Lesson 12 – Global Distribution System

12.1. Introduction

A GDS is a worldwide conduit between travel bookers and suppliers, such as hotels and other
accommodation providers. It communicates live product, price and availability data to travel
agents and online booking engines, and allows for automated transactions.

The GDS is often used to tap into the corporate travel market because it has the ability to
present hotels, flights, and car rentals in one simple interface which is convenient. Many
companies organising trips for their staff will use the GDS as their preferred booking method.

The history of global distribution systems dates back to the 1960s when a more sophisticated
method was needed to keep track of flight schedules, availability, and prices.

As early as the 1970s GDSs were some of the first companies in the world to facilitate
business to business (B2B) electronic commerce (now more commonly known as
ecommerce). Airlines realised that by automating the reservation process for travel agents,
they could make the travel agents more productive and essentially turn them into an extension
of the airline’s salesforce.

12.2. Major GDS Systems

1. Amadeus GDS
Amadeus has been operating for over 30 years, building critical solutions to help airlines,
hotels, railways, travel agencies, tour operators and more to run their business and improve
the travel experience.

Amadeus has the biggest global footprint of any of the GDSs, with a potential reach to
millions of guests. The company operates in over 190 markets and employs over 17,000
people.

2. Sabre GDS
Sabre is a leading technology and data-driven solutions provider helping airlines, hotels
and travel agencies grow their businesses and transform the traveller experience.

Sabre is seen as a pioneer for online travel agencies, corporate booking tools, revenue
management, and web and mobile itinerary tools, to name a few.

Sabre Travel Network is its global business-to-business travel marketplace and consists
primarily of the GDS and a broad set of solutions that integrate with the GDS.

This marketplace is used by travel suppliers including 400 airlines, 175,000 hotels, 200 tour
operators, 50 rail carriers, 40 car rental outlets and 17 cruise lines.

3. Galileo GDS
Galileo traces its roots back to 1971 when United Airlines created its first computerised
central reservation system. Due to the high market penetration of the Sabre and Apollo
systems, owned by American Airlines and United Airlines, respectively, Worldspan and
Galileo were created by other airline groups in an attempt to gain market share in the
computer reservation system market.

The Galileo system was moved from Denver, Colorado, to the Worldspan data centre in
Atlanta, Georgia, in 2008, following the merger of Travelport and Worldspan (although they
now share the same data centre, they continue to be run as separate systems).

4. Worldspan GDS
Worldspan is a Travelport platform, and is the technology leader in web-based travel
eCommerce, offering solutions for all facets of travel business online. As a leading GDS,
Worldspan provides travel distribution, technologies and services for thousands of travel
companies worldwide, including travel agencies, corporations, travel suppliers and travel
websites.
 Worldspan transforms global travel distribution and transaction processing with industry-
first fares, pricing, shopping and booking technologies, and a portfolio of interactive
shopping tools that enable travel companies to reduce costs, increase productivity and
build revenues.

5. Apollo GDS
As a leading GDS, Apollo provides travel distribution, technologies and services for
thousands of travel companies worldwide, including travel agencies, corporations, travel
suppliers and travel web sites.

The Apollo reservation system was used by United Airlines until 2012, when it switched to
SHARES, a system used by its former Continental Airlines subsidiary. Apollo is still used by
Galileo International (now part of Travelport GDS) travel agency customers in the United
States, Canada, Mexico, and Japan.

6. Abacus GDS
Abacus was founded in 1988 and became a leading provider of travel solutions and
services in the Asia Pacific region.

The company is headquartered in Singapore and owned by Sabre Holdings, after Sabre
acquired a full stake off 11 Asian airlines who were holding a majority share.

Abacus serves more than 100,000 travel agents across the Asia-Pacific region’s 59
markets and has both global and uniquely local relationships with airlines and hotels,
including the leading portfolio of low-cost content and Chinese airline content.

7. Pegasus GDS
Pegasus strives to remove friction and create simplicity amidst an otherwise complicated
environment. Pegasus Solutions pioneered the hospitality reservations industry.

