The high costs of old fashioned `legacy` systems are preventing tour operators in countries throughout the world taking advantage of…
The high costs of old fashioned `legacy` systems are preventing tour operators in countries throughout the world taking advantage of savings now on offer, according to Mach Associates.
The situation is made even worse, according to the UK-based systems supplier, because many companies feel they are locked in to the legacy suppliers and cannot take the risk of changing to more up to date and cost effect technology.
Neither do many of them realise that they are not limited to locally produced systems. By using high speed low cost Internet connections, travel companies can make use of servers in any location to get the best value reservation system for their needs.
At the same time smaller companies believe they cannot move into new areas of sales, such as dynamic packaging, because the outlay and maintenance costs will be prohibitive.
Said Mach Associates Sales Director Richard Bristow: “This is a global problem. The fact is that, just as with home PCs, the cost of the latest technology is considerably lower now than it was a few years ago and is thus cost effective for much smaller companies. The legacy systems were designed in the 1980s which, in computer terms is like running a classic car, including the high on-going maintenance costs.”
The result is that tour operators could be paying 15 times as much for a system as they need to. In the UK, for example, a typical legacy system will cost around £150,000 (€219,266, US$ 282, 458) to install and implement. Mach`s MARS reservation system, for example, costs just 15% of that figure. Not 15% less, but literally 15% of the costs of a legacy system. It can also be used anywhere in the world because all connections to the MARS server are via a local Internet service.
A good example of the high costs charged by legacy suppliers are those for all-important management reports, which can be £2,000 – £4,000 (€2,923 -€4,847, US$ 3,766 – 7,532) per report. The MARS system, on the other hand includes ten free management reports, and extra ones cost around a tenth of legacy price.
Further savings can be made with systems such as Mach`s ERS Connect suite. This replaces the expensive standard connections to GDSs and similar booking systems with a low cost Internet link to its MARS reservation system.
ERS Connect will also save money on connections to Jumpstart, Cendent Travel Services hotel booking service, and Eurotunnel bookings, also made through Unicorn.
The level of investment required to maintain a legacy system was taken up at a recent meeting of the Travel Technology Initiative in the UK where ex-head of major UK Travel group, My Travel, Steve Endacott recalled the high prices he was required to pay for maintaining and developing the well known legacy system he used at that time.
The latest MARS package is the only tour operators` reservations system that is 100% designed to work with Microsoft .net and Web Services. Any part of an operator`s Web site can thus be linked to MARS, allowing them to sell or package individual product components, without or without allocation.
Mach Associates believes it is important for tour operators to become Internet-enabled as new figures covering European sales, for example show Online travel sales increased by as much as 40% from 2003 to 2004 and reached EUR 17.6 billion in the European market in 2004 – or 7.3% of the market (up from EUR 12.6 bn. or 5.3% in 2003). A further increase of about 26% during 2005 to about EUR 22.2 billion may be expected (9.1% of the market). The European online travel market could reach EUR 26.9 bn. or 10.8% of the market by 2006. The UK accounted for 37% of the European online travel market in 2004, with Germany in second place at 20%.
Mach Associates was the first company to launch an entirely Internet-based reservations system in the UK, and now offers clients a full range of services including full product support, training, software development, web site design, content management systems, and a mailing service.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
