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ASTA: Agents Prefer No-Minimum GDS ContractsMay 23, 2011 By: George Dooley Travel Agent
The movement of agencies away from fixed-rate based contracts to “no-minimum” and productivity-based contracts is continuing, allowing for greater flexibility in how and when agencies use their GDS. This is one key conclusion of ASTA’s newly released and timely 2010 Global Distribution System (GDS) Report. The 56-page report was compiled to assist agencies in evaluating their current GDS contracts and help industry suppliers gain insight into the travel agency distribution channel, ASTA reported.
“As the airlines’ growing desire to more closely control their content has increased, we have seen significant technological advances from the GDSs to provide agencies with greater comparison capabilities and access to even more content,” said Chris Russo, ASTA president and chair. “The travel distribution channels have continued to evolve, and the GDS landscape has become increasingly complex. It’s critical that travel agencies have the type of data this study provides so they are able to properly assess their needs and find the GDS that best meets them,” Russo said.
The study also found that the vast majority of agencies still use a GDS system, namely for its “ease /speed of booking.” The report, ASTA said, is the only one of its kind that specifically examines GDS usage, contracts and distribution trends from the agencies' point of view and takes a close look at the reasons agencies use GDSs.
Among the report's findings:
• GDS users mostly maintain long-term relationships their providers, with the average agency-GDS relationship being 18 years.
• Most agencies contract directly for their GDS.
• Thirty-one percent of agencies saw improvements in number of segments booked.
• Sixty-three percent of agencies receive an incentive or credit.
• Three-year and five-year GDS contracts remain most popular.
• Agencies are most likely to have itinerary invoicing as a product included in their contract.
• The majority of respondents felt that GDS air content and GDS functionality were the most important factors to consider when selecting a GDS.
• Sixty-three percent of agencies plan to renew their current GDS contract when it expires, even though most agencies do not receive incentive for re-signing.
• Dropping ARC accreditation was the most common reason cited among travel agencies that dropped their GDS contracts.
• Corporate agencies more likely to use “productivity pricing” method for monthly GDS pricing.
• Corporate agencies are less likely to be ‘very satisfied” with their GDS provider.
The ASTA Research Family is comprised of a representative sample of ASTA member travel agency owners and managers. The report has a +/- 4.5 percent error rate.
ASTA Premium Members will receive the full report for free and travel agent members will receive a free two-page summary, but can also purchase the entire report for $99. The cost for ASTA member suppliers is $349 and $550 for non-members.
For additional information, please contact [email protected] or visit the research page on www.ASTA.org.