The Future Of Global Distribution System Tourism Essay

The economic uncertainty, ever changing market dynamics, changing competitive landscape, emergence of new channels of distribution, and increasing costs has created new challenges for travel companies, especially in the methods used to distribute travel products and still achieve profitable growth. Travel companies now realise the importance of adopting different strategies for effectively using multiple channels of distribution in order to maximise sales and revenues. To achieve the stated goal, companies need to manage the technology disruptions well by using them to create competitive advantages. Today, all the major players of Information Technology service providers are tapping the potential of Global Distribution System to attract their customers. At the same time, the demand of Cloud services has seen a rise hoping for increase in level of efficiency.

This paper discusses how GDSs and Cloud Computing, a disruptive force, has the potential to change the face of travel distribution systems and be leveraged for competitive advantage.

Survey was conducted among individuals and travel agencies agents to analyse the aims and objectives of the research study. The outcome of the survey states that how the existing system can be developed to give better results.

CHAPTER ONE

Introduction:

“There always comes a moment in time when a door opens and lets the future in.”

-Graham Greene (The Age of Unreason)

Introduction:

This chapter introduces the concept of the future of Global Distribution System; cloud computing as an alternative distribution channel to reader and provides the necessary background to the research. The chapter gives the idea about the focus and boundaries of the research by exact aims and objectives. The further section gives a detailed overview of the structure of this document.

Introduction to IT and Tourism:

O’Connor P. cited (Sheldon, 1993) “Tourism is acknowledged to be very intensive-in fact; information has been described as a ‘lifeblood’ of the industry, as without it the sector could not function.” Tourist needs information before going on a tour. They need plan prior to and choose options according to their availability of time during the or before tour (O’Connor P. 1999). “Information technology (IT) – the amalgamation of computing, communications and electronics- has almost universal feature of the tourism industry (Bennett, 1993).”

Internet is a part of every individual’s life since late 1990’s. The information provided on the internet has helped all in each and every field. It also helps commercial airline companies to have a better option in airline services avoiding travel agents. Being part of the service market, vacation has certainly been associated with upgrades in new technological innovation and recharged by business and structural upgrades. There has been a design to the balance of the visitor product by a way of customization, despite the pressure from visitor suppliers who still recommend provides of large vacation.

“Internet has a potential platform of tourism business but it also provides a tool for communication among the tourism supplier, agents and the consumers in a cost-effective ways.”(scribd)

“The advent of internet- based e-commerce has offered opportunities for small and medium size travel enterprises to expand their customer base and rationalise their business.”(OECD 2000)

IT is reshaping the structure of both society and economy in general and also consumers increased demand for information. This is more important for tourism enterprises to give services effectively. At the end tourism industry need to understand and utilize IT strategically in order to serve their target markets, improve their efficiency, maximise profitability, enhance services and maintain long-term profitability (Bahalis, 1998)

Introduction to Global Distribution System:

“A global distribution system, or GDS, is a computer distribution system for displaying available services, effecting bookings, and ticketing by tourism procedures (suppliers) – airline or otherwise – on an international scale.”(future)

Before the development of computerised systems, booking an airline ticket was a complex process. Airlines periodically published their schedules and fares in booklets, which were the distributed to travel agents (O’Connor P. 1999). The process of searching through multiple flight schedules was simplified by the publication of merged directories such as the official Airline Guide (OAG), which unite times, dates and prices from multiple airlines into one publication (Bennett, 1996).

The evolution of telecommunications technologies over the past 10 years has left virtually no sector of the world economy untouched, including the commercial air industry. This is the major change and fast improvement in the consumer-oriented applications, such as the World Wide Web for accessing the basic information and booking airline tickets. Today people use various websites which provides a good interface to the Central Reservation system and Global Distribution System such as Orbitz, Travelocity, etc., along with the direct reservations site operated by individual airlines, allow travellers to access information on schedules, prizes and travel times. (airport)

GDS were originally designed to distribute airline seats; their database structure was designed specifically to store information about that product (Emmer et al. 1993).

A Global Distribution System (GDS) has evolved from CRS.

“It is a computer reservation system that contains information about multiple airlines and is used by travel agents and other travel professionals. It also contains information about other types of travel products as hotel booking, car rental etc”

Introduction to Cloud Computing:

Today, the various software (set up) are simply available for users as a service, which can be accessed over web browser where user can be charged as per usage of these specific services. Cloud computing is used to utter a huge data centres of hardware and software. (Armburst 2009 Vi)

Instead of storing the huge amount of data on PCs or huge servers, now days it is rather stored on a centralised system called Cloud. This concept is called Cloud Computing. Cloud computing service provider’s aims to offer Pay-as-you go services to enterprises with low cost, scalability, increased efficiency and high returns of investment.

