Types of GDS available for Travel and Tourism industry
The global distribution system is defined as the network that is operated by a company in order to reduce the manual work of the company, and restore to automation. The automated transactions mainly include transactions among the hotels, airlines as well as car rental companies.
The given case study highlights a travel and tourism company named Tiger Travel Ltd., which is looking forward to modernization of their way of working. This report highlights the various types of global distribution systems that are essential for travel and Tourism Company. Moreover, the available methods for connecting to GDS have also been mentioned. The IS system is evaluated and recommendation for the web presence has been discussed. The importance of each of the GDS such as Amadeus, Worldspan, Sabre and Galileo has been discussed in details. The revised role of the manager after the installation of the GDS has also been highlighted.
Types of GDS available for Travel and Tourism industry
The global distribution system is defined as a computerized web service that is used to provide real time centralized data for the ease of access of the travel company as well as for the customers. GDS is an important system for the modernization of the travel and tourism industry. In case of the Tiger Travel Ltd, the various GDS systems that could be used are as follows:
- Amadeus: This is one of the most widely used GDS systems used by travel and tourism companies and hotels. Use of this GDS brings a world wide exposure to the travel and tourism company. Moreover, this GDS assists in B2B as well as B2C distribution (Gholami et al. 2017). This GDS acts as a platform for automation as well as global presence of the company. Tiger Travel Ltd, receives an entry to the corporate brokers using the Amadeus GDS (Madalozzo and Fernandes 2016). Use of this GDS assists the company to have a 24/7 global presence, and the customers can book their travel packages at any time according to their convenience (Fiig et al. 2015).
- Galileo: This is one of the most widely used computer reservation systems (CRS), which assists the travel and tourism industry with online reservation system. This GDS system adds value to the Tiger Travel Ltd, such that it could use online reservation to attract more customers. The competitive strengths of using Galileo include increase in the market share, global presence of the company (Iyer et al. 2015). Moreover, technological advancements are also advantages of using the GDS Galileo. This GDS acts as a cautious follower for successful advancements in the technology (Suau-Sanchez et al. 2016). The GDS network assists the travel companies, the customers as well as the travel agents to access the data related to the booking and travel details with ease. This GDS also provides easy interface for the customers for online booking of the tour package of their choice (Naqvi and Jia 2014). However, Galileo pursues a strategy of expanding the global distribution process, along with strengthening the customer loyalty and customer retention. Leveraging of technologies along with capitalization of opportunities is achieved using Galileo.
- Sabre: Sabre GDS is one of the most widely used systems by most of the travel agencies around the world. The travel agents connected with Saber use the Saber web based portal and the technologies in order to incorporate automation and modernization of the processes (Banoobhai and Keating 2016). Tiger Travel Ltd, might use this GDS to incorporate technical advancement and achieve competitive edge among the other contemporary travel agents (Belobaba et al.2015). This is one of the most widely used GDS and it guarantees to provide the best support solution for the travel agencies. The features of Sabre include the low fare search technology, along with comprehensive travel content. Moreover, it might result in establishing the travel agency as the leader of the industry, and provide a competitive advantage (Madalozzo and Fernandes 2016).
- Worldspan: This is a global distribution system that provides a travel technology and assists the travel agencies to make a global presence. This GDS offers a worldwide computerised distribution of the travel packages offered by the travel agent. Moreover, booking of the packages could also be made by using Worldspan. Tiger Travel Ltd, might use this GDS in order to give their company a global exposure, and enhance their business.
Critical analysis of the available methods to connect to GDS
A travel and tourism company might work with GDS in three ways. These are the retail model, the merchant model and the opaque model. By using the retail model, a travel and tourism company can successfully use all the channels through which it could use the technological advancements (Madalozzo and Fernandes 2016). Moreover, a standard commission could be earned using this model. In this model, the agent is paid after the customer makes the payment. The merchant model applies to the third party service providers that are connected to the retail travel agent.
