GDS System: Top Reasons Why It is Important to the Travel Industry

Even though Global Distribution Systems (GDS) has been prevalent since their inception around the 1960s, they are not as equally understood or utilized in today’s travel industry. GDS was at the forefront of the digital revolution in the travel market, producing a way for brick-and-mortar travel agencies to instantly connect with accommodation providers.

Additional internet solutions, such as channel managers and online travel agencies (OTA), have surged in popularity as of late, but it is important to note that GDS is still a working and viable option for hotels today. But before we dig into the details of the benefits of using GDS, let’s make sure that we get on the same page.

What is GDS?

Quite simply, it is a selling channel for travel agencies, airlines, hotels, and car rental providers. A great way to visualize how this system works is by imagining a conduit; a GDS takes a request from an agency and matches it with options that could potentially work best. The four main GDSs include Amadeus, Galileo, Sabre, and Worldspan. Businesses have the option to “subscribe” or have access to one of them or even all of them. There are some smaller GDS that focus primarily on a regional area as well as GDS that target a certain market in order to offer specialized services.

As the industry has developed and new technologies have emerged, GDSs have become more sophisticated in order to keep up with the market’s expectations. However, since they are not the latest or most contemporary digital solutions in the travel industry, it is not surprising that the potential of GDS has yet to be unlocked for some businesses. Even though GDSs have been referred to as legacies in the travel industry, they are still relevant and highly engaged in the travel market.

Advantages Of Global Distribution System

1. “Offline” as well as Online

GDS was originally made in order to simplify and streamline the reservation process, making booking easier, as well as more time-efficient, for travel agencies located around the world. OTAs were not an option yet, so GDS was the only resource for connecting with travel industry providers and companies online for quite some time.

In other words, GDS considers what OTAs do not: those who are not “online,” or the brick-and-mortar travel agencies that are not completely housed online. GDS offers a way to contact and include agencies that would not normally be easily found through third-party distribution channels. Therefore, with the added advantage of OTAs and channel managers in today’s society, GDS takes into account the travel agencies that do not actively participate online, opening up more opportunities for you to consider.

2. Great for Promotional Campaigns

The Marketing Information Data Transfer (MIDT), a resource that most OTAs refer to for current information on guest travel behavior, is based on GDS. MIDT mainly looks at the data that GDS brings in, and it presents this information for travel industry companies to analyze. Since GDS is not only concerned with hotels or airlines separately, anyone who has access to the data that GDS collects will know far more information about guests than the hotel reservation they made. Travel plans, airline bookings, car rental packages—whatever decision a customer makes and adds to their travel persona is information that you can use to personalize your promotional campaigns.

3. It Costs Less Than Marketing

Although there is an initial expense for building up a global distribution system for a hotel, it is likely to be significantly less than the marketing expenses that a hotel chain would require to engage in to see the same rise in reservations.

Instead of incurring the money and time commitment of developing a new marketing strategy, a hotel or restaurant may gain quick access to a larger portion of the travel reservation market by partnering with a global distribution system to reach more travel companies.

4. It Helps Streamline the Booking Process

In addition to increasing visibility to more clients simultaneously while making room bookings, these solutions enable hospitality personnel to eliminate some of the operational burdens associated with reservations.

Because your property has fast access to bookings and reservations made online, they are simply alerted when a reservation is complete rather than being required to accept them manually. This implies that in order to collect new bookings, a hotel does not need to grow its reservation intake workforce.

5. Another Avenue to Pursue

GDS are an effective and established option for those in the travel industry; why turn down an opportunity to reach more potential customers? As of 2018 , GDS is still offering competitive results; the distribution share per channel data reveals that GDS performs almost just as well as OTAs. This in and of itself is enough of a reason to add GDS to your list of channels to promote your hotel.

In the ever-changing, instant updating world of the travel industry, GDS has proven to consistently keep up with and automatically update information as it changes. Its design allows for a more comprehensive view of the options available, letting more agencies book your hotel and your services. GDS is also more corporate-minded, meaning that they are able to view more prospects as they are not focused mainly on the customer-side of things.

6. Global Reach

Global reach is a significant advantage of Global Distribution Systems (GDS), enabling travel agencies to connect with service providers worldwide. By accessing an extensive network of airlines, hotels, car rental companies, and other travel-related services, GDS allows agencies to offer clients a vast array of travel options regardless of their location. 

This expansive connectivity helps agencies cater to international travelers, providing seamless booking experiences across different regions. Additionally, GDS platforms facilitate partnerships and collaborations between travel businesses globally, enhancing market presence and competitiveness. The ability to tap into global markets also allows agencies to meet diverse customer preferences and demands effectively.

7. Extensive Inventory Access

Extensive inventory access is a significant advantage of Global Distribution Systems (GDS), providing travel agencies with a comprehensive range of travel options from various suppliers. This includes airlines, hotels, car rental companies, and cruise lines, all within a single platform. 

