This GDS vendor ‘fee’ appears here to stay


This GDS vendor ‘fee’ appears here to stay

Mark PestronkQ: Fifteen years ago this month, Sabre rolled out its Efficient Access Solution program, under which agencies agreed to an 80-cent reduct

White House appears to back away from Covid testing for U.S. flights
Ryanair joins ambitious ‘Fuelling Flight Initiative’
Moxy Hotels’ first resort-style property opens

Mark Pestronk

Mark Pestronk

Q: Fifteen years ago this month, Sabre rolled out its Efficient Access Solution program, under which agencies agreed to an 80-cent reduction in segment incentives in return for so-called full content on the major U.S. carriers. The other GDS vendors then copied the 80-cent reduction under their own euphemisms: Super Access (Worldspan), Content Continuity (Apollo) and Content Plus (Amadeus). Has the program or the fee changed? Is “full content” still actually provided? More broadly, what’s new, if anything, in GDS deals these days?

A: In GDS contracts, the 80-cent reduction is stated as a fee, which is then applied against segment incentives in the contract. The 80-cent fee is frozen in amber and shows no sign of change or repeal.

Although the GDS vendors reserve the right to raise the fees, none has ever done so. Nor have they ever lowered the fee for any but a small handful of very large agencies.

The original idea of these programs was that if the major U.S. airlines promised the vendors access to the same low fares that the carriers put on their websites (i.e., the carriers’ full content), the GDS vendors would give the carriers a break on the per-segment fees that the vendors charged the carriers. That deal left the vendors somewhat short of the carrier revenue that they had before, so they turned around and compensated for the loss by imposing the fee on agencies.

The odd thing is that, although all carriers have renegotiated their participation agreements with the vendors several times since 2006, the 80-cent fee hasn’t changed. Given the carriers’ constant complaining about the per-segment fees and their various attempts to bypass the GDS, I deduce that the per-segment fees paid by the carriers must have increased since 2006. However, the vendors haven’t provided agencies with a concomitant reduction in the 80-cent fee.

Just as importantly, “full content” has always been at least partly an illusion. Throughout the last 15 years, my clients have repeatedly pointed out instances where a given carrier’s fares were lower in multiple cases on its own website and on GDSs other than the one used by the agency.

The full-content program clauses in the GDS contracts do promise full content, so it is remarkable that few agencies have sought a refund of the 80-cent fee and that no agency has filed a suit for breach of contract, to my knowledge. Perhaps they have been satisfied with the gradual increases in the overall incentives that all vendors have offered to most agencies in the past decade and a half.

Based on the GDS offers that I have seen lately, two big, recent changes are the absence of signing bonuses for both renewals and conversions and the splitting up of segment incentives by type of travel supplier in some cases, so that bookings on some kinds of suppliers pay more than others.

In addition, Sabre has recently hinted at larger agency incentives for Delta premium or tailored offerings, and the other vendors usually copy what Sabre does.