Mark Pestronk
Q: This month marks the 10th anniversary of the so-called "full content" fee levied by all the GDS vendors. The original concept was that, for a fee of 80 cents per segment booked on the airlines participating in the program, travel agencies would get access to the same fares that were available on the carriers' websites. In other words, there were to be no more web-only specials, with limited exceptions. How has "full content" worked out for agencies? Are they really getting full content on every participating carrier?
A: The "full content" controversy was one of the biggest news stories of 2006. A search of Travel Weekly's archives yields 39 articles and columns on the subject.
In early 2006, the major U.S. carriers were threatening to drop out of the GDSs unless the vendors lowered the booking fees paid by the carriers. After protracted negotiations, the vendors agreed to cut booking fees a bit in return for commitments from the carriers to provide all of their content through the GDSs.
All the major U.S. carriers and several major foreign carriers joined in. The carrier-vendor wars more or less came to an end.
Since the vendors were getting less money, they turned around and charged agencies 80 cents per segment or booking on the carriers that agreed to provide full content. The fee may have been a condition of the carrier agreements, or it may have been imposed on the vendors' own initiative.
Since most agencies get over 80 cents in incentives, the 80-cent fee was just a net reduction in the net incentives paid to the agency. For example, if your GDS contract provided for an incentive of $2 per segment, then for each segment on Participating Carrier A, you would receive just $1.20, but you would still get the $2 on nonparticipating carriers, hotels and car rentals.
Although agency participation is labeled optional, it is not optional, as an agency that declines to participate in the full-content program must pay the carriers $3.50 per segment for all GDS bookings.
Needless to say, no agency has declined to participate.
In the vendors' standard GDS contracts, the vendors' commitment to full content is vague. Although each vendor has a long definition of the program, it comes down to this: Whatever the vendor gets from the airlines will be available through the GDS, and in any event, the vendors can change the terms of the program at will.
Travel agencies have been very skeptical of the whole program from the beginning. In return for getting access to the same kinds of fares to which they already access, they would now get that access only if they agreed to the fee.
Aside from complaints about the basic concept, agencies have complained both anecdotally and systematically that they are not actually getting full content. The vendors have blamed the carriers or the tariff-publishing company, but to my knowledge nothing has been done, and many agencies are dissatisfied.
On the other hand, the carriers and vendors must see the program as a success, since it has remained unchanged through many rounds of negotiations for renewals or revisions of the carrier-vendor agreements and standard agency-vendor contracts.