What are Global Distribution Systems and how does GDS raise occupancy?
We’re writing this blog post to answer a question that we commonly hear from clients in the hospitality industry — what are Global Distribution Systems (GDS) and how can they help me?
Simply put, GDS is a distribution channel that hotels connect with to allow their guests to book reservations through a massive network of human travel agents.
Ok, so you’re probably thinking: “But I’m already on Expedia and Booking.com — why would I pay for GDS Connectivity?”
There are a few reasons that GDS is important to the long-term success of anyone in the travel industry.
Long lineage, exclusive access to tens of thousands of guests
Major GDSs have been around since the 1970s — Amadeus, Galileo, Sabre, Worldspan & Dhisco (formerly Pegasus) — and over the years, they have built databases that include tens of thousands of frequent travellers. There is absolutely no other method for connecting with this specific, and extremely profitable, portion of the travel market.
Get Travel Agencies to sell your accommodations for you
Finding prospective guests is challenging enough, getting them to actually book with you can be exhausting. You can think of GDS like this: by connecting to this massive network (we’re talking thousands) of travel agents, you’re actually hiring human travel agents to sell your accommodations for you, with little to no effort on your part.
GDSs are still fast-growing market segments (even among millenials)
It’s true, the future of GDS is as bright as ever. Major GDS businesses are increasing quarterly revenue and bookings.
Amadeus reported a revenue increase of 4.6% over the first nine months of 2018, representing EUR 3,683.8 million, while Sabre reported a 7.7% increase in quarterly bookings over the same period.
In a recent article on HotelMarketing.com, it was stated that: “According to TravelClick’s North American Distribution Review, in the fourth quarter of 2018, rooms sold through both GDS and Brand.com channels were up 6.4 percent and 2.0 percent, respectively, over the same time last year.”
This outstanding growth occurred in the wake of negative impacts from fluctuating USD and EUR exchange rates, meaning as the economy improves, so will the potential of GDS partners.
But how is this old model still so profitable, you ask? Think about it — business travel, vacation packages, and a massive amount of millenials taking multi-destination travelling expeditions are all turning to human travel agents for the ease and simplicity of booking.
So ask yourself, can your independent hotel afford to miss out?
Let us know if you’re ready to talk about GDS connectivity. With OnRes, updating rates & inventory across your entire network of GDS connections is as simple as clicking a button, just like any of our other channel management solutions.
Don’t wait any longer to increase your occupancy rates. It’s time for hotel managers to take a closer look at GDS.
To learn more about GDS and to find out how it helps you raise occupancy, even in shoulder seasons, check out our Hospitality Masters podcast episode, XYZ.