NB: We asked the Tnooz Nodes to reflect on their Predictions 2010 from 12 months ago - do they have Oracle status or did something come along to derail their forecasts.
Also, what were their favourite posts of the year, on Tnooz or elsewhere, by themselves or others.
Timothy O'Neil-Dunne (T2Impact):
Prediction 2010:
Fragmentation and Bilateralism – I believe that these are part of the same trend. We are now so efficient in our businesses that we want to provide more appropriate differentiated products to our best customers.
We are moving from a single holistic multilateral model to multiple bilateral models. This is an umbrella movement of which dealerships and direct connect are one part.
The other is the differentiated content/product that will be provided to the end consumer by suppliers and aggregators alike. 2010 marks the return of true consumer choice. It will not be easy. But I believe the trend is inevitable.
On reflection:
With the Orbitz/AA/Travelport battle, I think the Direct Connect story is a big one that will continue to run. However there is still this assumption that this is just about the cost to the supplier.
But that is just part of the battle. The bigger issues are concerning the control of the customer. This is largely because the airlines have finally found a way to move away from a commoditized product and to differentiate themselves not just by cost.
The airlines cannot possibly give this up this will be mortal combat. Someone will be hurt – it will just be a matter of who. Interestingly there will be fall out across the industry as I believe this is a watershed moment for travel distribution.
An interesting point is the load noises made – and by whom – against the Direct Connect model. The consumer based arguments in my view made against Direct Connect just don’t hold water. If they did they perhaps we would see forced participation by Ryanair in a GDS.
The European regulators have the power to do this and are much hotter in supporting consumer protection – clearly their position is that they don’t feel its necessary. This is a lesson the US needs to take to heart. I also see a fair degree of hypocrisy in some of the arguments being made.
I don’t see anyone complaining about Southwest being in Universal Desktop with limited content for the #1 domestic US airline. Indeed the opposite. In all the posturing, there is an interesting fact being left on the table.
That the consumers have matured. Their ability to search and understand what is there or not has improved both by consumerism and also by the emergence of better consumer facing tools particularly coming from social media.
I don’t think the differentiated content appeared to arrive fast enough in 2010. However the differentiated content has started to emerge. Witness CO’s Farelock product. I believe this is part of the same trend. As AA’s Cory Gartner wrote this week:
"We just want to display the full range of products and services. We want the customer to know what the total cost of the trip is. We want to compete on service, versus price."
In Gartner’s, view at least the traditional homogenized GDSs do not have the ability to differentiate in the same manner as Direct Connect can. And here is where the nomenclature starts to get in the way. Direct Connect – DC – does not mean single unique connect, it does mean that the quality and type of content matters.
As we have seen there are new aggregators emerging who can take advantage of this higher grade content. These aggregators are emerging at multiple different points in the value chain.
Clearly this trend has been noticed by Travelport which now openly advocates multi-tier connections via its Universal Desktop and Associated API. This is where the legacy GDSs are having a hard time, driven by the lack of ubiquity at the traditional host level.
So one can clearly understand the conflict that Travelport et al have in trying to protect their market and still seem to support the consumer choice.
Fortunately, technology doesn’t understand these arcane boundaries and solutions are already available.
The emergence of standards and commonality by the Open Axis Group and OpenTravel Alliance are all part of the same effort - in other words: provide to the end consumer the best possible choice with the totality of product AND to provide better tools for the intermediary to sell the supplier’s product in a manner that is competitive with the Airline.com offerings.
NB: Disclosure - author is also acting CTO for LUTE Technologies, one of the new intermediaries offering access to airline Direct Connect content for online and offline intermediaries.
Favourite articles of 2010: