Suppliers and buyers, reclaim control of the distribution

The most efficient marketplace is the intranet

As I have already suggested, suppliers and buyers should have equal interest in reviewing the entire distribution structure. Both corporations and organisations are integrating most of the business and administration processes in their global IT networks, marketing, sales, HR, education and training, design, purchasing and production, it is all in place. It is hard to understand why regular business transactions with suppliers in the travel industry should take place in a marketplace controlled by the suppliers or a third party dominated by supplier interests.

The intranet is cost efficient, it provides the supplier with the means of direct communication with the end user and it gives the travel manager the ideal instrument for steering and control. No more problems with mandating, no more problems with management info and feedback.

It is not long ago that travel agency sales staff had to operate dumb terminals. The change to intelligent PC systems makes the intranet applications work efficiently also for travel agents. Corporate rates and fares can be loaded and mandates in- and outside the corporate intranets. All statistics are automatically consolidated - a dream has become true.

The technology has changed - and so has the perspective and balance of market power

With the technology available today the buyer has every possibility to decide which products and services that should be used by his company or organisation. Tools for self service reservation have been on the market for quite some time but not as user friendly as they are today. Another major difference is that there are now tools that were  originally designed for and based on internet applications, entirely independent of the awkward GDS systems.

A clever move for suppliers would be to accept the intranet option. That would enable them to get 100 per cent attention for their products and services. It would close out all competing suppliers which have not been selected by the travel manager. It would also make it un-necessary to accept the costs of presence in other systems as well as kick-back and bonus costs to other parties in the market.

The dominating systems are still basically sales channels and should as such be financed by the supplier. What the market is going to require is tools for booking and procurement. If that happens I am convinced the buyer will accept the expenses as administrative costs, particularly if the costs are considerably less than the consolidated distribution cost in the present structure.