What is GDS? – A Simple Guide For New Travel Agencies

November 1, 2019
Global_Distribution_System-Travel-Agencies-Guide

Many travel agents around the world are using the Global Distribution System (GDS) as their major booking channels. It is also responsible for the significant growth of the travel industry.

If you are brand new to the travel business, you will be probably wondering what a GDS is and why GDS is much important to develop travel agents website

In this blog, we are going to explore about GDS, its importance in the travel industry and what the future looks like for this primary reservation tool.

What is GDS?

Global Distribution System (GDS) is the brain of the travel industry. It is a computerized network system which provides real-time information to companies such as airlines, hotels, car rental and travel agencies. Each of these sectors uses GDS to view real-time inventory of services offered in the travel industry.

For example, using GDS, a travel agency can find the availability of hotel rooms, flight seats or cars on behalf of their clients and book through the same GDS. 

If you like to learn more about how a GDS works, take a look at this video.

How Do Travel Companies Use GDS?

Travel companies use GDS to find the best airline ticket, car rental, hotel rooms, etc. for their clients. Information is customized and by the travel companies based on the preferences and itinerary.

When a traveler requests information from a travel company, the agent will find the most accurate and cost-effective itinerary. Travel companies are charged every time they access the GDS or they can buy a particular software offered by the GDS on a yearly basis. Also, an average person can never access the GDS without the help of a travel agency or a vendor.

Evolution of GDS

The airline industry created the first GDS in the 1960s to track flight schedules, availability and prices. In fact, the GDSs were actually among the first companies that aided B2B e-commerce in the world. They were used by the airline industry to automate the booking system, but, later travel agents were also given access.

These are some of the major GDS systems in the industry.

Name of the GDSFounded inFounded byHeadquartersNo of employeesRevenue
Amadeus1987Air France, Iberia, Lufthansa and SASMadrid, Spain16,785€4.9439 billion (2018)
Travelport (Subsidies include - Apollo, Galileo, and Worldspan)2001Founded through the acquisition of Galileo International by TDS's parent, Cendant CorporationLangley, Berkshire,UKApproximately 3,700US$ 2.5 billion (2018
Sabre1976Initially founded by American Airlines. Currently, Sabre is a separate entity owned by AMR CorporationSouthlake, Texas, United StatesAround 10,000US$3.87 billion (2018)

Apart from these famous GDS systems, there are other smaller regional GDS systems such as Travelsky, a state-owned company in China and; KIU System, a PSS and GDS used in Latin America.

What Are the Benefits of Using GDS?

GDS will be the most important channel of distribution for airlines, hotels and car rental companies. Here are some of the major benefits of using GDS.

  • Effective in attracting international travelers
  • 24/7 access to inventory
  • Enables business models such as retail travel agency and OTA (Online Travel Agency)
  • Offer consumers increased pricing transparency
  • Travel agents can get a global platform with a strong market penetration
  • Provide best rates to your customers which no other system can provide
  • Place travel services to many clients without affecting your marketing budget

Frequently Asked Questions About GDS

1. How can I start using a GDS?

To use a GDS, you have to be a professional travel agent. For that, you must have a proper industry ID such as an ARC (Airlines Reporting Corporation) or IATA (International Air Transport Association) number. Without this number, airline agencies will not know where to send your commission payments. Moreover, airline agencies will not allow unaccredited agents to issue tickets.

If you don’t want to get this certification, you can have a tie-up with an ARC or IATA host company who can book tickets on your behalf.

Some airlines will not allow you to issue tickets even if you have a full IATA license. To be on the safe side, before you sign for the GDS, make sure you talk to the particular airline to ensure if they will deal with you.

2. How much does it cost to use a GDS?

It depends on the specific service you want to use in the GDS. For example, if you want to use Amedeaus’s Flight booking software, they may sell it to you for $150-$160/year (contact the GDS provider to know the exact amount). The software will allow you to reserve tickets on any airlines.

3. Do I need a GDS?

If you are a travel agent who falls under the below category, a GDS will be useful for you.

  • A corporate travel agent who books on behalf of corporate clients or an individual working at a corporation who needs to book flight tickets for all their employees
  • Complex itinerary agents who have steady clients with multiple travel plans
  • High volume booking of air-only travel

If you are a leisure agent who doesn’t book air tickets multiple times in a day, you probably don’t need it.

What is the Future of GDS in the Travel Industry?

The traditional role of GDS is changing and being challenged by the changes taking place in the travel industry. Many online travel websites and airlines are pushing and encouraging consumers to make bookings directly via their website. Some airlines are charging additional fees for tickets purchased via the GDS when compared to the pricing in their own website.

Some industry experts predict that GDS can turn into a direct corporate booking tool rather than a booking tool for travel companies.

For example, Southwest Airlines do not work with the GDS Company Worldspan; Sabre is used by American Airlines; PARS by USAir; TravelSky by Air China; and Worldspan by Delta. If you are an agent who uses WorldSpan, you cannot book with Southwest Airlines or you need to look for pricing directly on their website. Another newsworthy information is, agreements signed between airlines and GDS is on a renewal basis. Many in the travel industry are wondering if the airlines will renew their relationship with certain GDSs.

While changes will continue to impact the future growth of GDS, there will definitely be a role for them. Hopefully, they continue to evolve as they did from the old techniques in the 1950s.

We hope that you learned something new about the travel industry. Keep checking our blog section as we plan to further dismantle the ever-changing world of travel.

Do you have any questions? Feel free to reach our travel solution experts at ColorWhistle anytime. We are always happy to help.

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About the Author - Anjana

I’m a full-time Copywriter at ColorWhistle managing content-related projects. I also write about website technologies, digital marketing and industries such as travel. Plus, I have an unhealthy addiction towards online marketing, watching crime shows and chocolates. Mmmmm…chocolates!

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