In the past 20 years, GDSs and hotels have wrought a technological revolution in the way agents book rooms. As a result, at a time when air bookings through GDSs are falling, hotel bookings through GDSs continue to grow globally.
According to a recent study by hospitality technology company TravelClick, global use of GDSs by agents for booking hotels has grown 14% since 2011, the last time the study was conducted.
The reason, say GDS executives and industry analysts, is that GDSs and hotels have quietly triggered a revolution when it comes to booking lodging.
At the same time, the maturation of airline alliances, which enable agents to book multi-city itineraries on partner airlines, facilitates the booking of hotels, as well.
But most of the reason is due to the improvements in GDS and hotel property management systems and computer res systems.
Bob Offutt, a research director with PhoCusWright, said that 20 years ago, a GDS might display a range of rates for a single hotel, but many hotels did not have the technological capabilities to provide real-time inventory and availability.
So, if a hotel was not paying a premium for direct connect reservations, he said, it could take 24 hours to confirm a reservation.
“Now we have connectivity; we’ve got XML,” Offutt said. The days of having to call a hotel to check if a room is available are long gone.
“Technology makes hotel shopping much more efficient in the GDSs,” he said.
A wider range
John Hach, senior vice president of global product management for TravelClick, said that GDSs have made an effort to get live rates into their systems and are connected directly to hotel customer relationship management systems.
GDSs are also providing a wider range of hotels, including boutique and independent lodging, Hach said. He added that they’re providing more than just the best available rate; they’re also providing value-adds such as free breakfast or free WiFi.
These amenities have great appeal to agents, who are eager to build customer loyalty by providing value their clients can’t get anywhere else. Hotels offering amenities such as free WiFi in the GDS help agents do that, and the TravelClick study found that agents will book one hotel over another in response to messaging about such amenities.
Offutt said hotels have become adept at providing value-adds and incentives through travel agents via the GDSs.
Also important is the fact that agents express confidence that the GDSs have rate parity with hotel websites, ensuring that whatever rate agents offer clients will not be undercut by a hotel’s own direct channel.
Sixty-two percent of agents in the TravelClick study said they would book away from hotels that do not offer full rate parity in the GDS.
Hach said that GDS hotel bookings are growing in the U.S. and in markets such as Asia and India.
He said airline alliances are playing a role, too. As agents book complex itineraries across multiple cities and continents, GDSs provide an efficient way to book hotels simultaneously.
Keith Harrison, global head of hospitality for Travelport, said it takes just a couple of clicks to get from air to hotels in the GDS, and relevant details are pre-populated for agents.
He said the U.S. remains the largest contributor to Travelport’s hotel business globally. U.S. lodging bookings are seeing single-digit growth, Harrison said, noting that percentage is significant because of the large base of business the U.S. represents to begin with.
Travelport is seeing double-digit growth in South America, but he noted that that growth is on a smaller base.
It’s also seeing double-digit grown in Europe, which is a less mature market than the U.S., particularly when factoring in Eastern European countries.
Still, globally, Travelport still sees more air bookings than hotel bookings.
Harrison said that only means that hotels represent a “tremendous” opportunity.
GDSs in general have made major improvements in their hotel programs.
Travelport, for example, has Rooms and More, a Web-based comparison shopping and booking tool with 450,000 unique properties ranging from hostels and B&Bs to boutique hotels and global chains. It delivers pricing from hotels and hotel aggregators.
Follow Kate Rice on Twitter @krtravelweekly.