By consolidating multiple service providers, GDS allows agents to compare prices, availability, and services in real-time, ensuring they can offer the best possible options to their clients. This broad access not only enhances the agency's ability to meet diverse customer needs but also simplifies the booking process, making it more efficient and time-saving for both agents and travelers.

8. Integration Capabilities

Global Distribution Systems (GDS) offer robust integration capabilities that enhance travel agencies' and service providers' operational efficiency. These systems can seamlessly integrate with various travel management systems, customer relationship management (CRM) software, and financial platforms. This integration allows for streamlined workflows, reducing manual data entry and minimizing errors. 

Agencies can manage bookings, customer data, and financial transactions from a single interface, improving overall productivity. Additionally, GDS integration supports automated updates and synchronization of inventory and pricing across multiple platforms, ensuring consistency and real-time accuracy. This interoperability ultimately enhances the service quality and operational agility of travel businesses.

9. Data and Analytics

Data analytics in Global Distribution Systems (GDS) play a crucial role in enhancing the efficiency and effectiveness of travel agencies and service providers. By leveraging extensive data on booking patterns, customer preferences, pricing trends, and market demands, GDS platforms enable stakeholders to make informed decisions. 

Travel agencies can use analytics to identify high-demand routes, optimize inventory management, and tailor marketing strategies to target specific customer segments. Service providers, such as airlines and hotels, can adjust their pricing strategies dynamically, manage yield, and enhance revenue management. 

Additionally, data analytics help in monitoring performance, identifying operational bottlenecks, and forecasting future trends. This data-driven approach empowers the travel industry to deliver personalized services, improve customer satisfaction, and gain a competitive edge.

Cost of Global Distribution System

The cost of using a Global Distribution System (GDS) varies widely depending on several factors, including the GDS provider, the scale of usage, and the specific services required. Generally, costs can be categorized into the following components:

Subscription Fees: Some GDS providers charge a monthly or annual subscription fee for access to their system.

Transaction Fees: Fees are often charged per transaction, which could include bookings, cancellations, or modifications. These fees can vary based on the type of service (e.g., flights, hotels, car rentals).

Setup and Integration Costs: There may be initial costs for setting up and integrating the GDS with existing systems or custom software.

Training Costs: Some GDS providers charge for training travel agents and staff on how to use the system effectively.

Service and Support Fees: Additional costs might be incurred for customer support, maintenance, and any specialized services required.

Commission Fees: For travel agencies, there might be commission-related costs associated with the services booked through the GDS.

Overall, the total cost can range from a few hundred to several thousand dollars annually, depending on the volume of transactions and the specific agreements made with the GDS provider.

Meanwhile, a number of the major distribution systems are capable of complete integration with the property-management system, which aids in the administration of your property’s daily operational duties. "https://s3.us-west-2.amazonaws.com/www.bookingninjas.com/img/GDS1.jpeg"

Hotels that have robust PMS integration may automate the processes involved with accepting reservations without having to handle separate components such as the employee availability, room cleaning schedule, existing booking and availability details, activity calendars, and supply levels.

A channel management platform aids in the transmission of real-time information from the hotel's property management system to the distribution system, ensuring that travel agencies have the most up-to-date information on room prices and availability.

Features of Global Distribution System 

• Global Distribution Systems (GDS) offer a wide array of features designed to facilitate efficient travel booking and management. Here's a comprehensive list of GDS features:
• The most recent and technically proficient automated products.
• Instant seat confirmation is available.
• Coordinated real-time flight data.
• Secure client information.
• A low-cost solution.
• Break-even point graphs that adapt.
• Quick installation and access.
• A perfect representation of cost-volume-profit (CPV) connections.
• Accurate analysis reports.
• Real-Time Inventory Access
• Reservation Management
• Multi-Source Content
• Fare Comparison
• Availability Display
• Pricing Engine
• Ancillary Services Booking
• E-ticketing
• PNR Creation and Management
• User-Friendly Interface
• Integration with Travel Management Systems
• Reporting and Analytics
• Customer Profiles
• Loyalty Program Integration
• Payment Processing
• Commission Management
• Multi-Currency Support
• Language Support
• Promotional Fare Display
• Queue Management
• Alert and Notification System
• Advanced Search Filters
• Group Bookings
• Travel Packages
• API Integration
• Mobile Compatibility
• Customer Support Tools
• Supplier Management
• Security Features
• Virtual Interlining
• Corporate Travel Management
• Discount and Voucher Management
• Feedback and Review System
• Route Maps and Travel Guides
• AI and Machine Learning
• Sustainability Metrics
• Customizable Dashboards
• Virtual Assistance
• Partnerships and Alliances
• Training and Support

Types of GDS System 

There are currently four major GDS systems:

Travel Port: 

Travelport operates several GDS systems under different brand names. Galileo is popular in Europe, Apollo in North America, and Worldspan in various regions. Travelport provides extensive travel content and technology solutions.

