What is a Hotel Global Distribution System (GDS)?

So, GDS is a perfect option for you to attract guests to your property. After all, it is one of the best distribution channels that hotel owners use to increase their online visibility, connect with potential guests, and sell their bookings.

History of GDS in the hotel industry

The evolution of GDS started in the 1960s by the airline industry for keeping track of flight schedules, availability, and prices. The airline industry used GDS to automate the booking process for travel agents. 

Seeing their success, the hotels adopted GDS in the 1980s to increase their global reach and sell more bookings to potential customers.  

Travel agents who’ve become part of this hotel GDS system can even book flight tickets and accommodation through a single platform.  

With a change in consumers’ booking habits, the global distribution system adapted to their changing needs through seamless integration with PMS or providing real-time updates on inventory availability and pricing. 

Today, GDS has become a game changer not just for airlines and hotels, but it can be used for booking rental cars, cruises, rail tickets, etc.

What are the advantages of a Global distribution system for hotels?

There are various benefits that GDS provides to hoteliers which are as given below-

1. Reach to international travelers

GDS is a lucrative option for hoteliers to widen their global reach, especially new market segments they haven’t tapped yet.

Probably, your hotel caters to the needs of family travelers but through GDS, you found a new set of people to target (corporate travelers).

This way you can fulfill their reservation needs and earn more revenue. Generally, it’s found that travelers who plan their trips through GDS have extended trip lengths and are likely to spend more.

2. Increase your occupancy level

Another benefit of integrating your hotel with GDS is to increase the occupancy level. Hotel managers can promote their inventory at a global level as GDS has a pool of travel agents.

Whether the traveler makes the reservation on leading OTAs or searches for the best accommodation option through an online travel agency, you can tap into a diverse range of audiences from different geographical locations. 

As a result, more online exposure increases your occupancy bar. 

3. Real-time insights for hoteliers

The reporting and analytics feature of GDS enables hoteliers to monitor seasonality patterns, market trends, and guest demographics and then fine-tune their room rates. As a result, it increases hotel revenue.

With such real-time insights at their fingertips, they can adjust their pricing strategies and make informed decisions in the future.

4. Create bundled services

Another benefit hotel managers get by connecting through GDS is creating bundled packages for clients.

Here, they can allow guests to reserve a stay along with access to travel-related options such as car rentals flights, and other additional products.

Thus, hotel owners can increase their revenue as bundled services seem like a lucrative option and guests prefer purchasing such attractive packages. 

5. Saves manual time and efforts

The global distribution system for hotels reduces the manual workload for hotel staff as it automatically updates the availability of room inventory and its rates.

As the rates and availability are updated in real-time across all channels, this saves time and effort for hotel staff, and they can devote their time to value-generating activities or something that enhances the guest's experience. 

What are the essential features of GDS?

Before choosing the right GDS provider for your property, you should keep a checklist hand to choose an appropriate partner that aligns with your business needs.

Besides looking for a cost-effective GDS system for your hotel, make sure to look for one that has good features and functionalities.

1. Shared inventory

A good GDS should have the pooled inventory feature, meaning you can sell your hotel rooms across different distribution channels. Thus, you can increase your online visibility and get more revenue. 

2. Earn more revenue through commission-free bookings

Make sure to choose a partner that allows you to earn bookings and doesn’t charge a commission from you when a guest makes a reservation.

3. Integration capabilities

Choose the GDS that offers seamless integration with the existing online booking engine, channel manager, and existing PMS. Thus, you can fine-tune your distribution strategy by saving your time and resources. 

4. Target a specific set of travelers and market

Once you analyze the target customer you want to serve, then pick a hotel GDS that covers your target audience in a specific area or region. 

Key Factors to Consider When Choosing a Global Distribution System

As there are plenty of GDS providers available in the market, hotelier needs to make a strategic choice when choosing a GDS system for themselves -

1. Identify your target clients

The first step involves identifying your ideal customer such as whether you cater to business or leisure travelers.

Every GDS provider differs from one another as it has unique strengths and if you find that a huge list of travel agencies or businesses book using this platform. Then, there’s a lot of potential this platform has.

So, you need to assess whether your target audience falls in this category.

2. Functionality

Selecting the hotel GDS system involves assessing the functionalities because every centralized reservation system differs from each other.

For Instance – GDS like Amadeus has an extensive search functionality and has become the largest GDS on the market. 

While Travelport has limited search functionality allowing guests to book travel-related services. So, when choosing a GDS, choose the one that meets your functional needs.

3. Pricing of System

Choose a GDS system that meets your budget. Every GDS comes with a different pricing structure such as transaction cost, maintenance, and connection fees.

Assess the cost structure with the naked eye as some fees might be recurring while others can be one-time charges.

4. Whether it charges a commission or not

There are some GDS service providers who charge a flat fee for all bookings, and some might charge a certain percentage of commission on each booking.

Whatever GDS you choose, make sure to select the one that charges a flat fee so that you can capture more booking revenue.  

5. Integration with PMS

When choosing a GDS system, evaluate whether it can be integrated with PMS. 

A seamless integration of GDS with a PMS ensures that you need not worry about updating inventory across all platforms as it updates everything (hotel availability and its rates) in real-time. This reduces the risk of overbookings. 

6. Reporting and Analytics

A good feature of hotel GDS is that it should have a comprehensive reporting feature meaning it provides you with real-time insights to let you understand guest behavior, booking patterns, and market demand.

Detailed insights help you to fine-tune your marketing and pricing strategies. Thus, you can improve the hotel’s performance from time to time and make it more profitable in the long run.

7. Does it have a good market reach?

Stick with the GDS that provides a good market reach and if it doesn’t have a strong market presence, then you won’t be able to cater to the specific group of travelers. 

8. Does it provide long-term support?

When choosing a hotel GDS system, assess whether the system provides long-term support or not. Continuous support is necessary for you to solve your technical issues. 

Wrapping up

Now, you understand that listing your hotel on a Global distribution system (GDS) is a crucial component of your hotel’s distribution strategy.

This way you’re not just dependent on creating a direct booking strategy, rather you expand your online presence across different markets to sell more bookings and earn more revenue. 

When selecting the GDS provider, make sure to stick with the one that provides extensive search functionality, exclusive long-term support, and provides you real-time reporting insights so you can tweak your offerings accordingly. 

At BOTSHOT, we can become your go-to partner for integrating your GDS with our channel manager. 

Managing your inventory becomes easy across all channels and as the system provides real-time updates on inventory availability and rates, you can avoid overbooking issues.