What Is GDS (Global Distribution System) and How Does It Help Hotels?

With the wide range of new tools and channels available, it’s tempting to move away from some of the older ones. For instance, you might think that, given the rise of OTAs and other third-party channels, you may no longer need to use a hotel global distribution system (GDS). While it’s understandable to be on the fence here, the truth is that a GDS delivers critical capabilities not available through any other channel. What are those benefits? We’ll explore what you need to know in this post.

What Is a GDS?

Before we explore the benefits offered, let’s first define what a global distribution system is when it comes to hotels. A GDS system is pretty much what it sounds like – a worldwide connection between travel bookers and accommodation providers. It’s a tool that allows travel agencies, travel agents, and other professionals in the industry to access live prices and availability. It also works with online booing engines and can make it possible to automate transactions.

GDS software has been in use for decades. The idea dates back to the 1970s, although they have evolved a great deal over time. Some of the remaining GDSs include Galileo, Sabre, Amadeus, and Worldspan, although there are newer options out there, too.

Put another way, a GDS system passes on your hotel’s information (room rates, availability, etc.) to intermediaries like travel professionals, who work with consumers as well as corporations and other organizations. It’s an invaluable tool because it does precisely what you need most: it boosts visibility.

The Benefits of a GDS for Your Hotel

Now that you know a bit more about what a GDS for hotels is, it’s time to delve into the benefits on offer. We’ve hinted at some of them already, but we’ll break things down to be much clearer.

Better Access to Travel Agents

Today, many people rely on consumers booking their own flights and other travel arrangements. While that’s common, many people still rely on travel agents and agencies. If you’re not using a GDS, that means your hotel’s information isn’t available to those agencies/agents and, by extension, to the consumers they represent. You’ll find travel agents used by many different people, although they’re more commonly used by affluent travelers. Millennials also value the expertise and guidance of travel agents. International travelers from countries outside the US where Internet access is not as widely available are also more likely to use travel agents to book hotel rooms and other accommodations.

Corporate Bookings and Guaranteed Contractual Rate

Another benefit here is the ability to benefit from corporate bookings and the contractual rate that every company has with hotels. Corporate rates can be higher than consumer-facing rates, and each company is contractually obligated to pay a set rate to the hotels that partner with the GDS. With the world once more opening up after COVID-19, business travel is expected to boom, so using a GDS is a smart strategy that can open up visibility with segments that you would not be able to reach through OTAs and other third-party channels.

Enhance Your Booking Process

Another benefit here is that your staff don’t have to do anything regarding reservations and booking rooms. Because travel agents have direct access to your inventory, and the information is delivered in real-time, they make reservations and handle the rest of the booking process on their end. You will be notified that a reservation is complete and there is no need to handle anything manually. That allows you to boost the number of reservations you make without seeing a corresponding uptick in front desk staff.

Cut Your Marketing Costs

Using a global distribution system also allows you to cast a much wider net and build visibility without a corresponding increase in your marketing costs. Yes, it does cost to use a GDS – there’s an initial setup fee involved. However, it will be dramatically less than what you would invest in marketing to see the same level of expanded reach via online marketing or even traditional marketing. So, for a small initial fee, you get what amounts to free marketing.

Simple Integration with Your Technology Stack

Finally, you’ll find that your global distribution system also dovetails with your existing technology stack, including your property management system. That offers even more benefits in the way of automation of time-consuming, mundane tasks, as well as ensuring that real-time information is fed directly into the GDS without a staff member having to update the system manually.

Is Your Property a Good Fit?

While using a GDS is a great idea, it’s not applicable to all hotels. How do you know if your property is a good fit for a global distribution centre?

First, the best-suited hotels will be centrally located in a geographic area. This ensures that it’s within the travel area that agents’ clients want to visit. If you’re outside that area, you may still be able to use a GDS, but may see less value.

You should also be within easy reach of an airport unless you’re located in a high-demand, rural area without its own airport. Close proximity to an airport makes it easier for travel agents to arrange for package deals, such as hotel rooms and airfare.

You should have the right capacity. Generally, hotels with 20 rooms or fewer are not well-suited to this setup.

Finally, make sure that your lodgings are set up for corporate markets and that any seasonal impact is either negligible or minor. This allows you to benefit from the guaranteed rates we discussed previously.

Moving Forward in a Post-Covid World

Using a hotel global distribution system offers many benefits, but one of most importance to you is visibility. This is particularly true in a post-COVID world where travel is in flux. Today hotels cannot afford to miss out on offline tour operators. And remember, the use of travel agencies is actually increasing today. Millennials in particular value the experience of working with a travel expert, while the affluent appreciate the convenience of turning all their travel planning and legwork to a trusted professional.

At Hotelogix, our property management system was designed from the ground up to work with the leading global distribution systems. It’s never been simpler to expand your visibility and build a stronger brand.