This model is a costly one and online commission is obtained using this model. Another method of using GDS is by using the opaque model. In this model, the guests of the travel and tourism are unaware of their stay at a particular hotel, until the booking has been made confirmed. Once the bookings are made confirmed, the guests are aware of the hotel in which they would stay. Thus, the GDS is flexible enough to use various models and allow the customers to choose the way of booking that is, most convenient to them (Madalozzo and Fernandes 2016).
Small travel agencies might benefit a lot by using the GDS. The omission given to the brokers are much reduced with the implementation of the GDS systems. The GDS offers a very competitive price. The one time set-up cost for most of the above mentioned GDS is $500. However a monthly cost of minimum $75 is charged. Cost per reservation is also applicable in case of the GDS. Though the initial charges might be more, yet in the long run it is useful for the travel agency and would enhance the business of tiger Travel Ltd. Moreover, the GDS systems are easy to maintain, hence the maintenance cost is also low.
Critical analysis of the available methods to connect to GDS
Evaluation of the IS systems to improve efficiency and profitability
The implementation of the GDS by the Tiger travel limited would enhance the business of the company, along with providing the following advantages:
- Package:The use of GDS by the travel agents would offer a complete package to the travellers. The potential travellers are able to book travel packages that include air fare, hotel bookings, as well as local tours (Madalozzo and Fernandes 2016). The price offered using the GDS is also attractive to the travellers. The customers would get a complete solution to their travel related issues and queries.
- Marketing:A better marketing strategy and exposure to the global marketing is presented by the use of GDS. Thus, investing in GDS by the Tiger Travel Ltd, is beneficial for the company, as well as would attract more travellers to book their package of choice (Berne et al.2015).
- Reduction manpower:The GDS acts as a trustworthy middleman for the transfer of information from the travel agent to the customers. Thus, the installation of the GDS would reduce man power and a complete automated system is presented as a substitute of the manual labour (Norrid 2016).
- Global presence:One of the most essential benefits presented by the installation of GDS by the Tiger Travel Ltd, is the global exposure. The increase in the popularity of the travel agent is an immediate effect of the use of the GDS (Oriade and Cameron 2016).
- Enhancement of efficiency:Since manual labour is decreased, manual errors are also reduced. Hence the enhancement of efficiency is experienced by the travellers and customers (Naqvi and Jia 2014).
- Increase in profitability:With a complete package being offered to the customers and global exposure, the customer satisfaction increases along with customer retention. Thus, the profitability of the travel agent also increases. Thus, a clear increase in the profitability of the company is witnessed (Madalozzo and Fernandes 2016).
- Time saving:Since the GDS is an online system, hence, it is time saving. Moreover, the customers are able to browse through the various tour packages at any time, as per their convenience (Madalozzo and Fernandes 2016). The ease of use among the customers makes the travel agent a popular one, thus increasing the popularity as well as the productivity.
- Achieving competitive edge:Installation of GDS enhances the productivity of the travel agents along with achievement of the competitive advantage over the contemporary travel agencies (Madalozzo and Fernandes 2016). This competitive advantage results in gaining priority among the various travel agents.
Recommendation for web presence and the cost it will incur
The Tiger Travel Ltd could use any one of the GDS among Galileo, Worldspan, Sabre and Amadeus in order to enhance the profitability of the company along with presenting a platform of world wide exposure (Cheng and Lok 2015). Use of any one of these could be recommended for the travel agency Tiger Travel Ltd. Installation of GDS would enhance the business along with increasing the profitability.
The initial installation cost could range from $500 to $800 (Thakran and Verma 2013). However, this is an onetime cost, and is not an overhead for the company, compared to the benefits offered by the installation of GDS. Along with this cost, a per reservation cost of approximately $15 is incurred by the GDS (Madalozzo and Fernandes 2016). However, the cost of middle men and brokers are absolutely mitigated. Thus, it is recommended that the IS systems are installed by the Tiger Travel Ltd.
