIUS, and PASS Consulting signed
of a Letter of Intent to explore the development and distribution of a
prototype point of sale system that integrates technologies developed by
each party. How do you assess this development from industry
perspective? What kind of progress have you made?

First, the PASS Multi-GDS connectors, the Farelogix platform and the
PASS Virtual Travel Organizer as a graphical user front end is fully
integrated and released. This product includes all the GDSs, web scraped
information, contract management fares and direct connects so it is the
most complete source of information available.

With the RADIUS wheel we prototyped functionality to point of sale, so
that agents will seamlessly be offered competitive flights or hotels for
specific cities or city pairs--an airline or hotel would not want to
lose any customer, even at a lower price. This will only become
effective after the buying decision of the customer for a competitive
product. This product offering is particularly innovative as it is full
service and any agency would be prepared for anything, no matter what
kinds of shifts occur in inventory distribution.

Our plan is to release a commercial perspective of the product in the
4th quarter of 2005 with pilot customers. In 2005, the wheel should
become available to all RADIUS shareholders, including those who will
utilise the VTO outside the consortium.

How do you think PASS Consulting has differentiated its offerings?

We are distinctive because we are coming from a consultancy perspective.
For nearly 25 years we have provided solutions that are based on
reusable components, which can be customized to the needs of our
clients. We started in the travel industry in 1998 by first offering a
product on a licensing base. But we never forgot our roots and
concentrated from the very beginning on customizable workflow solutions
including the right look and feel as well as the enhancements needed to
get the job done. Our ability to remain independent is also highly
valued as we are able to adapt and adjust to any changes in the
marketplace.

How are GDSs evolving and what impact will this have on travel
providers, agencies and the end user? What role should the GDS of the
future adopt?

It all depends on the GDS' decision to fight new entrants or learn how
to work with them. We provide the answers to overcome this obstacle.
Agencies and end users are confused and that is where PASS comes into
play-no matter how this challenge works out, we can easily change to
adapt.

The agencies can see that if there are better deals-and the vendors can
see better ways to distribute-they will find each other. Agencies can
also be more flexible by using the VTO to work more in tune with their
customers. If there is an uncomplicated trip they could charge X and
for a complicated trip with many changes to it they could charge Y. The
agent can easily use the VTO to create fees as appropriate.

The GDS of the future should focus on more complicated bookings because
they are experts in that arena.

What alternative means of distribution pose a real threat to GDSs? Will
direct connectivity, meta-search or switch technology push the GDS out
of the picture?

Alternate distribution sources are not a threat, but GDSs may change
what inventory they carry. The GDS might not be used for simple bookings
but it is still of value and we are focused on taking advantage of any
new opportunities. GDSs also can find new opportunities to use PASS to
get a foothold in agencies that would not be able to otherwise.
Meta-search is only around because pricing is so complex and meta-search
is another player in the supply chain that may face challenges as the
terrain changes.

Hotel GDS distribution has never been regulated. Will hotels now see
costs rise as the GDSs start to charge them for premium display?

If the GDS strategy is to charge for a premium display, then it adds
complexity and some hotels may opt for direct distribution. It depends
if the GDS is able to add value to the transaction.

Where do you foresee the industry headed in next year or so?

The battle will continue between direct distribution and GDSs. There
will be more diversity in distribution. Companies will want to focus on
value added services-door to door, cell phone services, etc. It all
helps to make things simpler and easier for the traveler.

Since the industry has struggled with the challenge of complexity in
pricing, pricing will finally simplify like with Jet Blue and Southwest.
In the long run, simple pricing will be the winner.