Understanding The Value Chain Dynamics

The travel distribution value chain is not fixed, it can shift, adapt, and take different routes. Distribution paths from suppliers to travelers can move forward, go backward, or even skip certain players altogether.

For example, a typical route might look like this:

This is a common and straightforward sequence. However, some routes skip steps. A travel agent, for example, might procure tickets directly from the airline, bypassing the GDS entirely.

In other cases, the chain can even move backward. A retail travel agent who handles high booking volumes on a specific route may negotiate special fares directly with an airline. These agents can then sell those seats to wholesalers, who in turn distribute them to other travel agents, before the offer finally reaches the traveler. This is an example of reverse flow within the value chain.

Ultimately, the goal for every player is simple: secure the most competitive rate, regardless of where the supplier stands in the chain. In practice, the path that delivers the lowest price and highest margin wins, even if it’s unconventional.