The study claims that a ‘substantial’ increase in advertising costs combined with a reduction in GDS booking fees and less agent commission, as well as the cost of the customer service incurred by direct bookings make the difference between direct and indirect distribution costs “much smaller” than airlines contend. The report, which was commissioned by the European Federation of Travel Agents’ and Tour Operators’ Associations (ECTAA) and the European Technology & Travel Services Association (ETTSA), says that airlines’ estimation of third-party distribution costs is wrong, finding that a direct booking costs €12.56 versus €14.21 for indirect purchases. However, the report’s authors argue that carriers aren’t taking ‘customer acquisition’ into account when calculating the cost of a direct booking, closing that gap significantly. Ian Lowden, author of the study, says: “When taking into account advertising, marketing, customer support and payments fees, as well as the significant costs of online customer acquisition such as search engine fees, the costs of ‘direct’ bookings and those made through online and offline travel agencies is equivalent. Airlines seeking to justify a move to less transparent direct distribution schemes often omit from consideration these important – and unavoidable – costs.” Get the full story at Buying Business Travel