By Isis Darios
GDS is one of the best ways to promote your hotel in the global corporate travel market. For this reason, you may want to consider adding a GDS to your distribution strategy.
Here we’ll review the GDS definition, the two main types of rates supported in a hotel GDS system, the types of hotel properties that will benefit most from a GDS connection, and the three biggest players in the GDS realm.
What is a GDS in the hospitality industry?
A Global Distribution System, GDS, is an online system that delivers real-time hotel, airline, train, and car rental inventory, room rates, discounts, and more to travel agents and other businesses.
The GDS system allows travel agents to purchase flights and book rooms for customers on behalf of the traveler. Some Travel Agencies also provide self-service portals (Egencia, CWT) to travelers that use GDS inventory but operate similar to today’s online travel agencies.
Many travel agents and corporate bookers still use a Global Distribution System to build customer relationships and book a travel service. Users have access to specially negotiated prices and room types that aren’t available on OTAs or other distribution channels, allowing them to evaluate and book the best, most affordable options quickly.
What are the benefits of a global distribution system?
Now that you know the GDS hotel definition and how it works, we can dive into the benefits of using a hotel GDS:
- Presence on a strong corporate travel platform –A hotel GDS gives your hotel access and visibility to thousands of travel agents and corporate bookers around the world who are looking to sell hotel rooms either individually or as a package, broadening your sales possibilities.
- Integrates with your PMS for real-time inventory updates – A global distribution system can integrate with your Property Management System (PMS) so that the reservation process is fully automated and your availability is updated across other OTAs and your direct bookings site.
- More exposure to higher-paying clientele – As part of a GDS hotel booking system, your hotel will be exposed to a more targeted, professional travel community that alternative property types don’t have access to. Still, if you have the budget, you also have the option to participate in paid positioning services to increase your exposure even further.
- Increased revenue opportunities – A hotel GDS provides several new opportunities to grow hotel revenue, including participation in attractive package deals (hotel, airfare, car rental, etc.), increased return business, and longer stays.
The types of hotels that stand to benefit most from using global distribution systems are:
- Hotels with a three-star rating or above, 20 rooms or more, and an average of $100 dollars (€90 Euros) rate per night
- Hotels that can cater to corporate customers: 24/7 reception, high-speed internet, private rooms, business center, an in-room workspace
- Hotels within a 60 mile (100 kilometers) radius of an airport
How do GDS systems work?
First, you should know that GDS services are only available for authorized users who are licensed and registered and not accessible for use by the general public. This is because the GDS hotel booking system allows companies, such as travel agencies and corporate bookers, to book travel on behalf of others.
Still, GDSs also have the power and functionality to send their inventory to OTAs. So, it’s possible to list a room on a GDS and sell it on a website like Booking.com or Expedia.
Hotel owners can load two main types of rates on a GDS system for hotel bookings: public rates and negotiated rates.
- Public rates are visible and bookable to all agencies in a GDS and are subject to commissions that are paid to the booking agency. Common public rates are Best Available Rate (BAR), Corporate (COR), and Government (GOV).
- Negotiated rates are only visible to companies with which you have a special agreement. The authorized agencies that can book these rates must enter an agreed-upon GDS hotel code called a Rate Access Code. Since negotiated rates are based on net rates, they are not subject to commissions.
Negotiated rates are often reserved for large corporations that have offices, plants, or factories near the hotel. The hotel and the company need to make an agreement and decide on a sale price together before the negotiated rate can be activated. Negotiated rates typically come about in two ways: 1.) The travel manager of a large corporation negotiates discounted rates at participating properties, or 2.) A local sales manager of a hotel negotiates a discounted rate with a local company.
There is also a possibility to have rates that correspond to a Consortia program or Travel Management Companies (TMCs). Consortia and TMCs are large, global travel agency groups and hotel groups that come together under one umbrella. Travel agents can search for hotels using GDS hotel codes that are dedicated to Consortia programs or TMC groups. The rates that appear for these groups are negotiated beforehand with the hotel.
What are the three types of GDS systems?
In terms of hotel GDS providers, there are three main giants that dominate the market:
Amadeus – Amadeus has been connecting travel providers to travel sellers since 1987. They serve over 770,000 hotels in 190+ countries worldwide and have a global team of 19,000 employees. Aside from hotels, Amadeus also services airlines, airport operators, rail operators, ground handlers, car rental companies & transfer providers, insurance provider groups, and cruise lines & ferries.
Sabre – Sabre has been part of the birth of airline automation since the 1960s. Today, they have almost 400,000 travel agents in their global travel marketplace. Their technology products include travel-focused mobile apps, check-in kiosks, airline and hotel reservation networks, ticket agent terminals, aircraft & crew scheduling systems, revenue management solutions, and much more.
Travelport (Galileo, Worldspan, Apollo) – With origins leading back to 1971, Travelport encompasses the Galileo, Worldspan, and Apollo GDS systems. Their worldwide travel retail platform services travel agencies and suppliers with distribution, technology, and payment solutions, among others. They have partnerships with hotel chains as well as boutique hotels to develop targeted promotions and flexible rate models to gain greater visibility in their markets.
Connecting your hotel to a GDS with Cloudbeds
Cloudbeds users can connect to global distribution systems via the channel manager. This approach will save you the trouble of trying to connect to a hotel GDS individually which can come with expensive set-up fees and other additional costs. Cloudbeds’ simple solution connects you to a system that connects to the big three GDSs mentioned above, allowing you to manage all your GDS accounts from one platform.
Cloudbeds users have three options for connecting to hotel GDS providers:
- Hotelnet – has more than 10 years of experience working in GDS distribution for hotels worldwide. They are an Amadeus partner and work closely with them to provide the best service for their hotel customers, including expert support. Hotelnet provides a risk-free connection with no fixed fees and no binding contract.
- Recoline – connects your hotel to Amadeus, Sabre, Travelport (Galileo, Worldspan, Apollo), and Axess (Japan) via an online platform that gives you full control of your availability, pricing, descriptions, and more. The Recoline team will help you set up your company rate agreements for success will handle commission delivery for you.
- Hotusa – specializes in equipping independent hotels with the tools they need to work with the resources that are typically only available to large chain hotels. They are the world’s leading independent hotel consortium with close to 1,000 hotels represented in GDS. Hotusa can help your hotel gain a wider reach, more visibility, and greater diversification.
Cloudbeds makes it easy to connect your properties to hotel GDS providers. Once you’ve registered with Hotelnet, Reconline, or Hotusa, simply visit your Channel Distribution page in your PMS, find the channel name, and follow the step-by-step instructions to establish connectivity between systems.
After you have completed the setup, we’ll begin sending pricing and inventory to that GDS provider, just like we do for OTAs. As agents and affiliates book your inventory, reservations will appear in your PMS. As ever, your booking engine will be updated accordingly.
If you haven’t decided on the best provider for you, our Knowledge Base articles, linked above, have contact information to help you explore services and reach out for more information.
It’s more likely that the GDS system will evolve in the coming years rather than become obsolete, so it’s worth connecting to one if you want to attract more business travelers and make gains in the corporate travel industry.
For the widest visibility and revenue-earning potential, consider connecting your PMS to a GDS distribution platform that will allow you to connect to several big-name hotel GDS providers and manage your account on one system.