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Inducements Up In GDS Turf Battle.

Article Excerpt
Global distribution system providers are competing outside of their traditional geographic comfort zones, raising the overall level of inducement compensation and jockeying for position before the next rounds of negotiations with travel management companies and airlines.

GDSs assert the diversification of product and service offerings are today's differentiators. However, inducements still are an important part of the overall economic model, as they enable a relatively balanced sharing of the costs between travel suppliers and buyers.

Travelport during its second-quarter earnings call last month noted inducements paid to travel agencies and commissions paid to national distribution companies increased 2 percent. On a unit basis, inducements were up 7 percent, with one-third attributed to "unfavorable currency," according to executive vice president and CFO Mike Rescoe.

Travelport CEO Jeff Clarke added, "Most of these inducement increases are the year-over-year impact of contracts that were signed a year ago, particularly in the online...

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