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Why a GDS Should Be Part of Your Hotel Distribution Strategy

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Global Distribution System (GDS) is one of the best ways to promote your hotel in the global corporate travel market. This is simply because GDS’s are the preferred platform used by approximately 600,000 travel agents worldwide. 

Travel agents spend their days searching and booking accommodation on GDS platforms on behalf of high-value clients. 

Those clients include small-medium and multinational companies that come to them for fast, efficient, and reliable service. By joining a GDS, hoteliers are more likely to connect with travel agents and form mutually beneficial relationships. 

The results? Year-round bookings and reliable revenue streams. 

Steven Bagg, CEO of World Hospitality Solutions (WHS) shares his expert insights on how small hotels can significantly increase their revenue by including GDS platforms in their distribution strategy to attract more high-value bookings.  

 

What is a Global Distribution System (GDS)?

 

 

Source: Holiday Simply

 

First things first, what is a GDS, and what makes them so popular among a large network of travel agencies?  

 

In simple terms, a GDS is a computerised reservation system that acts as a middle-man to connect your hotel to travel agency professions. The GDS platform allows travel agents or corporate bookers to book rooms on behalf of clients. When travel agents use GDS’s, they know their bookings are immediately confirmed and they have access to specially negotiated rates that are not available on OTAs or other distribution channels. 

 

The same approach is followed for airlines, rental cars, and cruise lines. The three most popular GDS’s are Amadeus, Sabre, and Galileo. 

 

How do GDS systems work?

 

It’s important to know that GDS services are only available to authorized users who are licensed and registered and not accessible by the general public. This is where GDS hotel providers like WHS come in to handle the setup, management, and administration on behalf of hoteliers. 

 

Hotel owners have the freedom to choose between two main types of rates on a GDS system for hotel bookings: public rates and negotiated rates. Hoteliers may be more familiar with public rates as they are similar to the commission-based structure of OTAs. These rates are visible and bookable by all travel agencies in a GDS.

 

Negotiated rates, on the other hand, are only visible to travel companies with which you have a special agreement. Connecting to the GDS system through a hotel provider like WHS means that hotels get to benefit from their travel agency partnerships.

 

WHS has partner agreements with all large local travel consortia and agents in South Africa, including Bidtravel, Rennies, BCD, Tourvest, American Express, Travel With Flair, among others.

 

What Benefits Do GDS Offer Small Hotels?

 

business-traveler-hotel-luggage-suit | Why a GDS Should Be Part of Your Hotel Distribution Strategy

1. More exposure to higher-value and higher-volume guests

 

The corporate and government travel market is typically characterised as high volume, high value, complicated, last minute, and has specific location and service requirements. For this reason, travel management companies and agents are appointed to manage the reservation details. These management companies and agents only book via the GDS.

 

Bagg suggests that hoteliers should capitalize on cost-effective and revenue-generating opportunities available in the lucrative corporate travel market. “The average room rate delivered by the GDS is approximately 25% - 30% higher than the average room rate of accommodation establishments.” 

But with the current issues regarding travel restrictions and remote work, many hoteliers are left wondering if it’s worthwhile to tap into the corporate travel market in 2022?

 

Markets suggest that corporate travel is likely to return to normal in the first quarter of 2022. “In fact, if COVID does not reappear I feel that we should see an improvement on 2019 travel levels, due to pent-up business requirements,” says Bagg. “I have no doubt that the GDS booking levels will increase dramatically in 2022 again.” 

 

2. Adopting an effective channel mix 

 

Online travel agencies (OTAs) like Booking.com and Expedia are the most popular channels used by independent hoteliers to sell their rooms. While this isn't wrong, it does limit your potential guests to seasonal holiday goers

 

And unlike business travelers, tourists are less inclined to splurge on additional services at your property like the spa facilities, open bar tabs, and conference rooms. Bagg believes that business travelers are the ideal guests. “They are low maintenance as they typically leave early in the morning, and come back late at night.

 

By sticking solely to OTAs you are likely losing out on reliable year-round business and opportunities to increase revenue per available room (RevPAR). 

 

Adopting a dynamic mix of channels that include both OTAs and GDS’s is the secret formula to keep bookings flowing, whether it’s high or low season.

 

3. Integrates with your PMS for real-time inventory updates

 

Very importantly, a GDS 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. 

 

RoomRaccoon users can connect to global distribution systems via the channel manager. Once you’ve registered with World Hospitality Solutions (WHS), a seamless, quick, and easy connection can be established between systems.

 

Conclusion

The GDS system is likely to evolve and become more pertinent in the coming years. So it’s worthwhile connecting to one, especially if you’re a small and independent owned hotel. The costs are low, it’s easy to integrate into your existing booking tools, and the benefits of the corporate travel market are potentially huge.

Interested in selling your rooms on GDS? Get in touch with us – we are happy to help!