Open-Source Travel Retail For Global Distribution Systems
Personalized trip level experiences accessible from any device combining any travel product such as air, car, hotel, cruise, rail, ground transportation, along with things to do, restaurants, golf, tours, conventions, amusements parks, to provide the best experience for your customer.
Travel Retail Distribution Issues, Overall
Current messaging protocols, rooted in standards from the 1960s, are outdated and insufficient for modern needs. The various legacy backends where not designed and architected for how the cloud and microservices work today.
Legacy Messaging Protocols and Complexity
Further, the overall pattern of message interaction was designed for a human agent. Many attempts, with various levels of success, have been made to automate the agent side of the conversation. What remains however is a very chatty exchange pattern. The result was roughly a dozen messages to get one booking, long called the “look to book ratio”. As pricing and product options became more sophisticated, this exploded to hundreds, to thousands, to even tens of thousands of messages for one booking. The booking is the only message where anyone makes revenue. That message imbalance is a major source of cost for distribution of a travel product. Another being the cost of labor to support the complexity of the messages driven by pricing and product options.
Impact on Costs and Labor Shortage
The result is high costs with high skill requirements to get any travel product published and available for sale on travel commerce channels. The labor pool with the needed experience is shrinking. Use of AI can mitigate some of this shortfall but has limits. These issues act as a barrier preventing most travel related products getting to a mass use channel. In the United States, mainstream distribution channels boasted a total operating revenue of $120 billion in 2019. This figure, however, represents only a fraction of the entire travel market, as total U.S. travel revenue reached a staggering $1.1 trillion that year. The significant disparity between these figures highlights a substantial amount of unreachable travel content, underscoring the vast potential revenue left untapped. For the travel products that do get published, there is a lack of distribution options translating into a lack of competition, often resulting in higher distribution costs.
Legacy Technology Constraints
The travel retail market constraints are rooted in legacy technology upon which business processes and revenue models were built. The latter makes it extremely difficult for any one company or industry segment (air, car, hotel,,,) to unilaterally change. Opensource based approaches have had success in such scenarios as they pull together a community which acts together to share costs and risk.
[1] Source: Phocuswright White Paper, Air Sales and the Travel Agency Distribution Channel April 2019
[2] Source: U.S. TRAVEL AND TOURISM OVERVIEW (2019), US Travel Association
GDS Specific Issues
GDS companies have a list of issues costing them time, money, and preventing them from improving customer service.
Technical Stakeholders:
- Siloed legacy systems with proprietary APIs and rigid schemas
- Fare calculations extremely complicated and expensive
- High cost of maintaining connectors to multiple supplier and channel platforms
- NDC use inconsistent across airlines
- Vendor lock-in from proprietary platforms or aggregators
- Long integration timelines and testing overhead
- Difficulty modernizing monolithic systems to cloud-native, event-driven architecture
- Stateful nature of PNRs not conducive to modern architectures like REST
- Scarcity of qualified staff
Commercial Stakeholders:
- Demands by suppliers for differentiation of their offers (price, product, terms) meaning not to dumb down their product to a commodity offer (just a room or seat)
- High content acquisition costs due to fragmented tech landscape
- Fragmentation in air pricing due to inconsistent use of fare publishing constructs designed in the 60s
- Unknown price or fare rules from many suppliers (outside of filed fares)
- Delayed go-to-market for new services, pricing models, or supplier updates
- Limited opportunity to bundle supplier offerings with other travel products
- Major OTAs with multi-GDS or direct connections able to swing traffic away if there is a better deal elsewhere
- Increasingly global OTAs wanting consistent, reliable, global GDS services
- Downward pressure on air booking fees from NDC segments
- Lowering attachment rates (additions to air bookings)
GDS providers have a few services very difficult to reproduce. ATPCO based pricing, airline ticket/EMD issuance, and synchronizing PNRs and related schedule change capabilities. All very tied to 1970s architectural designs. Some use of newer technologies including AI, but the same basic function of 50 years ago. This acts as a barrier to entry for legacy air bookings but not to all other types of bookings that have been moving away from the GDS. This will only accelerate with the use of technologies like LLM to combine trip level offerings outside of the GDS that only supplies the air booking. As attachment rates go down the GDS is less relevant while airline direct connects by channels become more viable.
A means to counter decline is by increasing attachment rates by providing a means to pull together trip level, personalized experiences as a service. Bundling of products into a package offering and dealing with the complexity of payment and revenue flow to supplier participants. LLM driven bundling of travel products for a single payment as a service is not for the faint of heart and why a GDS is in the best position to provide it. What stands in the way of such an approach is the poor quality and cost of the data coming from suppliers via current APIs. This can be addressed but only as a community driven effort as no one can change the flow of data unilaterally.
Open Travel
Foundation Proposal
The Open Travel Alliance is extending its current mission by creating the Open Travel foundation, as part of the Linux Foundation, to deliver a combination of standards and open-source code. The concept is simple. Use the approach defined by the Linux Foundation that has successfully addressed many complex industry issues. Instead of numerous organizations in travel retail funding the efforts needed to modernize, do the noncompetitive parts as a community. This will drastically lower the overall cost to acquire and deliver travel products for all participating. An added benefit will be commoditization of how the organizations in travel retail interoperate to provide a customer trip level bundled solution. That is, distribution costs are going way down while value added services go up. The foundation is about being able to publish rich, rule-based trip level offers to any distribution channel—while maintaining control and cutting distribution costs. This opens access to a broader market and new customers at a fraction of today’s integration cost
Unifying Vision
Together, we’re building an open travel infrastructure where any travel product can be combined with expansive customer experience opportunities in a single offer. Not travel for the sake of travel, but travel as a means to achieve a goal such as attending a business meeting, a cultural experience, or both in the same trip. An open foundation that delivers commodity function at a low cost, reduces risk, and lets everyone scale.
OpenTravel is Advancing to the Next Level
OpenTravel is entering a new phase in response to the growing travel industry issues of API costs and barriers to interoperability.
A transitional board has convened to investigate and enact expansion and funding plans. There are a range of options is under consideration to enhance data consistency and quality across the industry and ready to use REST/JSON open source APIs. These offerings will have significant impacts on lowering API costs and enabling AI/ML exploitation. Combined with an travel industry wide standard for offer/order structure and behaviors, increased opportunity for net new revenue and customer satisfaction. See a more complete description on our reboot page.
About OpenTravel
The OpenTravel Alliance provides a community where companies in the electronic distribution supply chain work together to create an accepted structure for electronic messages, enabling suppliers and distributors to speak the same interoperability language, trading partner to trading partner.
Mission
Enhance the future of travel by helping industry members transition to digital retail, meeting the needs of today’s app-based consumers who demand personalized solutions. We empower members with message standards, reference architectures, and implementations to support modern APIs and cloud-based solutions, enabling digital retail at scale.
Vision
OpenTravel is a cross-industry technology enabler, driving seamless connectivity within the travel community. We create and collaborate on interoperability assets, providing the foundation for modern, efficient, and connected digital experiences that benefit travelers and industry members alike.
Support OpenTravel:
Fuel the Journey
Join OpenTravel Alliance in revolutionizing travel connectivity! We’re making it easier and more affordable for providers to connect with sellers and customers. By standardizing travel offer publishing, we enable automation, reducing API costs and delivering better, more personalized travel experiences. Your donation fuels innovation, shaping a more connected and accessible travel world.
Not a member yet? Join OpenTravel and help drive the future of travel connectivity!
