BUSINESS MODEL

TOURISMlink
Food for discussion
SITUATION
Travel distribution chain (2010)
Airlines
Hotels
Restaurants
Complementary offer
Car rental
Rail
Tour operators
Cruise lines
DMC
GDS
Online
B2B
platforms
B2C
platforms
Traditional agents
Online agents
Network agents
TMCs
Customers
Leisure
Business

Suppliers Distributors
Customers
DMC
websites
Direct
Simplification of distribution value chain
Magic
box








Suppliers Distributors Customers
Airlines
Hotels
Restaurants
Complementary
offer
Car rental
Rail
Tour operators
Cruise lines
DMCs
Traditional
agents
Online agents
Network agents
TMCs
GDS
Online B2B
platforms
B2C
platforms
DMC
websites
Direct
Customers
Leisure
Business

OPPORTUNITY
Value proposition Source Markets
Travel agents
Tour operators
Access to niche market, destination by destination, including SMEs.
Access to all complementary offer, not only accommodation
Creation of new and differentiated products for specialized customers
Automatic process
Reduction operating costs (less mistakes)
Business intelligence module
An authentication system for participating suppliers and distributors
A settlement system
Easy access to large market through only one channel, including SMEs.
Access to all complementary offer, not only accommodation
Creation of new and differentiated products for specialized customers
Automatic process
Reduction operating costs (less mistakes)
Business intelligence module
An authentication system for participating suppliers and distributors
A settlement system
Value proposition Destination Markets
Accommodation
Complementary offer
Added value services (basic PMS, CRS, channel manager, business intelligence)
One technical integration with various distributors; channel manager.
Access to niche market and to complementary offer; possible creation of dynamic packaging
Brand and channel control
Business Intelligence, market knowledge
An authentication system for participating suppliers and distributors
A settlement system
Added value services (basic PMS, CRS, channel manager, business intelligence)
Basic PMS and CRS tools for SMEs
One technical integration with various distributors; channel manager.
Creation new and high value product
Access to new markets and niche
Business Intelligence Customer and market knowledge
An authentication system for participating suppliers and distributors
A settlement system
Potential EU market (Eurostat 2010, ECTAA 2009)
Accomodations**: +/- 150.000

Distributors***: +/- 70.000

Complementary Services****: +/- 200.000
(*) Add 400.000 Farm and Village Tourism presents in EuroGites (28 countries)
(**) hotels, apartment hotels, motels, roadside inns, beach hotels, residential clubs, rooming and boarding houses, tourist residences
(***) Travel agents and tour operators
(****) Restaurants, cafes, museums, natural parks
BUSINESS MODELS
Distribution models
IDS/OTA (eDreams, Expedia, Booking, Lastminute)
Strong positioning in the online market
Intermediaries between hotel and customer
Net rates and commission-per-reserve
Access to own external web
GDS (Amadeus, Worldspam, Galileo)
Sales tourism services (flight, hotel, train, rent-a-
car)
Sales through travel agencies (online/traditional)
Connection between the suppliers reservation
systems (airlines, hotels, rail companies, rent-a-car)
and the distribution
Commission to services provider
CRS (Keytel, Transhotel, Hotelbeds)
Offer reserves system to hotels
Manage hotel inventory
Commission-per-reserve or flat fee for adhesion
Branding/ Management group (Leading
Hotels, Worldwide Independent Travel Network)
Differential mark for independent hotel/travel
agencies (quality mark or management group)
Adhesion to brand image and satisfy quality standard
More pressure to negotiation
Commission and annual flat fee
Own reserves central
Infomediaries (Kayak, Tripadvisor, Trivago)
Intermediaries between info provider and info
consumer
Complex search to adjust specify needs client
Revenue per advertising and sales
Innomediaries (Groupon, Letsbonus)
Clients community
Potentiate interaction between customer and
enterprises
Offer daily discounts by price to your members
Ensure client maximum volume until limit
Business Model Options
Option 1: distribution companies contribute
Option 2: services providers contribute
Option 3: both operators contribute
Option 4: public DMO contribute
Option 5: private sponsors contribute
Example business models (cont.)
MicrosFidelio (PMS): license cost + monthly fee to hoteliers
Google: advertising
National Tourism Board: public money
Expedia, Booking (OTA): commission or mark-up from hoteliers per booking
Rate Tiger (Channel manager): license cost + monthly fee to hoteliers
Trivago (Infomediaries): commission or mark-up from OTAs per booking
Hotelbeds (CRS): commission or mark-up from hoteliers per booking
Amadeus (GDS): Commission from hoteliers + compensation Travel agents
Business model options
Option 1 Option 3 Option 2 Option 4
Amadeus
Google
Commission:
Expedia
Booking

Fix fee:
Rate tiger
Microsfidelio

Group on

Trivago
Google
Travel Open Apps
BookNorway
TOURISMlink
(2012-2014)
distribution
companies pay
services providers
pay
both operators
pay
DMO public pay

Option 1: Distributors pay
Operators distributors (travel agency, tour operators, IDS, GDS, OTA,
TMC) pay by offered services. Examples:
* adhesion fee
* access to platform
* transaction fee
* delivered reserve fee
* flat fee
* commission-per-reserve delivered
* new technology services
* support services
Normally distributors dont pay for platform access, nor fee and commission
per reserves. Only for technology, support services and advertising (Google)
Advantages/disadvantages
- Time to market. Its
now or never. Others
will do it.
- Incentive for
productivity
- Difficult to implement
-Strong competition for
free business models

Advantages Disadvantages
Option 2: Services providers pay
Services providers (accommodation, restaurant, destination web and
complementary offer) pay by offered services. Examples:
* adhesion fee
* access to platform
* transaction fee
* reserve fee
* flat fee
* commission-per-transaction
* new technology services
* support services
* buy distribution tools (PMS, channel, CRM, Yield)
Fees and commissions are paid by services providers normally
- Hoteliers are used to it.
- Extremely reduced cost
(Standard, Open source, Saas,
cloud) for innovative technology
- Small fee or small commission
- Simple to manage (fees).
- Time to market. Its now or
never. Others will do it.

- Another intermediary with no
added value for technological
developed hotels.
- Focused on SME with low
technological tools, witch are
difficult to reach.
- A lot of tec. standards in every
country.
- Strong competition for main
technological players that
develop tech. tools

Advantages
Disadvantages
Advantages/disadvantages
Option 3: Services providers and Distributors pay
Services providers and distributors pay by offered services. Examples:
* adhesion fee
* access to platform
* transaction fee
* delivered reserve fee
* flat fee
* commission-per-transaction
* new technology services
* support services
* buy distribution tools
Fees and commissions are paid by Services providers, and
distribution companies pay for technology / distribution tools
- Hoteliers are used to pay - TA are not use to pay for
platform access
- Difficult to implement.
- Need to show
technological value
added

Advantages
Disadvantages
Advantages/disadvantages
Option 4: DMO (public money)
Public institutions like Valencia Government pay for building up the
system and maintaining it in the beginning. Examples:

Travel Open Apps
BookNorway
Tourismlink
- No market / commercial
risk
- Not sustainability
model
- Need public money
Advantages Disadvantages
Advantages/disadvantages
Option 5: Private sponsors
Private sponsors (DMO or enterprises) pay for particular services like
specific B2B marketing support
- Pay for interesting
services or custom
services
- Market / commercial
risk
- Not sustainability
model
Advantages Disadvantages
Advantages/disadvantages
OPEN DISCUSSION