Blanche DuBois in A Streetcar Named Desire aka The Travel IndustryNewsBy Timothy O'Neil-Dunne | April 28, 2011Share This article was originally published on Can the modern travel industry be compared to a classic 1950s movie starring Marlon Brando?Step forward Henry Harteveldt of Forrester who this week likened the travel industry to the infamous character, Blanche DuBois, from A Streetcar Named Desire.The context? Harteveldt, as principal analyst for travel at the research giant, used a keynote speech at the OpenTravel Alliance annual forum in Las Vegas to dive right into the business relevance of meeting customer needs through standards by focusing on DuBois, a character entirely dependent on the kindness of strangers… or disloyal travelers, as the case may be.In a fact-packed presentation, Harteveldt split his presentation on the evolution of travel distribution into two parts. Using key Forrester data he looked at both the consumer as well as the very business model of travel distribution.Harteveldt reminded the audience that they were servicing "spoiled" consumers who, whether consciously or subconsciously, demand some level of personalization throughout the online shopping process."We are in an era of mass customization", Harteveldt says, imploring travel technologists to ensure systems are flexible enough to respond these customer demands, stating that only those who do will survive.The 60-minute presentation included powerful statistics shedding light on the evolving traits of today’s traveler, which were detailed in-depth by Robert Cole on his blog, RockCheetah, but a few of the key notable stats are included here: 44% of travelers would consider trading up for a better travel product.At least 10% of travelers took an unplanned, unbudgeted trip in 2010.35% of leisure travelers and 50% of business travelers own a touch screen mobile device.Approx 75% penetration of social media use in North America, with global penetration reaching a projected ceiling of approximately 80-85% in coming years.Travel is the largest ecommerce category other than porn.neoFrugal Chic is a growing trend based on savings being a source of traveler pride. So, what do all of these statistics mean to each of the travel technologists in attendance and the communities they serve?Harteveldt focused on high-level guidance such as understand your specific market, maintaining flexibility and implementing the right systems.But he focused more on specific calls-to-action as his session evolved into a discussion of future distribution models and his analysis of the potential future parallels between the traditional retail distribution model and travel.He implored the audience to use their now well mature collaborative efforts as a part of the OpenTravel Community to focus on the end-to-end travel experience versus purely the shopping & booking phase as a standards body might be expected to do.But not being one to shy away from one of the key issues in Travel Distribution – namely the GDS commercial model – Harteveldt set about opining an alternative commercial model for the GDS.He pointed out that the tension in GDS distribution between the suppliers (airlines) and the 3 mega GDS companies was not a recent phenomenon referring back to a report he had authored in 2001.He also reminded the audience that the mis-named "direct connect" and the ancillary services functions were not new at all. Moreover he demonstrated that the once accepted common model for GDSs that was valid in the 1980s (using an image of a very young Duran Duran) was no longer relevant in 2011.Citing a study undertaken in Q1 2011, Harteveldt clearly showed that it wasn’t the channel that was the issue but rather "It’s the GDS business model that travel suppliers find frustrating –not necessarily the channel".Continuing his theme that there was a need for an update to the commercial model and a need to provide more appropriate products and services, he posited that a margin based compensation model for distribution was fairer than the current methods. But he also warned of the potential threats to distribution evolution thus: Nobody works for free – ie those doing the work need to be compensated.Suppliers need the ability to sell their products in the manner they wish, whether via GDSs, other distribution intermediaries, or truly direct to agency/consumer.Search/shop volume and product customization sessions will increase – a topic that weighs heavily on all sections of the travel business as search volumes continue to grow by leaps and bounds.Third-party intermediaries and their customers benefit from existing established distribution mechanisms such as the GDS. As beneficiaries they must be able to bear at least some part of the cost of distribution. Thus Harteveldt clearly came down on the side of a shared distribution compensation model. His suggestion on a new commercial GDS model by margin or wholesale/retail based offered several pointed to several benefits.He made it clear that there was not a technical impediment as it is possible today. One can recall that Worldspan’s model for a user discrete partition, with the user handling the commercials, offered such a model several years ago.In Harteveldt’s view it could solve one of the difficult conundrums facing evolution of the model - that suppliers shift cost burden to third-party intermediaries, without sacrificing control in critical areas like pricing and revenue management.It also encouraged a heterogeneous world where 3rd parties could continue to benefit from the convenience and reliability offered by traditional GDSs – or can mix/match as needed such as utilizing in stand alone or in combined mode industry-standard XML schema, including those being developed by OpenTravel and Open Axis for ancillary products.