The initial onetime cost might appear to be an overhead for the company, yet the benefits that are achieved from the use of the GDS, reduces the overhead and boosts the productivity and enhances the business of the Tiger Travel Ltd (Madalozzo and Fernandes 2016). Thus, it is highly recommended that the Tiger Travel Ltd install and uses various GDS systems such that the business receives a boost. Moreover, the cost per reservation is nominal, and less that the cost of the brokers and middlemen. Thus, in the long term, the company would be benefitted.
Discussion pertaining to the change in role of the IS manager
The role of the manager in the Tiger Travel Ltd is likely to change as the company grows. This is because, the previous scenario of the company has change a lot with the introduction of the GDS (Szopinski and Staniewski 2016). The company would experience a growth and enhancement of the business with the successful introduction and installation of the GDS. The manager previously was responsible for manual booking of the tour packages, as people would come in person to book their packages of choice (Díaz et al. 2015). Moreover, since the company did not have GDS, hence was locally prominent only, without global presence. After the introduction of GDS, the manager needs to undergo training in order to cope up with the changes. The change in the role of the IS manager is as follows:
- Training of the installed GDS: The manager of the Tiger Travel Ltd, needs to be trained such that he is able to use the GDS successfully. Since the Tiger Travel Ltd, had been using the manual system hence, the knowledge if the IS system needs to be imparting (Loureiro 2016). Moreover, the use of GDS might reduce the number of the managers, thus increasing the responsibility of one manager (Madalozzo and Fernandes 2016).
- Communicate with global customers: Without the use of GDS, the travel agency was a local company, and the manager head to communicate with the local customers only. However, with the use of GDS, the manager needs to communicate with the global customers (Madalozzo and Fernandes 2016). Thus, the manager has to ensure effective communication such that he might be able to communicate successfully with the global clients (Nyblom 2014). Moreover, most of the clients and customers needs to be handled online, hence a sound technical knowledge is also desirable.
- Solve online transaction issues: With the use of GDS, most of the transactions of the Tiger Travel Ltd, are made online from travellers all over the world. However, the transactions might face issues and might not be completed, or might be aborted mid way (Benckendorff et al. 2014). In such cases, the manager needs to be capable enough to solve the issues made in online transaction (Madalozzo and Fernandes 2016). In case of abortion of a transaction, the money needs to be rolled back to the sender’s account and manual adjustments have to be made, with the payment being received via an alternative mode.
- Update the system regularly: The manager, along with the responsibilities, needs to update the system regularly, such that the information of the latest packages and tours could be updated, and the customers might be able to avail the packages (Gretzel et al. 2015). Moreover the revised prices of the packages need to be updated as the prices increases. Thus, the regular update of the system is essential (Madalozzo and Fernandes 2016).
- Fix GDS issues: The GDS issues have to be fix using expertise skills. GDS issues such as unable to connect to the server needs to be fixed by the manger (Law et al. 2015). Since GDS is an online system, hence issues such as heavy traffic, server issues, system being hacked could occur. The manager needs to be efficient enough to identify the issues and report them to the technical team, specialized in software and hardware (Madalozzo and Fernandes 2016).
- Shift from the manual to automated system: The manger needs to shift from the kind of work that he had been doing. The manager earlier would be engaged in manual work, with manual maintenance of the travel system. However, with the installation of the GDS, the manual effort has been transferred into automated one.
Conclusion
The global distribution system is an important system that is could be used for the Tiger Travel Ltd, in order to enhance their business. The recommended GDS that could be suggested for the Tiger Travel Ltd, includes the Amadeus, Sabre, Galileo and Worldspan. The travel agency might use any one of these in order to make a global presence. The advantage of using GDS includes a complete package being offered, enhancement of marketing approaches, reduction in manpower.
Evaluation of the IS systems to improve efficiency and profitability
These improvements and enhancements in the business require the manager to be expertise in the knowledge of the GDS. The required training needs to be given to the manager such that he might be able to cope up with the changes. Thus, the business of the Tiger Travel Ltd world receives a remarkable boost with the installation of the GDS, and a competitive edge is achieved by the Tiger Travel Ltd, among the contemporary travel agencies.
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