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The Increasing Use of GDSs for Hotel Reservations

Global Distribution Systems (GDS) have been gaining in popularity recently, and a lot of that is due to one reason – hotel reservations. The rapid rise in the last two years is true not just in North America, but all around the world, too. In 48 countries, over 900 travel agents have said in a comprehensive survey that they decided to use GDSs to boost their ability to better serve their clients (Hotel News Resource, 2015).

The survey, conducted by TravelClick and Phoenix Marketing International, focused primarily on hotels. The two companies crafted one of the most detailed surveys conducted thus far, giving the best picture of the industry today. TravelClick is a cloud-based solution provider for hotels to help them increase their revenue; Phoenix Marketing is a market research firm (Hotel News Resource, 2015). This news is encouraging for hoteliers especially so they know how to focus their efforts in years to come. The use of hotel GDS will, in turn, give them the best chance of increasing revenue per room (Hotel News Resource, 2015).

The survey’s depth also showed that travel agents love using GDS because it allows them to be able to help their clients, particularly business travelers, find the best prices on hotels possible (Hotel News Resource, 2015). This was true regardless of the specific GDS solution used, whether it was Travelport, Amadeus, or Sabre (Travel Agent Central, 2015). And just how impactful is the use of GDS? Fifty-one percent of travel agents in TravelClick’s survey reported that they have used GDS more often in the past two years than they had in the years prior, and a stunning 65% are aware of GDS promotional text messaging capabilities (Travel Agent Central, 2015). 

Some travel agents are using that messaging ability to learn more – 24% will look at the screen attached to the message while 29% will use their GDS to get more details (Biesiada, 2015). The variety of options for travel agents’ use of GDS is wide and growing all the time. Still, 69% of travel agents will book their clients into a hotel based on the offer, not driven by the advertising they see in the GDS messaging (Hotel News Resource, 2015). Hotel ratings also remain important – 43% of agents marked this as a reason they make a decision to use a given hotel when booking their clients’ trips.

That ability to compare rates cannot be understated. More than 50% of the agents in the survey stated that they would avoid booking clients into hotels that are not willing to offer their best prices in the GDS. Rate parity, or pricing that remains the same no matter what platform the hotel is offering its rooms on, is a crucial deciding factor for almost every agent – 96% (Hotel News Resource, 2015).

But for many travel agents, they need more than just the amount of the room charge. Travel agents are also looking for rooms that give their clients the best services. Topping the list is free breakfast, but not far behind is free internet access. Other perks like earning free nights are certainly important but not as much so (Travel Agent Central, 2015). And what if the hotels in the GDS don’t offer the best rate? Half of the travel agents will go where they can find that best rate for their clients, outside the GDS (Biesiada, 2015).

The options that have been available for comparing airlines by price and schedule are now being translated over to hotel bookings. Corporate travel agents have very precise things that they are looking for to ensure their clients will have the best trip possible, and GDS provides a more powerful and robust way to search for those options.

What does all of this mean for the travel industry and agents in particular? Experts like John Hach with TravelClick predict that this year will end up being a banner year for hotel bookings conducted through the GDS (Biesiada, 2015). That translates to a need for hotels to be mindful of the GDS and use that knowledge to leverage the best return per room they can. Being willing to negotiate even previously agreed upon rates can mean a big difference to hotels. Forty-seven percent of agents are always looking for the best deal possible for their business clients and they will book the hotel with the best rate, even if one has already been negotiated (Hotel News Resource, 2015).

The power of the GDS has always been there, but the unique use of GDS for hotels is just beginning to be tapped. GDS hotel bookings are a hot commodity right now, and the trend is continuing to rise. The travel agents’ GDS use is not expected to slow down and hotels are realizing this, adapting their business methodologies to take advantage of this modern model. With a dramatic rise of 51% in just the last two years of travel agents seeking GDS for their solutions for corporate travel hotel bookings, it could be said that the sky is the limit.

Sources:

Biesiada, J. (2015, September 23). Travel Weekly. Retrieved October 14, 2015, from www.travelweekly.com: http://www.travelweekly.com/Travel-News/Travel-Agent-Issues/Agent-use-of-GDSs-for-hotel-reservations-on-the-rise

Hotel News Resource. (2015, September 23). Retrieved October 14, 2015, from http://www.hotelnewsresource.com: http://www.hotelnewsresource.com/article85715.html

Travel Agent Central. (2015, September 23). Retrieved October 14, 2015, from http://www.travelagentcentral.com: http://www.travelagentcentral.com/trends-research/stat-51-percent-agents-report-gds-use-53214

2018-05-17T13:28:13+00:00 November 2nd, 2015|Categories: Blog, Travel Trends|

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