In an attempt to make travel accessible and affordable to the consumers, the industry has undergone a massive change. The complex and highly integrated industry has been bitten by the internet bug, which has eventually enhanced the distribution of travel inventory through the electronic medium. Systematic distribution of travel inventory helps improves interoperability as well as the reach of the various players within the industry. The different systems that are affected by the travel inventory management include reservations, loyalty, call center, internet booking engines, CRM systems as well as the underlying systems like analytics, reporting & operations systems.
Challenges in Travel Inventory Management & Distribution
It is not enough to go online; you need to make the offline facilities available online for your customers, to surpass their expectations and improve your user base. Travel inventory management and distribution faces certain key challenges in the online world.
- Travel inventory includes individual inventory available with hotels, tour operators, agents etc. It is difficult to make all the inventory available online
- You need to include local distribution channels and other travel partners to maximize your reach, which remains a constant struggle for travel inventory distribution
- Tapping into private inventory network becomes difficult for most travel businesses, which eventually limits their reach
- Staff productivity & management is a major issue, which leads to attrition and other operational challenges. Training the staff is also another challenge majorly faced within the industry which makes travel inventory management and distribution equally challenging
Web Services & Travel Inventory Distribution
These travel distribution issues such as interoperability are resolved with web services, which offer standardized communication between the different applications. This basically streamlines the electronic distribution of travel inventory, thus making it accessible across the various markets.
Before web services took over, travel inventory distribution using electronic medium worked slightly different. The distribution channel involved six players- service providers, switch companies, label provider, GDS, Travel Agent, and the customer. GDS is core to travel inventory distribution. It is the GDS that stores the static information, and makes available the inventory and its rate for the various service providers. With GDS, you can make inventory, and the ability to buy/sell it available globally. Connecting to GDS using the disparate individual technologies posed a challenge to the various players in the travel industry.
The small hotels and car rental companies were unable to integrate with the GDS, which is the sole reason why label companies existed. They hosted these small players, and offered their interface on the GDS, thus making them available globally.
Using Switch, the individual CRS (central reservation systems) can communicate with the GDS, thus allowing the inventory distribution and selling real-time.
Travel agents can conduct booking real-time online using the data available from GDS, and thus help customers in their bookings. From air travel to hotels, GDS has helped travel agents and operators conduct bookings online.
GDS and this distribution channel has made travel accessible, and bookings convenient to the customers.
Need for Web Services
The current electronic distribution posed certain issues to the various players within the travel industry.
This is a major challenge in travel inventory distribution, which was not completely resolved with the traditional approach. The traditional approach to distribution relies majorly on GDS to access information related to rates and availability. The cumbersome and inflexible GDS makes interfacing with external systems difficult, and requires trained agents for the same.
Integrating Multiple Service Providers
The main purpose behind creating a GDS was to book airline inventory online, and they general create PNR for bookings from individual service providers. The limitation within the GDS does not allow it to consider one travel itinerary as a single travel reservation. It creates separate PNR for car rental, airline and hotel bookings, and thus requires manual intervention to facilitate the bookings
Travel Agency Cost
Though GDS has simplified the whole booking task, it requires the intervention of a travel agent in order to complete the booking. The travel agent charge is also applicable on every booking made through them, which adds to your travel cost. Again, the commission may differ with the booking type.
These are just a few challenges. Yield management was another challenge, which forced the service providers to sell their inventory on disparate or disconnected channels, as the existing system does not have a seamless connectivity across the various channels. These major challenges led to the need for web services for travel inventory distribution.
Redefining Distribution with Web Services
Web services is basically a self contained business application that has been developed using XML markup language for data representation, SOAP (Simple Object Access Protocol) for messaging, WSDL for service description and UDDI for service discovery, operates over the internet. There are three main roles defined within web services, which is an implementation of the Services Oriented Architecture (SOA): service provider, service requestor, and service registry. With web services, you get the framework using which you can implement the SOA defined here. This is still in its nascent stage, which is why the standards are continually evolving to meet the various defined needs.
Using the web services, the interaction between the service providers and service consumers is streamlined. This helps ease the distribution of travel inventory to the potential customers. Web services has led to reduction in the use of intermediaries for travel inventory distribution, and has established a more direct connect between the buyers and sellers. A strong communication that has been enabled by web services helps access information in real-time, thus making travel inventory distribution easy and reliable.
Web services offers a standardized service publishing, interface and messaging tools which will help create uniform infrastructure for communication between the service providers and consumers, thus reducing overall cost.
Combining the web services trend, with the standardization of XML by travel industry bodies like OTA and HEDNA will build a strong communication foundation, thus strengthening the automated distribution of travel inventory.