What is a global distribution system?
A global distribution system (GDS) links reservation inventory under one computer-based network. The most common uses for GDSs is in the tourism industry, mainly for airlines, hospitality companies, and car rental companies. In this way, service providers, such as travel agencies and online travel agencies can all sell tickets for the same flight, hotel, or car rental.
How does a global distribution system work?
Global distribution systems are an intermediary between vendors, such as hotels and airlines, and service providers, such as online travel agencies. While most big GDSs are linked to the major travel agencies, smaller, less expensive GDSs may offer a limited amount of travel agencies.
Vendors sign up and link their own inventory to a global distribution system. Once linked, customers can use the different portals associated with the GDS to purchase from a vendor. To avoid overbooking, each service provider receives real-time updated inventory from the airline or hospitality company (vendor).
Not only do vendors show their inventory, but they can automatically update products and rates. This allows vendors to use a dynamic pricing method that immediately changes over all of their portals.
Who uses a global distribution system?
The most common users are both online and traditional travel agents. Global distribution systems allow travel agents to automate the process of verifying availability with vendors.
Is a GDS a computer reservation system?
A computer reservation system is operated by the original vendor, usually an airline or a hotel. However, a GDS only shows the vendor’s inventory. All actual purchases are made through the vendor’s computer reservation system.
Does it cost to be a part of a GDS?
Airlines and hospitality companies pay a fee to be a part of a GDS. This can often mean that customers get a better deal when purchasing directly from the vendor. It also leads to many vendors investing in their own selling portals in order to avoid GDS admin costs.
However, many vendors value being part of a system as more valuable than the cost. This type of vendor signs up with many GDSs to show their inventory in a maximum number of portals.