GDS System: How They Work, Why They Matter, and How to Choose the Right One

It’s surprising that even frequent travelers who have visited 100+ countries may not be familiar with Global Distribution Systems (GDS). While these systems are vital to the travel industry, they remain largely unknown to the average traveler. For airlines, hotels, and travel agencies, however, GDSs are indispensable, having been used for over 30 years to streamline global travel bookings.

In this article, we’ll explain what GDS systems are, how they work, and why they’re essential for modern travel. We’ll also compare the top GDSs and offer tips on how to choose the best one for your travel business.

What Is a GDS System?

A Global Distribution System (GDS) is an online platform that connects travel service providers—such as airlines, hotels, and car rental companies—with travel agencies and online travel agencies (OTAs). Initially developed for airlines, GDSs have evolved to include other travel segments, offering a centralized system for booking various travel services.

GDSs facilitate real-time availability, pricing, and inventory management, allowing travel agents to search, compare, and book flights, hotels, and car rentals in one place. These systems are critical for managing multi-segment itineraries and integrating with CRM and accounting platforms, making them a comprehensive solution for travel agencies.

How Does a GDS System Work?

GDS systems aggregate data from various suppliers (airlines, hotels, car rental companies) and provide it to travel agents and OTAs. For example, when a travel agent books a flight, the GDS retrieves seat availability, fares, and schedules from different systems and consolidates the information into one user-friendly platform. The travel agent can then select the best options for their customer, book the flight, and reserve hotel rooms or rental cars in one transaction. The GDS system ensures that all booking details are communicated instantly to the airline or hotel, minimizing the risk of overbooking or discrepancies in availability.

Why Are GDS Systems Important for Airlines, Hotels, and Travel Agencies?

For airlines and hotels, GDSs provide a global distribution network, ensuring their inventory is available to travel agents and OTAs worldwide. This expanded reach helps suppliers maximize visibility and revenue. For travel agencies, GDSs streamline the booking process by consolidating multiple travel services into one platform, saving time and effort.

GDS vs. Direct Bookings: What’s the Difference?

Direct bookings are made through an airline’s or hotel’s website, whereas GDS bookings are managed through a centralized platform. While direct bookings allow for better customer data collection and personalization, GDS bookings offer more extensive options, especially for multi-segment travel. GDS systems are ideal for creating complex itineraries, as they allow travel agents to book flights, hotels, and other services in one place.

Top GDS Systems: A Comparison:

There are several GDS systems in the market, each with its strengths. Here’s a look at the top contenders:

1. Amadeus: Known for its strong presence in Europe and Asia-Pacific, Amadeus leads the market in airline bookings and offers advanced AI and NDC capabilities for personalized travel packages.

2. Sabre: A North American giant, Sabre excels in air travel bookings and is investing in blockchain technology for secure transactions.

3. Travelport: A global player with a balanced reach, Travelport is known for its mobile-friendly solutions and digital transformation focus, making it ideal for agencies seeking top-notch mobile booking experiences.

How to Choose the Right GDS for Your Business:

Choosing the best GDS system depends on several factors, including your business size, the types of services you offer, and your target market:

• Business Size: Large travel agencies often prefer full-service GDSs like Amadeus or Sabre, which offer extensive networks, multiple booking tools, and CRM integration. Smaller agencies may opt for third-party solutions with integrated GDS functionality to reduce costs.

• Service Focus: If your agency focuses on air travel, Amadeus and Sabre are excellent choices. For agencies needing multi-segment options (flights, hotels, cars), Travelport provides comprehensive solutions.

• Geographic Reach: Amadeus is dominant in Europe and Asia-Pacific, while Sabre leads in North America. Travelport has a more balanced global presence.

• Future-Proofing: If you’re looking to future-proof your business, consider a GDS that is actively investing in new technologies like AI, blockchain, and NDC (New Distribution Capability). Amadeus, Sabre, and Travelport are all making strides in these areas.

Costs Associated with GDS Systems

Implementing a GDS system involves several costs, including setup fees, transaction fees, and ongoing subscription fees. The setup cost can range from $10,000 to $50,000, while transaction fees typically range from $3 to $12 per booking. Subscription fees can range from $200 to $1,000 per month, depending on the size of your business and the volume of bookings.

Alternatives to GDS Systems

If a GDS system isn’t the right fit for your business, there are alternative options, such as:

• Third-party travel APIs
• Travel aggregators like Expedia or Skyscanner
• Affiliate programs with large booking platforms
• Direct partnerships with travel suppliers
• White-label booking solutions

Conclusion

GDS systems play a crucial role in modern travel distribution, offering travel agents and OTAs a streamlined way to access and book a wide range of travel services. By choosing the right GDS system for your business, you can enhance your booking capabilities, improve customer satisfaction, and increase your revenue. Whether you’re a large OTA or a small travel agency, there’s a GDS solution that fits your needs.