In the travel industry, lots of jargons such as CRS, GDS, Metasearch Engines, OTAs and Sharing Economy Platforms have surfaced.
If you are planning to enter the travel industry or travel agency it is important to understand the difference between these terms. It will help you to gain more online visibility and sell your services effectively to travelers.
To clarify your confusion, we will explain the difference between all these terms in simple words
Let’s dive in.
1. GDS (Global Distribution System)
A global distribution system is a huge database that stores and updates enormous information about inventory and hotel rates to travel agents and travel websites. This system is responsible for the extensive growth of the travel industry and was the stepping stone of most internet based travel services.
Through this system, travel agents/agencies can access real-time availability, price and offers of flight tickets, hotel rooms, rental cars, cruises, ferry reservations, trains and other services. When compared to public rates, hotels sell their rooms 30% cheaper on GDS.
Global Distribution System (GDS) is a costly channel that mainly lets the sale of rooms in large numbers to big companies and travel agencies. So, small agencies don’t need GDS.
Top GDS in the world
- Travelport (Galileo, Apollo, Worldspan)
2. Computer Reservation System (CRS)
A Computer Reservation System (CRS) or central reservation system is an automated reservation that is used to store information, retrieve information and conduct transactions related to air travel. The system was originally designed to be used by airlines and was later extended for the use of travel agents. These days, it is also used to store and distribute information about tourism products or services to the public.
GDS and Computer Reservation System (CRS) have the same functions but, CRS only provides information about airlines. With GDS, you can reserve a ticket, book a room or rent a car. This is why they are known as Global Distribution System because you can reserve everything with GDS.
The term CRS is not much used as it became part of a bigger system known as the Passenger Service System (PSS) which comprises of CRS, an airline inventory system and the departure control system (DCS).
Examples of CRS
- Hewlett Packard’s EDS
- SabreSonic or Altéa (Sabre)
- Navitaire (owned by Amadeus)
3. Online Travel Agents (OTAs)
Online Travel Agents (OTAs) is a place where travelers can get access to a whole range of travel services such as accommodation, flights, travel packages, car rentals, tours and activities. Unlike travel metasearch engines, users can directly book through OTAs.
Travelers usually find these websites useful as they can easily compare rates, reviews, and availability of accommodation options at one glance. Any hotel can easily be listed on an OTA without any charge. They just have to add hotel photos, proper descriptions, rooms, rates, etc. Although appearing on an Online Travel Agencts (OTA) is free of charge, hotel owners have to pay a commission of 15%-20% when a booking is confirmed via an OTA.
Most of the OTAs make a huge investment in online marketing. So, we recommend hotels to have a presence in OTAs as they amplify the chance of reaching potential travelers locally and from around the world.
Top 5 OTAs
- Yahoo! Travel
4. Travel Metasearch Engines
A metasearch engine is a tool that aggregates date from other search engines and produces results to the user. In the travel industry, the metasearch engines aggregate rates and availability of hotels from different sources mainly from OTAs and sometimes directly from hotels. This makes things quite easy for users. All they have to do is find the type of hotel they want, enter their journey dates and compare the different options.
Metasearch engines do not do the actual booking; they just list the price and availability. When you select a particular hotel, you will be redirected to the OTA in which the fare was displayed to make the actual booking.
As far as the business model goes, travel metasearch engines earn revenue through completed transaction referred through the search engine. It also earns money by placing ads for travel agencies through CPC (cost per click) or CPI (cost per impression) model.
Famous Metasearch engines
- Google (with Google Hotel Finder)
5. Sharing Economy Platforms
Sharing economy platforms is a type of OTA which carters for apartments/holiday home rentals, small single property operators and large groups. It is a perfect solution for those who want to save money when traveling.
Many travelers prefer to stay on a shared basis as they are cheaper than commercial space like hotels, more personalized and give travelers an opportunity to live in local neighborhoods. This accommodation sector is a new way which solves the short and longer stay needs.
Examples of sharing economy platforms
- Travelling Frogs
Keep your Travel Business Moving Forward via These Channels
More than ever, travelers are using the internet to plan their getaway. Therefore, every business linked with travel must work towards establishing a strong online presence.
Travelers type in many search terms and go through several websites to book their accommodation. So, if your name pops-up frequently, there is a 90% chance of receiving more bookings.
The world of traveling is changing quickly. Knowing what is going on in the industry will put you in a position to make better decisions.
Make use of the channels mentioned in this blog to grow your direct sales.
Which channel are you using to grow your travel business? Do share them in the comments section below.