What Is A Global Distribution System (GDS) & Which Hotels Benefit Most From It?

There is so much jargon used in the travel industry, it can be difficult to know your PMS from your OTA! We’re on a mission to try and break down all the acronyms and abbreviations to help people who are new to the hospitality industry understand what they all stand for and how the various systems are used. So what is a global distribution system and which hotel types will benefit the most from using it?

GDS Meaning: What Is GDS In The Hotel Industry?

In the hotel industry, GDS stands for Global Distribution System. GDS is a computerised network that enables travel agencies and other distribution partners to access real-time information about hotel rooms, rates, availability, and other travel-related services. It is a critical tool for the travel industry as it facilitates the distribution and booking of hotel rooms and other travel products to a wide range of customers, including travel agents, corporate travel departments, and online travel agencies (OTAs).

GDS Systems You Might Hear About

There are really only 3 major GDS systems that you will likely hear about. Each one offers slightly different features and functionality, integration options and access to different types of hotel inventory. The 3 main players are:

1. Sabre: Sabre is one of the largest GDS providers globally, serving a wide range of travel-related industries, including hotels. It offers a comprehensive suite of solutions for hoteliers to distribute their rooms to travel agencies and OTAs.
2. Amadeus: Amadeus is another major player in the GDS space. It provides hotel distribution services along with airline and other travel-related solutions, allowing hotels to reach a global network of travel professionals and customers.
3. Travelport: Travelport is known for its GDS services and travel commerce platforms. It connects hotels with travel agents, corporations, and OTAs, enabling efficient distribution and reservation of rooms.

What Is The Difference Between GDS and OTA?

The main difference between a GDS and an OTA is that the end user of GDS systems is travel agents, the corporate travel market and travel professionals rather than the general public. OTAs are accessible by anyone looking to book a whole range of travel services including accommodation, flights, travel packages, car rentals, tours and activities. A global distribution system can however send its inventory to an Online Travel Agency.

How Does A GDS Travel System Work?

So just how does a GDS Travel System work? Much like the process with OTAs, your hotel’s PMS software (property management system) will connect to the GDS via a channel manager. The hotel’s live rates and inventory are sent directly to the GDS and other online booking channels. When bookings are made, the hotel’s availability will be changed instantly across all channels that it is advertised on to prevent overbookings. The GDA is effectively a middle man linking a travel agent with a hotel’s reservation system, sometimes known as the CRS (Central Reservation System). The key features and benefits of a GDS travel system include:

1. Inventory Management: Hotels and other travel providers connect their inventory (e.g., rooms, rates, amenities) to the GDS. They provide real-time updates on availability and pricing.
2. Access by Travel Agents: Travel agents, both online and traditional brick-and-mortar agencies, use GDS platforms to search for and book hotel rooms and other travel services for their customers. They can access a wide range of options from various suppliers in one place.
3. Real-Time Information: GDS systems provide up-to-date information, including room availability, pricing, and restrictions. This allows travel agents to make informed booking decisions.
4. Reservation Processing: When a travel agent makes a booking through the GDS, the system processes the reservation and provides a confirmation to the agent and the traveller.
5. Payment and Reporting: GDS platforms often handle payment processing and generate reports for travel agencies and hotels. This streamlines the billing and reconciliation process.

Which Hotel Types Benefit The Most From A Global Distribution System?

Given that GDS Systems are primarily used by travel agents and corporate travel bookers, the decision on whether it is a good strategy to list your hotel on a global distribution system will come down to who you are targeting. If you are looking to attract a more corporate, professional traveller, this may be difficult to target with your website alone or via the OTAs. A GDS connection would make sense in this scenario. So the main hotel types that will benefit from adding a GDS include:

1. Chain Hotels: Large hotel chains with properties in multiple locations often rely heavily on GDS to manage distribution across their portfolio.
2. Business and Corporate Hotels: Hotels located in business districts or near convention centres benefit from GDS because corporate travellers often book through travel agencies.
3. Boutique and Independent Hotels: Smaller and independent hotels can gain wider exposure by listing their properties on GDS, helping them reach a broader audience.

What Are The Main Benefits of a GDS Travel System For Hoteliers?

As we’ve highlighted, if you’re targeting markets that may be otherwise difficult to reach, for example the international corporate travel market, a GDS can offer great benefits for hoteliers. The other key benefits include:

1. Increased Visibility: GDS platforms provide access to a vast network of travel agents and corporate clients, expanding a hotel’s reach and exposure, particularly among the more ‘difficult-to-reach’ and potentially higher paying segments.
2. Real-Time Updates: Hotels can update room availability and rates in real-time, ensuring accurate information is available to potential guests.
3. Streamlined Distribution: GDS simplifies the distribution process, reducing the need for direct negotiations with numerous travel agencies.
4. Negotiated Rates: A hotel can list negotiated rates that are different to their public rates. These rates are only accessible to authorised agencies such as corporate bookers.
5. Efficient Booking Process: Travel agents can quickly search, compare, and book rooms, making the booking process more efficient.
6. Global Reach: GDS platforms have a global presence, helping hotels attract international travellers.
7. Centralised Management: Hotels can manage their inventory and pricing from a single platform, making it easier to control distribution.
8. Reporting and Analytics: GDS systems often provide detailed reports and analytics, helping hotels make data-driven decisions.

In summary, Global Distribution Systems play a crucial role in the hotel industry by connecting hotels with travel agents and helping them efficiently distribute their inventory to a wide range of customers.

Ideally your channel manager software should enable you to connect with all these online distribution channels and update your property’s availability and rates in real time. You should be looking to maximise your booking revenue potential by connecting to the entire booking ecosystem.

Investing in the right property management software (PMS) will ensure that you are able to manage your booking with ease across all of the online marketing channels including GDS systems.

At HiRUM we pride ourselves on industry leading PMS software being able to connect you with all the major travel meta search engines and OTAs as well as the leading GDS channels. Whatever your size and whatever your budget, we can help you find the right solution for your property.

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