Techtalks: Traveltech

Hi Adnan,

There’s no simple answer to all of your questions. I’ll try to answer a few those:

What are the differences between these companies and consolidators? We know that consolidators buy flights seats in bulk. Other than that then what?

We call companies like Duffel or Travelfusion aggregators. Normally, they connect to various providers to enable access to all that content via a single API. In the most basic terms, consolidators traditionally sell private fares, those that you can’t display publicly on a website but you can sell via a phone or as part of a larger tour package. Aggregators, on the other hand, collect all content, both private and public fares. But that’s a very simplified definition because those companies that have traditionally been consolidators can also sell published fares or offer other services. 

Which would benefit us more in terms of rates, flight inventory, and customization (markups, commissions)?

It all depends. Different providers have different strengths. If you want to display flight prices online, you’re dealing with published fares. Agent commissions there are very thin. If you act as a merchant of record and add your own markups, it’s easy to fail because of the fierce competition and travelers' price sensitivity. You have to find a handful of suppliers, negotiate directly and win exclusive deals that will drive sales for you.

Are there better options than these companies?

Again, it depends. You may also explore host travel agencies besides consolidators, aggregators, and GDSs. If you don’t have IATA accreditation, you can’t ticket flights, so you’ll need somebody to help you with ticketing.

Should we combine APIs from different sources? Any tips?

It’s definitely harder. Smaller businesses usually connect to a single API. 

Is Hotelbeds the best overall choice for us?

They do have a large inventory, so I’d look in that direction. Also, check WebBeds, another large bed bank.

If combining suppliers, which would be the best combination?

It depends on the specific markets that you target. You can consider some aggregator or large OTA (e.g. Expedia) that works with your target suppliers, integrate their API, and then directly negotiate with those suppliers to get better deals.

You may also contact our experts at solutions@altexsoft.com. 

Hello again altexsoft team

So if we've understood everything correctly commissions are very thin for agents selling flights generally. Which we agree with. You won't see suppliers offering more than 10% for each flight sale. This is why we where leaning towards adding markups. We thought if it as a solution to complement the thin commissions. But it is as you mentioned. Prices between OTA's are competitive and customers are price sensitive so having markups isn't a great idea. This means that our only solution should be working on commissions. 

The thing is, who do we negotiate with. There are hundreds of services out there that offer flight content. Some of them are aggregators and others are consolidators and some just combine multiple sources into one api. Where do we begin. And even better, who would negotiate with a startup that has no selling volume. It seems like we have hit a road end. 

Maybe our thought process for the startup was all wrong. Maybe our goal of having a broad and big inventory wasn't the greatest idea for a startup OTA and we should think more strategically. We've thought a bit and aince we are a startup in Sweden we maybe need to focus on destinations that Scandinavians often travel to. And pick suppliers that will be the best for these destinations. Now we have a more clear audience and researching what those  destinations, countries and cities that Scandinavians often travel to won't be a problem. The problem is who to choose from the big sea of flight suppliers out there.  And if they are even willing to negotiate.

We saw you mention something about travel host agencies and we went up to learn more about them and we stumbled upon an article from you guys. They seem to mainly work with newcomers just like us. We also saw high commissions being brought up but we didn't understand what was high. Is the commission itself per sale that is high or are we just talking about the commission split between you and the supplier with you being the one taking the biggest part of the split?

Another question, how does it look for hotels. Is it the same fierce price competition between ota's that won't make you able to add markups? Doesn't suppliers like hotelbeds give you cheap rates making it possible to add markups since they buy in wholesale? I've heard that commissions on hotel sales are generally higher than flights.

Any opinions and inputs are very appreciated. Thanks in advance

Thanks for sharing the background of your idea! It sounds like a great concept to create a unified platform for bookable services across industries. I understand the challenge with fragmented sectors like beauty, where multiple booking systems are in place. Focusing on the travel industry first makes sense, as GDS systems offer a lot of readily available content. It’s a smart approach to start with an industry that’s already structured for easy integration before expanding to others. Best of luck with your platform!

xxx