I have seen no sign whatsoever that Sabre, Travelport or Amadeus have been offering lower incentives to any travel agencies. The opposite is true: GDS offers to many agencies are better than they have been in the 42 years during which such offers have been made.
In 1984, the federal government adopted regulations that had the effect of allowing the reservation systems, which were then owned by the major airlines, to charge booking fees to all airlines. The system owners then began to share these fees with travel agencies in the form of segment incentives in order to retain the agencies’ loyalty.
As GDSs became more and more essential to travel agencies and were used by virtually all travel advisors, the system owners were also able to charge booking fees to hotels, car rental companies and cruise lines. Since those fees were substantially higher than the fees charged to airlines, the system owners had even more money to share with travel agencies.
Although many if not most travel advisors no longer use the GDSs, the vendors continue to compete for the allegiance of travel agencies that do use the systems nationwide and worldwide. Since booking fees paid by suppliers continue to increase, it follows that incentives to travel agencies are likewise increasing. Although client confidences prevent me from revealing specifics, I can safely make some generalizations about GDS offers these days:
First, the best offers are made to agencies that mainly handle corporate travel. These agencies have the most GDS segments, so there they are more important to the vendors than leisure agencies are.
Second, with some exceptions, the bigger the agency, the better the offer. You probably need at least 200,000 annual GDS segments to be able to compete for top-notch deals, and agencies with at least 300,000 are probably in the best negotiating position.
However, agencies with fewer segments should not despair, as offers for them are also generally better than ever, especially if they have a lot of hotel segments, as those suppliers generally pay higher booking fees than airlines do.
Third, since loyalty is vital to GDS vendors, agencies that just use one system will get better offers than agencies that divide their loyalty among two or three equally.
However, if an agency has 90% or 95% of its segments with one vendor and keeps the second vendor under contract for certain content or for other reasons, the vendor with the 90% or 95% share will still offer deals that are at the highest level.
Finally, you need a lot of time and patience to negotiate the best deal you can. Patience means not taking “no” for an answer when you know that the answer should be “yes.”
