What is a Hotel Global Distribution System and How Could it Save You Time?

Global Distribution Systems

As a hotel owner in today’s competitive world, you’ll no doubt be casting your net far and wide in terms of ways to market your property and lure in guests from all over the globe.

There are numerous methods, from overhauling your website and implementing the best booking engine to putting a rigorous social media strategy in place that convinces travellers that your property is the best place to rest their head.However, one you might not be particularly familiar with – even though it is among the oldest marketing techniques – is the global distribution system (GDS).Let’s take an in-depth look at what this actually is and how it could potentially save you time and money, as well as pulling in more reservations.

What is the GDS?The GDS is a huge computer network that provides inventory and rates from hotels to travel agents and other travel sites. It’s used by companies including car rental providers and airlines as well as hotels.It’s best to think of it like a middle man that joins your property up with a network of professionals from the travel industry. You connect up to the GDS and can access a plethora of travel agents, who can then sell your rooms to their own customers, whether they’re leisure travellers looking for holidays of companies seeking block bookings for business trips. Importantly though, the GDS doesn’t maintain inventories and rates; it is the hotel’s responsibility to do so. The GDS simply passes queries to the end users once they are made. If you want to use the GDS, you sign up with one of the many providers available and they charge you a one-off set-up fee, then charge you what’s known as a pass-through fee of a few pounds plus a percentage when bookings are made. You can only sign up for one provider, so it’s essential to do your research first and make the right choice for you, although you can of course cancel and swap if the one you select doesn’t work for you.

There are different models of the GDS available to sign up for, so we’ll take a quick look at them now. The first is the retail model, whereby your rooms are sold through connected channels (such as bricks-and-mortar travel agents) and they earn a standard commission. Your guests pays you and you then pay the agent.In the merchant model, third party service providers connect you to retail and online travel agents through the GDS, but you pay commission to the OTA as well as the third party provider. This method can therefore be extremely costly to operate relative to the return generated.

Finally, in the opaque model, guests make the booking ‘blind’ – they don’t know they’re staying at your property until after they have confirmed their reservation. This was once really popular when the days of super-cheap package breaks were at their peak, but it seems to have fallen out of favour now, with guests preferring to know where they’re going in order to plan their experience (and perhaps avoid unsafe places).What are the benefits of the GDS ?If you’re already make the most of your marketing efforts, then you might be wondering what the point is of signing up for a GDS.

Actually, although it can seem like just another big expense, there are quite a few benefits available that could boost your revenues.With traditional methods of taking bookings, confirming updates and making changes can take a lot of time and repetitive entries into various spreadsheets and systems. With the GDS, you don’t have to do these tasks manually because it will carry them out automatically and perform updates without you even having to think about them.Another plus point is the fact that GDS should be able to integrate with the software you already have in operation, meaning it will communicate with your computers and shouldn’t require any downtime to get it up and running.One advantage you might really enjoy with a GDS system is the fact that overbooking can be significantly reduced because it instantly updates room availabilities and publishes them across all advertised channels. This is likely to reduce inconvenience for guests and allow you to achieve much better customer service (as well as potentially avoiding bad reviews).

Another bonus when using the GDS is that it allows you to effortlessly maintain rate parity without you having to plough hours into updating your different channels – you just perform one single entry that updates all of your distribution channels and ensures your customers get the same rates wherever they look.Finally, when taking traditional bookings, hotel staff would need to call or send an email to guest to confirm the dates they had reserved and their price. But with GDS, the whole process is automated and the customer’s profile is created and retained for future reference. This means guests get their confirmation immediately and are reassured that their payment has gone through, while the hotel saves a significant amount of time.

As you can see, the biggest advantages to being in a GDS are related to the amount of time it could save you, as well as effort in performing monotonous tasks. The question is whether the outlay is worth the potential rewards for your property.