Amadeus :

Amadeus, the latest of the four GDS providers, was established in 1987 by Air France, Iberia, Lufthansa, and SAS. Amadeus is an international distribution system and technology supplier that serves the marketing, branding, sales, and distribution demands of the travel and tourist sectors throughout the world.

Its extensive data system and database, which are some of the biggest in Europe, service over 57,000 travel company locations and over 10,500 airline dealerships in over 200 markets globally.

In addition, the system may give access to around 58,000 hotels and 50 vehicle rental firms covering approximately 24,000 sites, as well as other provider groupings such as insurance, ferry, cruise, train, and tour operators.

Galileo International: 

In 1993, 11 major North American and European airlines formed Galileo International: Air Canada, Aer Lingus, British Airways, Alitalia, Austrian Airlines, and KLM. SwissAir, Olympic Airlines, United Airlines, TAP Air Portugal, and US Airways are among the carriers.

It is a prominent participant in the global GDS market, with operations in Europe, North America, Africa, the Middle East, and the Asia/Pacific area. Galileo International is a global technology leader with a diverse portfolio.

Its main line of business is to provide electronic international distribution services to the travel sector via computerized reservation systems, cutting-edge products, and creative web-based solutions.

Galileo is a significant travel inventory distributor committed to serving travel agencies and corporate customers and, via them, enhancing traveler choice.

Sabre :

Sabre has been producing breakthroughs and improving the travel industry for over 40 years. Sabre Technology has evolved throughout the world and touched all parts of the travel sector.

From the initial Sabre computer bookings system in the 1960s to sophisticated airline yield management solutions in the 1980s to top travel websites today. Sabre formed a distinct legal entity as American Airlines' parent company in July 1996, followed by a robust first public offering in October in which AMR produced about 18% of its shares to be traded publicly.

Sabre, which is active in 45 different countries, is a prominent supplier of travel technology, offering innovative technologies that allow travel commerce and improves airline/supplier activities.

WorldSpan :

Worldspan was founded on February 7, 1990, by affiliates of Northwest Airlines, Delta Air Lines, Inc., and Trans World Airlines, Inc.

Delta Air Lines, Inc. (with 40% ownership), Northwest Airlines (with 34% ownership), and American Airlines, Inc. (with 26% ownership), are the current owners.

Worldspan has effectively established the strategies, ideas, and resources to assure the company's ultimate achievement in the new internet era of travel distribution since its 1995 venture into the space of Internet technology for the travel business.

Worldspan supplies travel agencies and service providers, with global electronic distribution of information, online products, and e-commerce capabilities. In approximately 90 nations and territories, Worldspan now services 20,021 travel agents.

Worldspan, headquartered in Atlanta, Georgia, links 421 airlines, 210 hotels, 40 vehicle rental firms, 39 tour, and holiday agencies, and 44 special travel service providers.

Note: There are also various smaller or local GDSs that serve various interests, areas, or nations, such asInfini (Japan),Tapas (Korea), SITA's Sahara, Axess (Japan), and Abacus (Asia/Pacific), and Fantasia (South Pacific).

What is the future of GDS?

Depending on what you read or who you talk to in the travel industry, GDS may or may not be considered a resource that will last as new technologies are developed. While GDS could be labeled as more “traditional,” it still seems to get the job done quickly and effectively. With property management systems like Booking Ninjas, , you should easily be able to integrate all of your booking information into any, if not all, of the GDS that you want. If GDS continues to take every opportunity to update and upgrade itself, then it will stay as a viable option for some time.

Apollo: 

Apollo is a Global Distribution System (GDS) primarily used in North America, offering a comprehensive travel booking platform. Part of the Travelport portfolio, Apollo facilitates transactions between travel service providers and travel agencies, streamlining the booking process for flights, hotels, car rentals, and other travel-related services. 

Renowned for its reliability and extensive network, Apollo helps travel agencies access a vast inventory of travel options, enhancing their ability to serve clients efficiently. The system's robust technology supports seamless integration with various travel agency systems, enabling real-time availability and pricing information. 

Apollo's user-friendly interface and advanced features make it a preferred choice for many travel professionals, contributing to its strong presence in the travel industry. By providing a centralized platform for managing bookings and reservations, Apollo helps optimize operational efficiency and improve customer service, making it a vital tool in the travel industry's distribution network.

Final Thoughts 

In conclusion, Global Distribution Systems (GDS) are indispensable to the travel industry, driving efficiency and connectivity across the sector. By providing real-time access to a vast inventory of travel services, GDS platforms streamline booking processes and enhance operational effectiveness for travel agencies and service providers. 

Their capabilities in fare comparison, multi-source content integration, and advanced data analytics empower stakeholders to make informed decisions, optimize revenue, and deliver personalized travel experiences. 

Additionally, GDS systems support global reach, improve customer satisfaction, and facilitate seamless transactions through advanced features and secure platforms. As the travel industry continues to evolve, the role of GDS remains crucial in supporting dynamic market demands and ensuring a smooth, efficient travel booking ecosystem.

To learn more about GDS and how softwares can help with your productivity and profitability, schedule a call with us right now!