CHALLENGES IN THE GDS MARKET IN INDIA

The GDS Industry in India is still relatively in its development phase with a history of over fifteen years. While traditionally the market faced slow and skewed growth – today the situation is very different with more volume drivers for GDS systems outside of the traditional air content bookings. This growth and evolution of the GDS is a direct reflection of the dynamics of the travel and tourism industry. The unique factor about the Indian market when GDS was introduced, which still holds true, is the level of diversity and fragmentation. The travel trade has been mushrooming across the country with a majority being held by small private players. The industry environment was also extremely controlled and closed. The biggest turning point was the announcement of the ‘Open Skies’ policy in the nineties. This had a tremendous impact in terms of volumes, new players entering the market and also the advent of the Low Cost Carriers. The travel trade on a parallel level witnessed large global players including Kuoni and Carlson Wagonlit enhancing their presence in the region. All of this led to a growth spurt in the GDS business but it also led to a very important change. The need to innovate was felt strongly over the past decade. Zero commissions and e-bookings no longer gave the industry the luxury to depend on pure air content bookings. In a way this challenge has also led to a new level of maturity in the business. We are now constantly evolving our product to work less as a tactile tool and more as a smart technology solution to add value to the travel agents business and directly impact the bottom line. New innovations in non-air content are also an important factor contributing to the travel agents ability to provide holistic travel solutions and council to the end customer. If we look at developed markets like the U.S.A. and U.K. there are a lot of learning from their growth story which if observed and applied can have a significant impact on our business in India. These markets have already gone through the different phases of growth and change we are facing here in India today. The most important learning is how these countries have consolidated their markets and are now more focused on dynamic packaging. They have completely changed the utility of the GDS to emerge as an intelligent tool to create end to end travel solutions. The capabilities of the platform have been innovatively stretched to explore new realms. A great example of this is the integration of non-air content – right from hotel bookings, car rentals, cruises to even bus and rail content. There is a growing demand among Indian end consumers of such solutions and it is now up to the travel agent to transcend into utilising the GDS as a facilitator. Another great learning for the industry in India taking example from developments in the west is the advent and evolution of the travel trade going online. While airlines and all other travel components are available to the end consumer at the click of a button – the traditional brick and mortar travel agent can still add further value beyond this and provide complete solutions on a digital platform. Traditional agencies and new agencies are finding their presence in the online space to slowly become an imperative for future growth. We are also witness to an overall era of consumerism at its peak. Hence here – the only differentiator in a relatively homogenous environment becomes the ability to add value to the service or product you are offering. Value Added Services (VAS) is of course a given component. Right from the travel agent to the airlines – VAS has become a great way to offer value and hence enhance revenue streams from the end user in a highly price sensitive environment. The American market has epitomised the concept of how a Low Cost Carrier can utilise this route to actually influence overall profitability. The Indian travel industry and GDS market in specific has been experiencing rapid change over the last decade. The pivotal point is how we can best manage and leverage this change to influence growth. However, the Indian environment is still unique compared to the rest of the world and hence we should apply our inferences from international markets and create a local context. Hence, while we have great learning from developed markets, there is also a need for a local approach to create a definitive impact on the industry.