ACTE PRESS RELEASE
For Immediate Release
ACTE Embraces Key Recommendations to Prepare Members for GDS Deregulation
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London (30 November 2004) -- Dozens of high-level industry representatives from the EMEA region gathered here today at the Association of Corporate Travel Executives' (ACTE) November 30, PowerTalk to discuss the proposed deregulation of global distribution systems (GDSs) in Europe. The morning forum was part of a broader ACTE initiative to communicate the effects of global trends to the local level. Led by Alex Cruz, founder and managing consultant, ALNAD Ltd., the meeting outlined the potential impact deregulation could have on each segment of the corporate travel community and produced specific recommendations to help ACTE members prepare their businesses for a deregulated environment.
The PowerTalk also revealed the results of a recent ACTE survey of EMEA members aimed at gauging industry perception of GDS deregulation in Europe. According to the survey, an overwhelming majority of ACTE members --92 percent--said they do not believe the GDSs provide all the content their companies require, while 70 percent believe their company's travel management processes will change as a result of deregulation. More than one-third of respondentsÑ38 percentÑsaid they do not believe their company will be in a better negotiating position following GDS deregulation.
The ownership of Amadeus--one of the four primary GDSs--by Air France, Iberia, and Lufthansa is another chief concern for corporates and agencies, and is one of the biggest barriers to deregulation, according to Cruz. He predicts deregulation will take roughly two years to come to fruition, but notes that the timetable hinges on whether the airlines' agree to sell their stake in Amadeus. Cruz told PowerTalk attendees there is a 75 percent chance of airline divestment in the Amadeus GDS.
In light of the airlines' current ownership of Amadeus, and the potential for continued ownership, The Brattle Group, which was commissioned by the European Commission to determine the most appropriate path to deregulation, has recommended legislators keep in place the current mandatory participation rule, which compels GDSs to display equally suppliers' content.
Claude Demeestere, Director Corporate Marketing Solutions for Amadeus, told PowerTalk delegates that full deregulation would enable GDSs to provide more compelling content and services to corporations. "It is absolute nonsense that we would bias our display. Deregulation will allow us to prove our value."
David Taylor, Director Strategy, Worldwide Travel Distribution for Worldspan, (whose owners are one of the bidders for Amadeus), emphasized that full deregulation is necessary to allow the GDSs to effectively compete with new entrants into the marketplace, particularly the online players. "The new distribution channels don't have these regulations so they can do things that we can't. We want a level playing field." Sabre, meanwhile, supports the Brattle Group recommendation to take a more measured approach to deregulation.
Without a mandatory participation rule in place, Cruz said corporates face the possibility of content fragmentation, which could ultimately lead to higher costs to access supplier inventory. Protecting the integrity of corporate traveller data, or MIDT, is also a concern for buyers in a deregulated environment, said Cruz.
At the same time, deregulation could give agencies broader access to special fares (e.g. Web fares), flexible GDS contracts, and continued incentives, which in turn would benefit their corporate clients.
ACTE has embraced the following recommendations made by Cruz to help members prepare for deregulation:
Stay up-to-date with developments
Be proactive and ask questions often from GDS with regard to their plans
Talks with airlines/hotels regarding any screen biasing practices
Continue pushing online traffic
Keep senior management informed
ACTE members should also study the evolution of GDS-agency-supplier relationships in the US, which finalised deregulation earlier this year. In addition, Cruz suggests companies build strategies into the RFP process that consider GDS deregulation. "Keep in mind too that when airline contracts with GDSs expire next year new pricing schemes will emerge that will include considerations for the new freedom."
About ACTE
Founded in 1988, the Association of Corporate Travel Executives (ACTE) is a member-driven organization dedicated to advancing the business travel industry through is educational programs, local initiatives and government relations. ACTE membership totals more than 2,500 in over 37 countries, including business travel executives in Asia-Pacific, Canada, Europe, Middle East, Africa, Latin America and the United States. The organization is headquartered in Alexandria, Va., with regional offices located in Canada, Brussels, France, and Singapore.
Note to the editor: Photos are available: Please select the pictures online at http://www.sb2o.com/LONPT/
For high definition photos send the files name requested to Stanislas at [email protected]
For more information, contact:
Stanislas Berteloot -- Director EMEA
Association of Corporate Travel Executives
Tel +33 1 60 19 39 07
Tel +33 6 80 40 40 56
E-mail: [email protected]
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