What is the GDS and do I really need it?

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We’ve been blogging a bit recently about the importance of online marketing in the hospitality industry (in all industries, really). One effective online marketing strategy to consider is getting your property on the GDS. GDS stands for Global Distribution System and is essentially a central reservation system for airlines, hotels, rental car companies, cruise lines and other travel services worldwide. The first GDS was created by the airline industry way back in the 1960s to keep track of flight schedules, pricing and availability. Soon after, travel agents were tapping into the automated system, which provided them with a single point of access for comparing rates across multiple travel providers and making bookings. Today the GDS not only powers traditional travel agency platforms but many travel websites (OTAs) like Expedia, too.
The GDS network puts your hotel (and your rates and availability) in front of more than 600,000 travel agents worldwide and millions of travelers using travel websites like Expedia and Travelocity to find a place to stay. People are now traveling farther and more frequently than ever so it’s important to connect your property to the global market — the more visible you are to travel agents and travelers online, the more reservations you will receive. The theory makes sense, and for many independent hotels the GDS is an important part of a balanced marketing plan to increase online bookings.
Sounds great, but what does it cost?
While the benefits are obvious, the GDS is not the answer for all properties. Connecting to the GDS is an investment and one that doesn’t normally come cheap. In addition to a one-time sign-up fee, there are annual maintenance fees, booking fees per reservation, and commissions payable to the travel agency or travel website through which GDS reservations are made.
So is it worth it?
Considering the cost and the fact that a GDS cannot influence demand for your property, a GDS is most beneficial to hotels with approximately 25 rooms or more and/or located in a popular travel destination. These properties should attain sufficient GDS bookings to outweigh the costs—after all, getting 80-90% of your rack rate is better than an empty room. If your hotel fits the bill it is worthwhile looking into a GDS that suits your needs and budget.
The four major GDS providers are Amadeus, Galileo, Sabre and Worldspan, accessed via channels like Pegasus, InnLink and Genares. Managing your GDS inventory can be simplified by integrating your GDS channel with your Property Management System. WebRezPro PMS provides two-way interfaces with a number of GDS channels allowing you to update your GDS rates and availability directly through the PMS in real time. And, reservations coming through your GDS channel are automatically entered into the PMS. It’s a real time saver.
OK, I’m in. How can I make the most of my GDS connection?
If you do decide to go with a GDS (and we do recommend it for larger properties), make the most of it by ensuring your hotel’s GDS listing is up to date with an appealing property description that highlights your hotel’s best features (including nearby attractions), a complete amenities list, and photos that show off your hotel in its best light. It’s also important to measure your ROI. Track reservations coming through your GDS provider to determine whether the GDS is really working for you.