Looking ahead to 2003, we see the new GDS regulations to be one
of the most important issues facing the travel agency
community.
We believe, however, there will be numerous changes to the
proposed regulations prior to any final implementation. While the
current regulations were initially set to expire on Dec. 31, 1997,
they have been extended on several occasions by the Department of
Transportation. We believe the DOT continued to extend the date in
order to avoid addressing issues, such as Internet travel sales,
that were not relevant at the time the initial regulations were
issued almost a decade ago. We also believe that the final version
of the regulations will reflect the primary goals and objectives of
the airline industry, despite contrary positions and views from
other parties.
As our clients are aware, the airlines presently receive
marketing data from the GDS vendors, which is very important to
market share analysis. DOT has indicated in their proposed
regulations that the data can be anti-competitive to new, low-fare
entrants and, thus, the GDS vendors should be prohibited from
making that data available to air carriers. We believe that the
marketing data will be allowed, in some format, despite DOT’s
initial opposition. It is also interesting to note that while
various industry segments have conflicting views, there is no
distinct consensus as to the final format of the regulations. We
continue to believe that a properly negotiated GDS contract is one
of the few opportunities for a travel agency to create a win/win
situation with a vendor.
While many of our clients have signed three-year agreements, we
still have travel agency clients re-signing for five years. One of
the most important aspects of GDS negotiation is to make certain
there is a significant margin of safety to prevent any shortfall
type situations.
