The growing influence of direct sales and demand for lower distribution costs has prompted Travelport and Worldspan to agree a merger.
The two firms today announced they had reached an agreement to merge Wordspan into a subsidiary of Travelport, a conglomerate that includes the global distribution system Galileo, Orbitz online retailer and Gulliver’s Travel Associates wholesaler.
Jeff Clarke, chief executive officer of Travelport, said: “Increasing cost pressures on travel suppliers and agencies combined with the strengthening of alternative distribution channels, such as supplier direct channels, continue to influence how travel is purchased.
“This merger will create a more effective and efficient travel distribution provider and will ensure that we are better positioned to meet the evolving needs of our customers, the travel suppliers, travel agencies and end consumers.”
Increased competition in the travel distribution sector is behind the decision to merge with both firms pointing to latest Forrester Research that shows more than half of all travel bookings in the US come through non-GDS channels.
Worldspan chairman and chief executive Rakesh Gangwal said: “This merger builds upon the complimentary strengths of out two companies, which will benefit existing and future customers, allowing them to address an increasingly competitive marketplace.
“The combination of Travelport and Worldspan directly addresses industry trends and will provide a new standard of technology, high quality content and world-class customer service.”