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When people talk about hotel sales, they usually think of direct bookings, online travel agencies (OTAs) such as Booking.com and, increasingly, AI-based travel assistants. The Global Distribution System, or GDS for short, on the other hand, is still often regarded as a traditional sales channel.
But this view no longer does justice to the reality of today’s market. For hotels, a GDS is increasingly more than just a means of generating bookings. It can determine whether a hotel is even available to certain guests and booking systems.
The article ‘The GDS is not a channel anymore’ by Markus Busch addresses precisely this development. According to the article, the crucial question is no longer solely: ‘How visible is my hotel?’, but rather, first and foremost: ‘Is my hotel even bookable for this demand?’
For hotels, this changes the strategic importance of the GDS within their overall distribution strategy.
What is a GDS in the hotel industry?
GDS (Global Distribution System) emerged in the 1960s from the computerised reservation systems of major airlines, such as American Airlines’ SABRE. Since the 1980s, they have evolved into global platforms through which travel agencies can compare and book not only flights but also hotels, hire cars and other travel services. Well-known systems include Amadeus, Sabre and Travelport.
Hotels use GDS to provide travel agencies and corporate clients with information on room availability and prices. Today, however, it is increasingly fulfilling a different function.
Why the GDS is more than just a traditional sales channel today
On a traditional sales channel, hotels compete primarily for attention.
On platforms such as Booking.com, for example, price, availability, reviews, the presentation of offers and placement play a key role in determining which hotel a guest notices and ultimately books.
With the GDS, the decision may be made one step earlier. Here, the first consideration is whether a hotel is even available and bookable within a specific booking context.
Corporate travel policies, negotiated corporate rates, consortium agreements and technical integrations can determine which hotels and rates are offered to a traveller. As a result, the GDS is increasingly taking on the role of an access infrastructure.
The key difference: visibility or access?
When it comes to hotel distribution, the distinction between visibility and access is crucial.
Visibility means that a hotel is displayed as a matter of course and then competes with other hotels for the booking.
Access means that the hotel must first meet the technical and contractual requirements in order to be available to a particular traveller or booking partner in the first place.
If, for example, a hotel is not properly connected or a relevant rate has not been entered correctly, the offer may not even appear in the booking process. In such cases, the hotel does not lose out to a competitor because of a lower ranking; it simply does not participate in that part of the market.
What role does the GDS play in business travel?
This function is particularly evident in business travel management.
Many companies operate with defined travel policies, preferred hotels and negotiated corporate rates. Employees book their trips via appropriate corporate booking tools or travel management companies.
The following criteria, amongst others, may be relevant:
- agreed corporate rates
- the company’s travel policies
- maximum accommodation budgets
- preferred hotel partners
- availability
- cancellation terms
- contractual agreements
This means that even an attractive hotel with a competitive price may be irrelevant to a business traveller if it is not available within their booking system. The GDS connection thus becomes a prerequisite for access to certain corporate travel segments.
Why the GDS is also relevant for leisure guests
GDS is still often associated almost exclusively with business travel. However, this view is too narrow. High-quality leisure travel and corresponding hotel bookings can also be arranged through travel agencies, tour operators and consortium programmes.
Particularly in the premium and luxury segments, agreements may, for example, include additional services such as breakfast, upgrades or other benefits. This means that a GDS strategy can also be relevant for hotels whose focus is not exclusively on traditional business travellers.
The crucial question is therefore not just whether a hotel wishes to cater to corporate travel, but which customer groups can be reached via the respective distribution infrastructure.
What does this development mean for hotel distribution?
Hotels should not view the GDS in isolation as just another sales channel.
Rather, it should form part of an overarching distribution strategy.
This involves, amongst other things, the following questions:
- Which guest groups do we wish to reach?
- Through which systems do these guests book?
- Are our rooms and rates available there?
- Are relevant corporate and consortium rates correctly entered?
- Are availability and restrictions correctly maintained?
- What demand might we be missing out on through our current distribution channels?
This shifts the focus from a purely channel-based strategy to an access strategy.
Which hotels should review their GDS strategy?
A review may be particularly useful for hotels that:
- cater to a high proportion of business travellers
- are located in economically strong cities or business destinations
- wish to collaborate with companies or travel management organisations
- wish to attract international guests
- operate in the upmarket or luxury segment
- work with travel consultants and consortia
- wish to reduce their dependence on individual OTAs
- do not yet have a clear GDS strategy
However, the hotel’s individual demand and distribution structure is always the decisive factor. A GDS connection is not automatically equally relevant for every hotel.
What hotels should specifically be checking at the moment
Hotels should first analyse the significance of GDS-based demand for their own positioning and target audience.
Five areas are particularly relevant here:
- Check GDS connectivity: Is the hotel technically correctly connected to the relevant systems?
- Check rates: Are corporate rates, consortium rates and other relevant offers correctly entered and available?
- Check availability: Are rooms, restrictions and availability reliably transmitted?
- Analyse demand: Which guest groups and bookings could be reached via GDS-based systems?
- Take a holistic view of distribution: How do direct sales, OTAs, GDS, travel agencies and future AI-based booking channels interlink?
The key question should not be: “Do we need yet another distribution channel?” but rather: “Are we actually reaching all the relevant demand groups through our current distribution structure?”
GDS, AI and the future of hotel distribution
AI-based travel assistants are increasingly changing the way travellers discover, compare and, in future, possibly also book hotels. As a result, the traditional search is becoming less important as the sole entry point to the customer journey.
However, this does not mean that the technical and contractual infrastructure behind a booking disappears. Even an AI assistant needs accessible information, rates and, ultimately, a way in which a booking can be made.
For hotels, this means that new technologies are changing the face of hotel distribution. The infrastructure behind it, however, remains a crucial factor. Hotels should therefore not base their distribution strategy solely on where guests search today, but also on the systems through which their offers are actually available and bookable.
Conclusion: In the GDS, hotel sales begin with access
Nowadays, the Global Distribution System should no longer be viewed solely as a traditional distribution channel. For certain guest segments, it is, in fact, an infrastructure that enables hotels to access bookings in the first place.
This raises an important strategic question for revenue managers and hoteliers: Is our hotel available wherever our target guests actually make bookings? After all, visibility can be optimised. Access must first be established.
FAQs on GDS in the hotel industry
GDS stands for Global Distribution System. It connects hotels and other tourism service providers with travel agencies, travel management companies and other booking systems.
Internationally renowned global distribution systems include, amongst others, Amadeus, Sabre and Travelport.
A GDS connection can give hotels access to customer segments that book through travel agencies, corporate booking tools, travel management companies or other connected systems.
No. As well as business travel, travel agencies and tour operators can also use GDS-based systems for high-end leisure travel. The relevance depends on the hotel’s positioning, target groups and distribution strategy.
Booking.com is a primary B2C booking platform (online travel agency) on which hotels compete for bookings and visibility. A GDS, on the other hand, provides a technical distribution infrastructure in the B2B sector, through which hotels and rates can be made available to specific booking partners and demand groups.
GDS can form part of a hotel’s distribution and revenue management strategy. Key factors here include, amongst others, the right rates, availability, target groups and contractual agreements.
