Why the GDS system is still as important as ever for hotels

Why the GDS system is still as important as ever for hotels 842 510 HotelREZ

The Global Distribution System (GDS), is a computer reservation system that allows travel agents to book hotel and travel services on behalf of their customers. There are four distribution channels that make up the GDS, namely Amadeus, Galileo, Sabre and Worldspan. Despite generating billions of dollars in sales year on year, we’ve heard many hoteliers refer to the GDS booking engine as “dying”, “outdated” and “disappearing.” 

The reason for this is because of the recent spike in popularity for online travel agents (OTAs), making many hoteliers think they need to try ‘beat the OTAs.’ While changing booking habits and the rise of OTAs can’t be denied, it by no means renders the GDS irrelevant. In fact, over 600,000 travel agents use the GDS to book flights, hotel rooms, car rentals and destination activities every single day.

As a hotel representation company with over 15 years of experience in the industry, we can confirm that not only are there plenty of benefits to the GDS, it is also not going anywhere any time soon. Here’s why: 

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Strong, continuous annual growth

GDS production continues to grow year on year by as much as 5% to 10% worldwide. In fact, not too long ago GDS bookings were actually outpacing direct bookings, growing 60% faster. What’s more, it was announced earlier this year that GDS hotel bookings experienced a record year in 2018, generating over 75 million annual reservations globally.

Similarly, travel agencies are an ever-growing, influential force in the hotel industry. The GDS, as a viable revenue channel continues to experience strong annual growth and is not going away any time soon. 

More corporate bookers

Many large companies use the GDS to manage their travel expenses, meaning it is a gold mine when it comes to attracting more corporate travellers. The GDS allows all expenses to be tracked, making it easy and user-friendly for companies to make hotel reservations for their employees.

Corporate guests are ideal customers because they tend to use other hotel services, such as the restaurant or spa, increasing incremental spending per room. There is also a current trend of corporate bookers adding on additional nights for ‘bleisure stays’. What’s more, agencies tend to get better fixed rates via RFP corporate rate programmes, so using a GDS system is a win-win situation for both parties involved. 

For more information on how the GDS will help you receive more corporate bookings, have a read of ‘the importance of RFPs to increase corporate GDS business.’ 

Worldwide exposure

If you’re looking to expand internationally, look no further. There is no easier way to give your property global reach than through the GDS. The majority of business and leisure travel from the United States is booked via the GDS, and bookings from countries such as Russia, Japan, India and China is on the increase. 

In 2012, Chinese authorities relaxed regulations to allow Chinese travel agents to book on international GDS systems, which resulted in a combined spend of US$288 billion on international travel in 2018. China is currently the world’s largest outbound tourism market, with experts predicting that Chinese tourists will take 160 million outbound trips by 2020. Here’s more about the importance of the Chinese outbound tourism market

The GDS system: a significant revenue stream for any hotel

Doubts arising as to whether the GDS is losing relevance as a distribution channel are often rooted in misunderstandings of what the GDS is and how it works. Unfortunately, these type of misunderstandings more often than not result in hotels missing out on a very important opportunity to maximise their bottom line profits. This is particularly the case if you’re looking to increase corporate business, as the GDS is a huge corporate bookings source.

At HotelREZ, we provide quality distribution, representation, marketing and consultancy services to more than 1,500 hotels in over 100 countries. We’re experts at hotel GDS distribution to help our member hotels receive more bookings. Find out more about our GDS distribution services or get in touch today.

About HotelREZ 

HotelREZ Hotels & Resorts was founded in 2004 by Mark Lewis, an experienced hospitality industry professional and entrepreneur. Over the course of over a decade, the company has grown to be one of the leading hotel representation companies dedicated to marketing and connecting independent properties with bookers worldwide. HotelREZ now provides distribution, revenue, sales consultancy and marketing services and support to more than 1,500 hotels, apartments and hotel groups in over 100 countries including private label GDS chain code solutions. HotelREZ Hotels & Resorts is a SAAS company.

HotelREZ manages the brand Best Loved Hotels, a collection of unique global individual properties, with a dedicated GDS Programme, together with a Website and printed Directory, aimed at the high-end leisure agency and traveller. HotelREZ also incorporates the global World Rainbow hotels, the world’s only GDS enabled LGBT global hotel consortia representing some 1200 hotels in 230 destinations across the globe.