The company is a market leader in the electronic processing, management, distribution,

sales and marketing of hotel inventory, rates and content across different sales channels to
include direct bookings via hotels’ branded websites, voice, travel agents (GDS), OTAs and
metasearch partners.

12.3. Benefits of GDS

1. The number of bookings generated through a GDS generally outpaces that of direct
bookings. While direct bookings are rising, and they do represent a significant amount of
revenue for hotel operators, there are still more bookings being generated through the GDS
than through hotel websites.
2. Hotels generate more revenue through a GDS because it places the hotel’s information,
availability and rates in prominent locations where it is easy for travel agents to find. It helps
hotels maximise their bookings during any given time period while also reaching powerful
travel markets that are willing to spend money in order to book the best room available.
3. A lot of travel agents who specialise in corporate travel use a GDS to get their clients
booked quickly and efficiently.
4. The GDS can help hotel managers uncover new market segments to promote their
products to. In many cases, hotel operators discover through the GDS that there are
traveller market segments interested in their products that they couldn’t previously reach.
5. More travel agents are relying on the GDS to find the best places for their clients to stay.
Every year, more agents are realising that this is the best way to easily connect with hotel
properties from around the world. Through the GDS, the agents have access to live rates
and availability, and they can easily book rooms for their clients.
6. When you complete your hotel description comprehensively, the GDS improves search
positioning and displays your brand messaging during the search and booking process,
which means travel agents are more easily able to source your hotel for their clients.
12.4. Maximizing GDS
1. Pooled inventory
With a GDS connection that supports pooled inventory, you can market all of your rooms to
all of your distribution channels at one time. Without this feature available, you will be
forced to separate your inventory based on the distribution channel, which can prevent you
from maximising your bookings and increasing your revenue.

2. Commission-free structure
Your GDS should help you maximise your bookings and increase your revenue, not deplete
you of the revenue you should be earning per booking. Do not choose a partner that forces
you to pay a commission fee simply for delivering the booking to your hotel’s property
management system (PMS).

3. 3. Integration capabilities
It’s imperative you have the capability for the GDS to integrate completely with your existing
PMS, online booking engine and channel manager. This simplifies the process for you and
allows you to effectively implement and manage your distribution strategy.

4. 4. Comprehensive reporting
Your GDS software should help you make the best decisions regarding your marketing
strategy and distribution plan. Select a provider that offers comprehensive reporting tools
that allow you to view and evaluate your booking data.

5. 5. Ability to target specific markets

A GDS gives you the opportunity to discover and tap into the most powerful and motivated
market segments. You should be able to filter your access based on the geographical
location and also specific types of travellers.

6. 6. No lengthy contracts
Look for a provider that allows you to trial the GDS for a short time and measure results
before continuing your subscription.

7. 7. Simple and affordable connection

Each GDS has its own set of connection fees and requirements to sign up. By using the
right provider, you eliminate the frustration of signing up with each individual platform, and
you can connect to all of the top providers without paying the individual fees.

12.5. Trends Using GDS Systems

1. The cruise industry is booming
The cruise market is definitely expanding, with global revenue now at $40 billion. Every
harbour city in the world has a cruise ship docked outside and with everything from super
cruises to niche adventure cruises, travellers are finding them a more accessible form of
holiday.

It appears travel agents are driving most of this success, with 70% of cruise bookings made
via this channel. Travel agents offer expertise, advice, and personal service; which is
needed for cruise passengers.

2. Why it’s relevant to hotels

Hotels are essentially able to share in some of the same customers cruises attract because
of the ‘cruise-and-stay’ phenomenon. Cruises do all the hard work to book their guests but
often they will arrive a day or two early or depart a day or two after their cruise, booking at
hotels for the extra time. This almost acts as a double-holiday for travellers who want to
spend some more time on land exploring new cities.

3. Using a GDS to make your hotel visible

Because cruise travellers rely heavily on travel agents for their trip arrangements, it’s highly
likely any hotel bookings will also be made through this channel. Hotels need to be on
travel agents’ radars if they want to drive extra bookings.

5.