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Abstract
The economic uncertainty, ever changing market dynamics, changing competition landscape, emergence of new channels of distribution, and increasing costs has created new challenges for travel companies, especially in the methods used to distribute travel products and still achieve profitable growth. Travel companies are now realizing the importance of adopting different strategies for effectively using multiple channels of distribution in order to maximize sales and revenues. To achieve the stated goal, companies need to manage the technology disruptions well by using them to create competitive advantages. This paper discusses how cloud computing, a disruptive force, has the potential to change the face of travel distribution systems and be leveraged for competitive advantage.
Introduction
The last decade has seen major changes in the travel distribution landscape. First, it was the Internet that started a revolution and forever changed how the travel industry operates. This online boom followed by subsequent economic slowdown has created new dynamics in travel distribution. The proliferation of smart phones and social media has resulted in further creating both chaos as well as new opportunities. While opening up new avenues for growth, these developments have also created new operational challenges.
Business Disruptions
Just prior to the recession, online travel booking soared to all time highs attracting further investments in IT infrastructure in demand anticipation. However, discretionary travel was one of the first spends that was cut down during the slowdown. This caused a severe strain on financials and travel companies had to rethink their models yet again.
integrating different social media components with their sites. Of course, more number of channels also increases complexities in product management.
Cloud based flexible and on-demand infrastructure enables a travel enterprise to offer mobility and social media channels without incurring any fixed cost. Using a cloud infrastructure, a travel enterprise can start in a small way and grow into these evolving markets with a lower risk and financial strain.
and systems that interface with the core travel distribution system.
Data lock-in
The primary way to access the cloud platforms is through proprietary APIs. Thus, enterprises feel that they cannot easily extract their data and programs from one site to run on another. But in reality, all major service providers have an obligation in their contract to return the data to the enterprise. These service providers also have data access APIs that can be used to extract data in standard formats.
upfront capital cost Improved operational efficiency due to low marginal cost Ability to manage risks better by reducing fixed investment on any new initiative
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