In the 20 years I have been working with the GDS for independent hotels I have experienced the most diverse approaches and ways of looking at the GDS.
Today I want to make my own small contribution to try and shed some light on this by starting with the simplicity of the concepts behind them:
GDSs were created to fill a gap that existed in manual flight bookings. However, we move on to the complexity of the superstructure that makes them work. Imagine sixty years ago the difficulties of designing and implementing a network of remotely connected computers capable of selling seats on planes unambiguously and immediately. This is what SABRE achieved in 1961 on a commission from American Airlines, followed over the years by other systems up to the current SABRE, AMADEUS, GALILEO and WORLDSPAN (the latter two more recently acquired by Travelport).
Inspite of the constant declarations of imminent death that I sometimes read, the 4 above continue to be decisive and not only for the huge mass of hotel bookings they move, but also for all airline ticketing.
Few people know (and I admit that they don't even want to know) that most of the flights that are bought via the Internet originate from the GDS.
This is often the case for hotel rooms too: OTAs, online travel agencies or booking portals, self-booking apps from the big agencies, all draw on the infamous GDS.
That is why it is so important to be there and to move correctly.
1. how much does it cost?
2. how many bookings will it bring me?
Question 1: GDS distribution as we understand it does not have a price set in stone, for each hotel we define a tailor-made contract.
I generally answer this question by taking as an example the question that hoteliers themselves sometimes hear: how much does a room in a hotel cost?
You don't need to be a revenue expert to answer that it depends on many factors such as demand pressure for that destination in that period, do you need a room for one night or 4 rooms for 5 nights, or a room linked to a conference with meeting rooms and business lunches?
Question 2: It seems obvious to explain that the future turnover cannot be guaranteed by anyone, but I am a lover of the practical application of the obvious and prefer to repeat a well-known concept: I cannot know.
Much more serious is to start from the consolidated, and therefore certain and real, data of a set of other similar structures, to arrive at an advice on how to move in the sea of RFPs or climb the mountains of Consortia, choosing the most effective one for the hotel in question.
I also explain that distribution needs to be looked after like a vegetable garden: sowing in the right soil and with the right exposure, watering at the right rate levels, fertilising with agreements and RFPs, all with the right collaborators.
This is also an important concept: the right partner to work on the GDS.
If I am a hotelier I have to make some considerations:
- If I'm part of a chain: distribution is centralised like almost all activities, that's it.
- If I'm associated with a brand: I need to know that the share of fixed costs (which the GDSs always have, no matter what is said) is drowned in the participation fees. The variable part is sometimes reduced to a minimum because the largest share is in the percentage that the brand collects on all bookings, GDS or not; other times the GDS variable of the brands is within market levels.
- If I use an independent distributor: I have to make sure that it is neutral. There are distributors who are an offshoot of travel agency networks that end up facilitating the work of their own agencies rather than helping the hotel's turnover.
- I also make sure that it is focused on the turnover it brings to the hotel. A distributor who is 'only' an extra element in order to expand the range of services to be sold is not likely to provide the level of service and collaboration I expect, precisely because as such he is marginal in the economy of the larger company to which he belongs.
- What about service? I choose a partner who can guarantee to help me and my staff in the hotel in the simplest and most immediate way. If I have to open a ticket online and wait for them to write to me (perhaps with an 8-hour time difference), I probably choose the closest partner who will answer the phone and help me. Better still, if he organises a new training session for me whenever I need it.
- But mine staff is used to the old Channel Manager ... I look for a GDS partner who can connect XML 2-way to the CM or PMS and I don't succumb to the flattery of those who would like to place the suite of tools and services at a high value and who for good measure also add the GDS connection (the marginal service mentioned above...).
1. Exclusivity. I fully agree with the pragmatism of the Americans here. You can only be on the GDS with one operator.
If my name is Hilton, I will have one of the chain codes linked to the Hilton world; if I am associated with a brand, I will have a single hotel card with the chain code of Holiday Inn or Best Western or Preferred or Small Luxury and so on. If I am independent I will have the chain code of my distributor, a technical code that does not identify a chain but the technology I use (it must be said that many brands use the same technology, when it is of quality).
2. Correctness of data. What I say in the data sheet of my hotel, as well as the guarantee or cancellation rules and not least the prices, are gold for an agency that is booking the room on the basis of what it finds on its GDS terminal.
3. Passenger protection. A misunderstanding can happen, without going back to the 1980s when people lived off overbooking, when bathroom pipes broke every day. If you go into overbooking, you have to manage re-routing. It is part of the rules and the hotelier must be informed of his commitment before he starts selling on the GDS.
4. Consistent management of commissions. It is sacrosanct that a travel agent gets his commission. Why should it work for free? This issue of agency commissions is a thorny one that deserves its own article.
But I immediately add "not for all types of hotels", let's evaluate together your structure and its potential, I'll give you the tools to decide.
Finally, I know of an Italian partner who uses the best technology of the first multinational GDS, who has made GDS distribution for independent hotels his main activity for 17 years, who works with hoteliers in the same direction and provides direct telephone assistance.
