Learn how the Travel and Hospitality Industry works and discover the top investment opportunities in travel technology.

1. Brazilian Software Market for
Travel and Hospitality Industry
Felipe Perlino
August 2012

2. Summary
• Travel services distribution is a billionaire market and fraught with
intermediaries
• Despite selling through indirect distributors is considerably
expensive to Service Providers, it is vital to avoid empty inventory
• (E.g.: empty seats on airplanes and empty rooms in hotels)
• However, small and medium Brazilian Travel Service Providers are
still excluded from modern distribution systems
• Thus, there are huge opportunities for new businesses capable to
include these players in the distribution systems
• There are also similar opportunities for ventures capable to promote
disintermediation in the Travel distribution chain¹
1. In order to reduce distribution costs.

3. Who the players are
Distribution Chain Simplified
Services Distribution
Customers
Providers Channels
Wholesalers Retailers
Tour Operator Travel Agency
Flight On-line Travel
Consolidator¹ Agency (OTA’s)
1. Peculiarity from Brazil and some other countries. It was born to serve Travel Agents Long Tail, but it have been transforming itself.

4. Service providers analysis
Who are them and what is the opportunity size in Brazil?
Served by • Airline Carriers
Dist. Channels
(Level) • Hostels • Bus Carriers
• Car Rental Suppliers • Hotels
• Travel Insurances • Pousadas (B&B)
• Chalets • Restaurants, Bars
and Nightlife
• Tour Attractions
• Non-formal Private
Accommodations
• Currency Exchange
• Shuttles
• Motels
• Campsites
• Train Carriers
.
Market Size

5. Distribution chain overview¹
Wholesalers Retailers
Services
Providers
Tour Operator Travel Agency
• Air Carriers
• Hotels
• Pousadas
• Bus Carriers
• Car Rental Suppliers
Flight On-line Travel
• Tour Attractions Consolidator Agency
• Chalets
• Hostels
• Restaurants, bars
and Nightlife
• Non-formal Private
Customer
Accommodations
• Travel Insurances
• Currency Exchange
• Shuttles
Companies
• Motels
• Campsites
• Train Carriers
1st Connection
2nd Connection
3rd Connection
1. This is a simplification. The distribution chain can be much more complex, with multiple connections, specially when abroad players are involved.

6. Group growth tendency
Wholesalers Retailers
Services
Providers
Tour Operator Travel Agency
• Air Carriers
• Hotels
• Pousadas
• Bus Carriers
Flight On-line Travel
•
•
Car Rental Suppliers
Tour Attractions Consolidator ? Agency
• Chalets
• Hostels
• Restaurants, bars
and Nightlife
• Non-formal Private
Customer
Accommodations
• Travel Insurances
• Currency Exchange
• Shuttles
Companies
• Motels
• Campsites
• Train Carriers

7. Industry’s software solutions
There are two main types of systems
• 1) Internal control: Every players has its own “back office”
system
• E.g.: Hotels > Hotel “Property Management System” (PMS)
• 2) Connection between players: Systems that empowers
digital sales and makes inventory control, among others
• E.g.: Central Reservation System (CRS)
• Usually these systems pack many modules
• PMS uses to pack hotel management, ERP and CRM
• CRS uses to bundle Channel Management and Booking Engine,
besides the CRS

8. Diving into industry’s systems
Wholesalers Retailers
Services
Tour Op. WS
Providers Travel Ag. WS
Tour Operator Travel Agency
• Air Carriers
• Hotels Tour Op. BO Travel Ag. BO
• Pousadas
Airline Software
• Bus Carriers OTA WS
•PMS Rental Suppliers
Car
Flight On-line Travel
Car Tour Attractions
Rental Sofware Consolidator Consol. WS Agency
•
•Other “Back Offices”
Chalets Consol. BO OTA BO
• Hostels
• Restaurants, bars
and Nightlife
• Non-formal Private
Customer
Accommodations
• Travel Insurances Global Distribution System (GDS)
• Currency Exchange
Central Reservation System (CRS)
• Shuttles
Web Service Reservation System¹ Companies
• Motels
• Campsites Corporate
• Train Carriers Travel Software
Back Office Connection
1. “BO”: Back Office.
2. The Booking Engine is a requirement from this kind of system.
3. “WS”: Web Service.

9. Systems that reach travel agencies
• Although Physical Travel Agencies have been loosing market
share, they are still enormously relevant for tourism distribution
Gol WS
Factors to be chosen (in order)¹
Tam WS Azul WS
1. Request availability and price for Consumer
Airline 2. Commission offered and Operator’s service
Carrier WS 3. Credit offered for Travel Agent
Amadeus
CMNet
Sabre
GDS CRS
Worldspan Cangooroo
Travel
Agency
CVC WS GapNet WS
Tour Consolidator
Operator WS WS
Flytour WS Rextur ReservaFacil
1. Despite this is the major tendency, sometimes it may vary.

10. Top investment opportunities
According to previous information, the most prominent targets
for an investment in Brazilian travel systems are:
What the business should promote Which players should be able to face it
Reduce distribution costs for Services Providers,
Booking Engine, OTA, CRS* or Consolidator
reducing intermediaries
Empower Services Providers to participate on
Booking Engine, OTA, CRS*, Consolidator or GDS
the electronic distribution network
Offer BRA Services Providers in electronic
OTA, CRS*, Consolidator or GDS
distribution network abroad
Monetize Non-formal Private Accommodations Airbnb similar: unlikely to happen
Approach Restaurants, Bars and Night Clubs
OTA, CRS* or Consolidator
from tourism distribution channels
Offer a single environment for Travel Agencies,
Consolidator
dismissing the need of multiple systems
* Including bundled products.

11. Leave your comments
Do you have any comment or further information about this
subject?
• Leave them here and contribute with the development of this
sector
Thanks!
Felipe Perlino