Many developed and developing countries are adopting this cloud computing technology, as it offer scalability, fast development and reliability and pay-as-you go financial model.( Dikaiakos et al. 2009 vi) The growing popularity and acceptance of cloud technology is eminent in the study conducted by Brocade. Using these special capabilities and characteristics tourism businesses are moving onto cloud. As per previous study conducted on cloud computing in the UK explains that 94% of existing users are delight by using cloud services from various providers (Marks 2001), at the same time US government also has increased its investment on cloud computing by 40% from annual income in respect of strong support for the development of Cloud Computing. (Hanning 2007)

Focus of study:

The research is to understand the competitive challenges and threats facing GDSs resulting from the emergence of cloud computing as an alternative distribution channel, as well as possible strategies they may adopt to remain competitive. A shift in distribution as a result of technology could bring into question the underlying economics of the GDSs. To what extent the emergence of the CC as an alternative distribution channel will mark the end for GDSs, or whether GDSs will be forced to evolve and offer additional services is the subject of this dissertation.

The research includes primary as well as secondary data, in which primary data will be gathered by conducting an online survey from individuals and conducting interviews with employee working as travel agents of different tourism enterprises in India. The secondary data is gathered from the available data, previous research on topic, journals, books and periodicals which will be further analysed in chapter five (discussions of results).

Aims:

Make a clear understanding about current airline information and ticket reservation system in airline sector.

To access the current impact of Global Distribution System (GDS) on the travel industry.

To investigate the development of cloud computing in the tourism industry.

To evaluate critically scope/impact GDS and cloud computing in relative to travel booking system /procedures.

Recommendations for the future of the tourism industry in terms of past and current technologies in context to air line.

Objectives:

To identify term GDS and critically analyse different factors of distribution channels in support to implementation of GDS.

To explore the nature of the current scenario of GDS and Cloud Computing in perspective of airline reservation system.

To recommend feasible business and information strategies to achieve best performance in service and real- time processing information related to air ticket sales and distribution.

To consider not only specific service provider but all stake holders in the air travel sector both in terms of cost and performance efficiency.

Reason for selecting a topic:

Tourism industry undergoing major change and facing new difficulties, the two dimensions of the change can be identified:

New forms of tourism, characterized by the tendency to depart from mass tourism.

The diffusion of information and communication technologies, with a pervasive effect on the creation, production and consumption of the tourist product. (SD )

GDSs, only administer reservations, they do not manage the stock of suppliers; this task falls on the supplier’s own reservation system. The cloud computing has added a commonly accessed, and broad channel of distribution, allowing airlines and other travel reservation systems. (Future)

In addition to the selection of the topic being source of competitive advantage, reservation systems become a profitable business.

GDS and cloud computing some cause of future intermediaries in the travel distribution process.

Dissertation Structure

The dissertation is comprised of the following 6 chapters:

Chapter 1: Introduction

Research topic is introduced in this chapter along with my personal inspiration behind carrying out this research. It highlights the issues and background for selection for this topic. Aims and objectives are assured so that the research meets its desired goals.

Chapter 2: Literature Review

The second chapter composed literature review about. This chapter come across literature about distribution channel, GDS system and cloud computing. Then further discussion about how they generate values to business. This chapter also tries to investigate the literatures about research reason and outline theories that would be help to analyse the result of research.

Chapter 3: Research methodology

This chapter focuses on the available research methodologies to carry out the research. It will discuss that how the objectives can meet its desired goals with the help of right approach and method. It will explain further that how the data will be gathered and analyzed. Ethical consideration and validity of the research will be stated at the end of this chapter. (This chapter studies the Research methodologies available to conduct Information systems research and finally make a choice of research design to conduct the study.)

Chapter 4: Results

This chapter will outline the findings of this research, performed via survey approach targeting individuals.

This chapter focuses on the basic finding of each section of the questionnaire with the help of figures and tables, denoting the responses achieved.

Chapter 5: Data Analysis/ Discussion of the Results

This chapter will discuss findings and result of the survey questionnaire. The analysis will be made on the result achieved, which will be combining with the outcome of literature review. This chapter also will end with a valid conclusion and well defined summary.

Chapter 6: Conclusion and Future Study:

This chapter will discuss findings and result of the survey questionnaire. The discussion will be made on the results achieved, which will be synthesized with the outcome of literature review.  This chapter will finish with a valid conclusion giving a brief summary about the discussion made and outcomes achieved. 

Summary:

This chapter gives a brief overview of the study being carried out and outlines the research objectives and the structure of the dissertation.