NB: This is a guest post by Cormac Whelan, CEO of Dublin-based travel technology company Datalex.
Today’s travel industry demands innovation to compete and the addition of Open Axis will not result in different standards, but will dovetail with OpenTravel Alliance to enhance the industry’s ability to react.
Open Axis will work to define a standard integration schema using XML, which will bring valuable enhancements to existent XML standards.
OpenTravel will continue to benefit from the expertise and experience of Datalex; its airline customers and the work of organizations such as Open Axis.
Datalex is a founding member and sit on the board of OpenTravel and is an allied member of Open Axis, as such we bring our experience to bear for the benefit of supply and demand side of travel distribution.
Both organizations are focused on the right thing; utilizing technology to better enable their member’s respective businesses to meet the needs of their customers and the demands of the market. Both have chosen XML as the messaging standard they want to orientate around.
Our product focus is to enable shopping and reservations functionality through web services and XML so we are already in that business. Our company focus is to enable business flexibility for our customers and enable them to move at the speed their business dictates and desires.
Our customers are very demanding first movers and what we have learned is that the thing to standardize is software (and technology) and not the customers ability to innovate and differentiate in their business.
I think this is where some of the larger organizations in the travel business have taken a mis-step.
We see the future for airlines as the ability to differentiate their value proposition to their customers.
Examples that are delivering significant revenues for airlines are AirFares at Frontier Airlines, Your Choice at American Airlines and Travel Options at United Airlines.
These are representative of the evolving airline retail business practice delivering real results and customer value and we’ve been deploying the requisite schema and functions in support thereof for some years now.
We’ve learnt a lot but mostly that the airlines are keenly aware that they need flexibility in their systems to drive new ways of retailing their products and services and to leverage value across multiple channels –  and one size will not fit all – channel or consumer.
I have no doubt there are some challenges ahead but our view is as long as we make technology the focus of the standards then we (Datalex) and the other technology providers to the travel industry will be able to manage through it and deliver the kind of innovation the suppliers deserve and demand.
Standards are good, they are there to enable the business, where standards are not yet defined we will work to make them happen but the lack of standards should not be an obstacle to innovation.
NB: This is a guest post by Cormac Whelan, CEO of Dublin-based travel technology company Datalex.
Poll: Does OpenAxis belong to the Rebel Alliance or The Dark Side?
About Special Nodes
Open Travel was never a used standard … nor adopted by the travel industry (especially GDS). That was the problem. So a full ecosystem arose around those technical silos (like metasearch companies). And everybody was happy and tried to preserve the status quo. At that time what was important was avoiding GDS to not interconnect and share their information. OAG was key to solve this ‘back-office integration”…
What changed everything is web 2.0. When travelers decided not to go through a travel agent anymore to buy tickets, then everything changed. We had to offer to a non qualified person all information needed to find the right trip segments and book them. It took some time before we finally come to affinity booking and new OTA and metasearch great user interface. Even GDS did an great job to improve their offer.
So innovation was mainly done at front office and mid-office level. Now it’s time to innovate and evolve at the back-office level. And that’s where the problem is headed.
When you see Facebook or twitter API and look then back at GDS API, you can see the difference. Most of the time their API is used to still pass verbs to their systems. And when you develop an interface, the time to build something with a GDS API is incredibly long. Without speaking about the poor support you can get …
At the same time, the rework not done by the GDS was done by airlines, car, hotels, etc. They refreshed their interfaces and booking system (they were forced to do it, just to survive) and created new revenues streams from their direct connect API.
With Google, Microsoft and Apple coming in, helping for the shopping (able to access all direct API and to provide what the GDS was offering in a green screen) and able to redirect directly to the airline web site or to an OTA (being used for the booking and fulfillment) who needs again a GDS?
Finally, if you take into account the dramatic decrease travel agents numbers, leading more and more people to do the job themselves, then you have the equation. The disruption point is there: lots of buyers, powerful metasearch capabilities and direct connect API.
Of course, cryptic commands are still needed for some complex bookings. Applying the parreto law, 80% of the time booking are simple, for the rest you will need professional support. Are GDS still profitable with only 20% of their volume?
Airlines are of course not angels … But they fight to survive and the economic model has changed for ever.