Inside the GDS Deals: Possible Effects on Agencies

For those who felt GDSs haven't been on the move in the last few years, consider this light speed.

With the announcement that Worldspan is being purchased by Travelport in a $1.4 billion deal, GDS consolidation is brought down to three players. However, with Sabre revealing that it's being purchased by investment firm Silver Lake Partners and Texas Pacific Group for roughly $5 billion, it means all GDSs will now be privately owned, something Forrester travel analyst Henry Harteveldt feels could greatly benefit travel agents.

"When you don't have to worry about pleasing stockholders with quarterly earnings reports, you can focus on product innovation more and Sabre may very well do that," he says. "While Worldspan has been privately owned, it also hasn't gone nearly as far as it could to take advantage of its technology, from the data centers on down, and I believe Travelport will give it the room it needs."

Furthermore, Harteveldt feels Worldspan and Travelport fill in missing links for the other, something he didn't think would have been the case if rumors of a Sabre buyout of Worldspan had ever come to fruition.

"When Cendant bought Galileo five years ago, it was always thought that they should buy Worldspan, because they're complementary systems," he says. Travelport doesn't have multi-host capability and Worldspan does. It also has superior air pricing technology to go along with Travelport's content that can benefit Worldspan subscribers. On the other hand, I don't expect Travelport will be able to keep one hundred percent of the customer base since U.S. regulators may want a certain portion up for bid because of consolidation worries."

Ivan Bekkers, CEO of Atlanta-based Agentware, a travel distribution channel, is also concerned that the consolidation could actually have a negative effect on the quality of GDS products via less competition and believes the airlines are partly to blame for this situation.

"The airlines have committed so much through the GDS, and if you have four players down to three or three down to two, that will create a stronger position for the GDS to dictate terms for the travel agency business," he says. "It's my hope that the airlines will develop alternative ways of getting to the travel market, but their past decisions make me skeptical."

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