2014 Business Travel Survey: GDS Booking Volumes Still Rising

Insights and Commentary:

All of the big three global distribution systems were still expanding as well as increasing productivity and revenue as of June 2014. Amadeus, Sabre and Travelport have each made significant moves in the hospitality industry, although primarily for airlines.

Amadeus is by far the largest and currently most successful GDS with the highest profit, booking volume, and market share (air travel). As of 2014 Southwest Airlines was their biggest client, but they provide GDS services and access to over 100 other airlines as well.

Sabre is second best to Amadeus. The company elected to go public in 2014 and since then their billable bookings, booking share and growth have all increased modestly. During the same year they gained American Airlines, newly reformed at the time, as a client. Presently, the company expects continued improvement in revenue.

Travelport has made the decision not to compete directly with Amadeus or Sabre in that they have chosen not to provide “full passenger services systems to airline on a multi-host basis.” However the company is still working closely with Delta Airlines and researching “add-on” features with their main focus being the continued growth of “beyond air” activities.

Honestly, I was shocked that Amadeus is the largest and most successful GDS. I truly expected it to be Sabre. This belief was based on what I have personally experienced: every OTA I have used required a link to the Sabre GDS, but I can only recall one that required one to the Amadeus GDS. After reading the chapter 8 of D.V. Tesone’s “Hospitality Information Systems and E-Commerce, along with a few research reports I have changed my paradigm.

Regardless, GDSs are still used widely in the hospitality industry. Different segments of the market prefer to book in different ways: via offline Travel Agents, OTAs, hotel websites or on the phone. Those that use either form of TA are using a GDS.

Leisure guests tend to book for themselves with rare exceptions including some forms of international travel and cruise travel. These guests use OTAs or intermediaries such as Travelocity (Owned by a GDS company) or TravelZoo. In the case of TravelZoo, a guest uses the TravelZoo website to access information such as availability and pricing that TravelZoo pulls from a GDS before making a selection and processing a transaction.

On the other hand, business and corporate travelers are more likely to use an offline TA. An offline TA is better equipped to meet the needs of a customer whom is travelling for business. Offline TAs require less information when booking a hotel room then an OTA does, making it simple for a secretary to book the travel arrangements for the guest. In addition, offline TAs can work easily with a hotel to make special accommodations. The hotel receives contact information for the travel agency that booked the stay in case clarifications on requests are needed.

In conclusion, as long as either form of TA is in the market, a GDS will be necessary to streamline bookings and ensure that each TA has the correct pertinent information when making a booking or completing a transaction. As a result, as new OTA options or hospitality enterprises enter the market GDSs are continuing to morph, merge and grow.

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