Global Distribution Systems: The Definitive Guide

Global Distribution Systems: The Definitive Guide

05 February 2021Kirsty Beasley

The global distribution system, quite unsurprisingly shortened to GDS, is an online network for companies in the travel industry. It connects travel agencies, airlines, accommodation providers, car rental companies and cruise operators in real-time, creating a seamless booking system that’s a win-win for customers and companies.

The tourism industry is increasingly using GDS for effective and joined-up reservations. The chances are, depending on your location and business mix of your hotel, you’re tapping into the GDS every day. Here’s a closer look at what’s going on behind your computer reservation system.

How global distribution systems connect the world

We promise we won’t get all techy about this – and in fact, GDS is pretty straightforward to understand. The GDS has a contract with hospitality suppliers, such as hotels and airlines, which allows them to access their reservation information and share it with service providers, typically travel agencies and tour operators.

The suppliers keep an inventory (for example, reserved and available hotel rooms or airline seats). The GDS shares its access to the inventory with the agencies and operators, giving them constant access to real-time data. When the online travel agency accepts, for example, a hotel booking, the GDS updates the system, and both hotel and agent have accurate, up-to-date information. 

Because the GDS has access to providers across the travel industry, it’s excellent at pulling together travel packages. If a customer needs flights, car rental and overnight accommodation for business travel, the OTA has access to thousands of options, which can be filtered into a neat travel itinerary. 

By making global travel so easy, the GDS system benefits everyone. The travel suppliers can reach more customers, the travel agencies have a real-time system that enables them to offer a wider service, and the traveller themselves has a seamless booking experience with greater choices.

How GDS works for hotel reservations

This connectivity is enabled by an API, an application programming interface. It’s not new tech, and that’s actually a strength as it’s a robust system. It’s simply an information-sharing system, which can access data without affecting operations. 

As an example, a guest makes a hotel reservation through Expedia’s booking system. The hotel uses a type of software called a channel manager to access the OTA (in this case Expedia)’s information, which tells it that the room has been reserved. The channel manager software is constantly checking Expedia’s API to see what bookings have been made (by constant, we mean every minute).

The channel manager also notifies any other travel management companies who list that hotel that it’s reserved that room. There’s no chance of double-booking, and the guest has had a smooth and easy travel booking experience.

It’s the same basic system for the airline industry. Few people go direct to British Airways or Lufthansa to reserve their flight: they go via a travel website who will find the best deal for the customer, while the GDS system makes sure the reservation is managed seamlessly across all platforms.

Who manages the GDS?

Back in the 1960s, American Airlines launched automated flight distribution using a mainframe computer. The massive IBM machine was housed in New York, and was connected to an astounding 1500 remote terminals across the US. To make an airline reservation, passengers visited a travel agent, who telephoned the airline. Incredibly, this system could process tens of thousands of flight reservations a day. This system was the young Sabre, the first major global distribution system.

Since Sabre, many other GDS companies have come on board, and travel service providers have a choice of who to connect with. Travelport manages Galileo (the best for Africa and the Middle East), Apollo and Worldspan. Amadeus is popular in Europe.

How does a hotel choose the right GDS? At Profitroom, we can help you out.  In brief, we’d suggest looking out for a travel distribution system that completely integrates with your existing booking engine and channel manager to keep things as simple as possible. Does it tap into the markets you want to reach? What’s its pricing policy? Does it add value with marketing and revenue management support?

Speak to the experts

If you want to know more about how global distribution systems might benefit your property, have a chat with us at Profitroom. We’re here to support you with all your hotel software needs, from e-commerce to marketing.

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