Taking Distribution To The Second Level

Global Distribution Systems (GDS) are now increasingly looking at shifting their focus as well as competitive premise to secondary cities with their template of technology and training support to tertiary cities, finds Bhisham Mansukhani

The use of technology in the travel space has seen a staggering growth in India. Consequently, the clique of GDS companies have, since inception enjoyed a double digit growth year on year, as they have introduced the agent community concentrated in metro cities to the seamless sophistication that a reservation software and accompanying, organised content extends to their individual businesses.

But as GDS companies further consolidate and deepen their roots in existing markets, they are looking at another frontier to sustain their incredible growth curves as well as open up a new front for competition. The outcome of this is that secondary and tertiary city agents will benefit the most from this emerging phenomenon.

Times Are A Changing

Abacus has maintained a 51 per cent growth for the year 2004 and hopes to build on it further in 2005. With a new managing director at the helm of its affairs, Abacus sees 2005 as the year of the secondary agent. Abacus Distribution Systems (India) managing director Viiveck Verma feels the time is ripe to magnify the GDS footprint to more than 80 Indian cities at the very least. "The proliferation of travel agencies has deepened as the process of acquiring an IATA accreditation is a lot easier. The domestic aviation map has consolidated and more capacity is being added. The idea of overseas travel for leisure and business purposes has changed dramatically. Put simply, travel has now become a very achievable prospect.

“From a software standpoint, the metro cities are firmly established and there is going to be considerable growth in the secondary cities from an organic viewpoint, as we start to open our own or representative offices or using satellite coverage. From economic perspective, these things are a lot more feasible and there is a lot more money than the travel agent community is willing to invest. The quantum of investment required has also been scaled down. There are many entrepreneurs who are keen to invest in infrastructure and want to explore the franchisee option. These individuals see it as an opportunity to promote themselves as well as the pride of putting their town or city on the high-end technology map,” expounded Varma.

Agrees T Thomas, ABC International, Mangalore, "Business has taken on a new stride unlike a few years ago when everything was done manually or transmitted through datalines, which again was time-consuming and tedious apart from having its own problems regarding reliability." What has encouraged Varma greatly is how the landscape in terms of technology has changed in India with ease of access and the quality and reach of Internet Service Providers (ISP) improving considerably. One of the largest shifts, by far, is the level of comfort that agents have with the use of technology, which makes the GDS investment into access and education pertaining to the internet from the ground up, a minimal concern. Broadband in the semi-urban and rural areas has set the pitch for progress. Varma identified upto 80 cities in that respect with the caveat, however coverage from a standpoint of whether people within these regions are travelling and whether enough bookings are being generated differs with some volatility.

Sanjay Singh, Partner, Aditya World Travel, Vizag, Andhra Pradesh says, "Ours is still a developing market as we do not generate substantial international bookings. On the whole, there are just a handful of agents using GDS right now. GDS are however very forthcoming and prompt in terms of service and presumably realise that the room for growth in this city is probably more than what it is in markets where they have been distributing their software for sometime. On our part, we see their attitude, inspite of the modest business we generate so far, as great foresight." Adds Varma, "I feel Jammu and Kashmir, Punjab and some of the other states are virgin markets with a huge captive clientele as CRS coverage in these regions is only now beginning to take off. Another region is the north-east, Shillong and Guwhati that are all unexplored markets while the concentration so far has been on major cities like Kolkata and Jamshedpur. In the west and south, the coverage has always been higher, compared to the rest of the country. Jamnagar, Surat and Pune have always been on the radar. Similarly, in south India, Mysore, Vijaywada and Vizag figure on the top of the list."

SWOT And Swoop

India is considered as a striking case in point by most GDSs in the South East Asian market as it demands a vast concentration of regional points for distribution, which makes for a customised strategy for this market. "We do not have a set international model that we will institute in the Indian market for secondary cities. Some of the countries in Asia where we have a presence, are so small that the business is concentrated in one or two cities while in India, the potential for scattering the business is much greater, which makes India a very unique market," Varma observed. Regional offices would play a key role in tapping the secondary cities. On the Abacus front, it plans to initiate a process of decentralisation by empowering their regional offices in running day to day operations. We will put in place a resident representative in each city who will not be a GSA in the absolute sense but a point person for the trade," Varma concluded.