Drivers Behind forming an Open Travel Foundation

This blog post is written by Stu Waldron from TTI's Associate Organisation: Open Travel Foundation.

Current messaging protocols, rooted in standards from the 1960s, are outdated and insufficient for modern needs. The various legacy backends were not designed and architected for what may be called the “shared nothing” architecture of the cloud. Further, the overall pattern of message interaction was designed for a human agent.

Many attempts, with various levels of success, have been made to automate the agent side of the conversation. What remains however is what is called a “client – server” exchange pattern. There is a backend system somewhere one has a conversation with. In the early decades, the result was roughly a dozen messages to get one booking, long called the “look to book ratio”. As pricing and product options became more sophisticated, this exploded to hundreds, to thousands, to even tens of thousands of messages per booking. The booking is the only message where everyone makes revenue. That message imbalance is a major driver of the cost for distribution of a travel product. Another being the cost of labour to support the complexity of the messages driven by pricing and product options.

The result is high costs with high skill requirements to get any travel product published and available for sale on travel commerce channels. The labour pool with the needed experience is shrinking. Use of AI can mitigate some of this shortfall but has limits. These issues act as a barrier preventing the majority of travel related products getting to a mass use channel. In the United States, mainstream distribution channels boasted a total operating revenue of $120 billion in 2019. This figure, however, represents only a fraction of the entire travel market, as total U.S. travel revenue reached a staggering $1.1 trillion that year. These numbers declined through the pandemic but have recovered. The significant disparity between these figures highlights a substantial amount of unreachable travel content, underscoring the vast potential revenue left untapped. For the travel products that do get published, there is a lack of distribution options translating into a lack of competition, often resulting in higher distribution costs.

The travel retail market constraints are rooted in legacy technology upon which business processes and revenue models were built. The latter makes it extremely difficult for any one company or industry segment (air, car, hotel, etc.) to unilaterally change. Opensource based approaches have had success in such scenarios as they pull together a community which acts together to share costs and risk.

The Open Travel Alliance is extending its current mission by creating the Open Travel foundation, as part of the Linux Foundation, to deliver a combination of standards and open-source code.  The concept is simple. Use the approach defined by the Linux Foundation that has successfully addressed many complex industry issues. Instead of numerous organisations in travel retail funding the efforts needed to modernise, do the non-competitive parts as a community. This will drastically lower the overall cost to deliver for all participating. An added benefit will be commoditisation of how the organisations in travel retail interoperate to provide a customer trip level bundled solution. That is, distribution costs are going way down. Predictable API data and behaviours, which is not the case now, will allow AI based automation of many functions today including code generation. This will further pull-down costs to publish and consume travel offers. This reduction in costs allows travel products and services that are not currently profitable for a channel to sell to break thru.

Anyone can join and be part of this effort to reshape how distribution works. Learn more and request to participate on the Open Travel website.