Orbitz Worldwide's Multi-GDS Strategy

Orbitz Worldwide is an online travel company hailing from America focused around providing customers with new ways to organise their vacation from booking car rentals to hotel rooms to activities.  Orbitz Worldwide owns many brands around the globe such as ebookers.com (in Europe) and orbitz.com (in North America).  Two-time winner of the glassdoor.com employee’s choice for ‘#1 Travel Company to Work For’ in 2012 and 2013, it has proven to be a successful travel company.  Initially having partnered with Travelport, a Global Distribution System’s provider, they have now decided to associate with Amadeus and Sabre, Travelport’s primary competitors.  This has allowed them to increase the portfolio of products that they can make available for their customers to choose from.

Since signing a contract with Travelport in 2007, the latter had been giving Orbitz exclusivity provisions.  Now that these new partnerships have arised in 2014, Travelport has decided to discontinue these exclusive rights in 2015.  Tis could possibly due to their discontentment at the fact that Orbitz has allied with its main competitors.  Nevertheless, in the eyes of Orbitz, these new partnerships gives them and their customers a much wider ease of access and facilitates their booking process for all their brands.

This is a surprising announcement as Orbitz already has a contract with Travelport to cover North America.  There are however several possible reasons as to this partnership.  Firstly, as Amadeus has a small market share in North America, they can benefit greatly from allying with Orbitz Worldwide to increase their market coverage.  Secondly, Orbitz Worldwide have chosen to focus themselves on a multi-GDS strategy to, as mentioned earlier, provide a better quality service to their customers.  Lastly, another advantage of partnering with Amadeus, is that Orbitz Worldwide may be gaining knowledge of the European travel market.  Although Orbitz Worldwide already has their European brand, ebookers.com, it can benefit from Amadeus’ European experience and origins to increase their market penetration.  This is knowledge that both Travelport and Sabre could not possibly provide to the same quality.

As you have read, many benefits are provided to all partners, particularly to Amadeus and Orbitz Worldwide.  We won’t know how this partnership will develop, but with time we will be able to see whether Amadeus manages to improve its North American market share, and if Orbitz Worldwide manages to improve its sales with their new strategy.

Sources:

http://www.wallstreet-online.de/nachricht/6559030-orbitz-and-amadeus-enter-strategic-partnership-north-america

http://www.amadeus.com/ss/Satellite/en_US-US/Amadeus-Home/News-and-events/News/21014_Orbitz-and-Amadeus-enter-strategic-partnership/1259071352352-Page-AMAD_DetailPpal?assetid=1319585455420&assettype=PressRelease_C

http://press.orbitz.com/phoenix.zhtml?c=251693&p=irol-newsArticle&ID=1898472&highlight=

http://www.fvw.de/?event=page.index&cmp.socialbookmarks.metadata.key=128172|150&cid=12059

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