Open letter to the management of the leading GDSs: Galileo, Sabre, Worldspan, and Amadeus

Open letter to the management of the leading GDSs, Galileo, Sabre, Worldspan, and Amadeus.

December 4^th, 2004

Dear Sir,

Heads up. You need to innovate or perish.

You are expensive to suppliers and inflexible and unresponsive to distributors (at least to my firm). You're trying to bolt cutting-edge technology, like web services, onto decades old computer systems. It will not work. An upstart GDS firm will take over your business within five years if fundamental changes aren’t made.

This letter is written in the spirit of constructive encouragement. I want to work with you. I want you to change and to innovate. I want to partner with an established GDS, that has a big network, and innovative offerings.

GDS’s Innovator’s Dilemma

The GDS industry is facing a classic example of Prof. Clayton Christianson's "Innovator's Dilemma." You currently serve a huge market with good profits and little competition. You have brilliant employees, you listen to customers, and you bang out sustaining innovations year after year. Why should you change?

Despite this you’re about to get blindsided and clobbered. I don't know by whom. I can tell you it will be a small niche player who will eat away at one of your small or lower profit business lines. You won't care much at first. But, in a few years, they will surpass you as the dominant player in the GDS market.

It might be Genesis, focusing on the Canadian market (Canada, eh?). Or maybe G2Switchworks, focusing on lowering suppliers costs. Or possibly even a firm like Viator, who now distributes events and activities – not a GDS… yet.

Lets consider Viator. They offer a wide range of compelling products, very sticky content, clean and stable XML data, a killer sales/support team, and well supported OTA-compliant web services. They don't have a legacy system in their building. They currently offer their product over your networks.

What if they were to partner with G2Switchworks and leverage their collective technologies? Imagine that they begin offering flights from the low cost carriers, charging them $3 per booking? You say, “no big deal. The low cost guys don't work with us anyways, and hell, we charge $13 - we're not going to virtually eliminate our margins.  Besides, they’re distribution network is tiny if they don’t have us.”

The following year, AA, Delta, Continental are signed up with them at $3/booking. Two online travel startup’s sign with them.  You say, "Screw it, their market share is still tiny. We'll improve our offerings in hotels and dynamic packaging deals to stay ahead.”

A year later, they attack the hotel and dynamic packaging market. They offer the same great web services and content for air, hotel, packages, as they do for activities. They make it simple and free to distribute their products.

Expedia and Cheaptickets start to distribute them. Every single startup in the travel space will sign with them. Game over.

You lose.

My experience

I run an online travel startup called TripInvite.com, set to launch before the end of the year.  We have a fantastic idea and new patent-pending technology. We'll be a major player in the group leisure travel industry a year from now.

I tried for three months to get a GDS to work with us. No takers. Bounced back and forth from sales person to sales person. You wanted thousands of dollars for me to sign up and “integrate”. You wanted me to pay tens of thousands of dollars for your APIs.

Are you kidding me?

We finally were able to setup with Galileo because we partnered with Elleipsis who connects us to Galileo through web services. Saving us from paying integration and API fees.

We don’t like the service provided by Galileo, but are locked in with no good alternatives. We often lose access to the Galileo system. Twice in the past month our hotel results have come back with blank fields in the Hotel Name, Description, and Picture XML nodes (still the case as of this writing). It’s rather tricky to sell a hotel room with only a room type and price. When we do receive hotel descriptions, THEY COME IN ALL CAPS, and with no meta-info to format them. I’m currently re-writing 300 of our most popular hotels' descriptions, one-by-painful-one.

It took us four months to integrate the airline web services. We got cryptic error messages, little support, and seemingly random things coming from the GDS.

Are you kidding me?

Contrast this to my experience with Viator. I sent an enquiry email on December 1^st 2004. Had a thoughtful response an hour later. Exchanged several emails throughout the day. Had an Affiliate partnership setup the same day. Their affiliate program offers 80% of their merchant XML capabilities. There was no setup fee, quick and expert service, and their web services were fully documented and consistent with specs.

This was awesome, and enlightening. They were willing to make modifications that will make us successful. They understand that we're new and different. They also understand that if we're successful, they're successful too. We built a data object for Viator’s web services and had them integrated into our site in three days with zero hassles.

This is the kind of company I want to work with.

What should you do?

Rethink your business model. What else can you offer? Can it be faster, cleaner, cheaper, simpler, stickier? Look at Ntrans in Norway, they offer hotel commission collection for just over a buck a room night. Look at Frommer’s content licensing program (simple but powerful). Look at LeisureLink, offering rental properties with great content, attractive offerings, and clean XML. Steal all these ideas. Make everything simple and easy to get started with.

Get a crack in-house team together. Have them start from scratch. Junk all your legacy systems. Leverage your network, your in-house talent, and your distribution partners. Spin this new entity off, don’t stifle it. 

Do it quick. I'm jumping on board with the first GDS, established or upstart, that provides me with:

-clean, stable, well-documented, web services that follow OTA specifications

-low prices

-quality and diverse products

-innovative services

-compelling content

-easy setup and integration

-willingness to work with us.

Thank you for your consideration,

Adam Smith

CEO Traveling Party Inc. - TripInvite.com

P.S. Call me if I'm mistaken and you can offer what we need today – I’m yours. Call me to discus how we might work together in the future. My cell number is (617) 970-0000.

P.P.S. Don't ever, ever, try to sell me your APIs again. Send them to me for free, brought on disk with a sales manager over a nice lunch (on you).

Comments

[Gary Potter]

Adam, I'm a part time reader of your blog - usually my stopping by is because of a mention of Sabre or Travelocity. I work at Sabre and my role is that of Sr Director R&D Projects. I read your post with great interest and have forwarded a link and my comments to my boss who worked very closely with our web services team. I don't know of your experiences with our sales guys but I'm confident that Sabre is keen on winning your business. Rather than crash in on your weekend, I will personnaly contact you early Monday at the number you have posted. If you would like to re-start a dialogue earlier than that, call me on my mobile at 940-368-8998. I look forward to meeting with you.

[Arthur Caballero]

Hi Adam,

I'm a Software Developer for the Travel Industry in Mexico. I agree with your letter, Sabre is an old fashion company that has to change. They are offering not robust web service, but behind is the legacy systems anyway (don't even mention the APIS that are difficult to implement and no has noquality). Were I work (www.iidea-solutions.com) we are analizing which GDS or non GDS provider to work with to integrate a Company Expenses Control System to a online booking tool. We really don't have any option than Sabre, because all other providers has not support in my contry, only the big ones (Worldspan, Amadeus) and to work with outside provider makes it expensive but I'm enforcing to not work with Sabre.

It was very usefull your information about providers (Viator and G2Switchworks) who I've never listen before. I'll check them out to analyze their proposals.

I'm available any time to talk, my phone nbr is:
(52)-81-8368-11-11 ext 1052, jacaballero@gmail.com

Regards!

[vanhui]

Hi Adam
My company is also a startup working on a travel community which is composited of few travel-related communities on a single platform. After reading your site reference, I find it interesting and feel we should create strategy alliance together.
Although you are not able to see this abigeye.com in this moment, we can communicate in the emails and I will publish more for you to know. I have setup offices in Singapore, HongKong and China for this project. Please feel free to contact me at vanhui@yahoo.com I look forward to your reply.

[steven davies]

Sabre is an old fashion company that need some optimization.
I completely agree with your sales letter Arthur.

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