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Required Reading

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March 01, 2010
Required Reading
Geneva Rinehart - geneva@hospitalityupgrade.com

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The Role of the GDS in the Global Travel Industry  Provided by PhoCusWright
An Excerpt

The e-commerce revolution of the 1990s brought about a breakthrough in business and a deep and lasting transformation in the way consumers research, shop and buy. From music to mortgages, discount toys to high-end electronics, just about anything and everything is available for purchase online.

Most people associate the birth of electronic travel distribution with the advent of the Internet and the explosion of e-commerce in the late 1990s. But in fact, electronic commerce in travel pre-dates the dot-com boom by some three decades and had become quite commonplace by the mid-1980s. The technology systems powering electronic travel commerce were then referred to as CRSs, or computerized reservation systems. They were the predecessors of today’s global distribution systems, or GDSs.

The GDSs have traveled far in the past four-plus decades. The three major GDS companies today power the critical reservations and technology infrastructure of over 163,000 travel agency locations and enable bookings by nearly half a million travel agents around the globe.

The GDSs generated more than $9.6 billion in revenue and more than 1.1 billion transactions in 2008. That equates to just over 2,100 transactions per minute. The GDSs are most often thought of as a distribution environment for airlines; more than 550 airlines and the overwhelming majority of commercial airline fares and inventory are accessible via the GDSs. However, they also deliver an ever-expanding array of content to online travel agencies and traditional brick-and-mortar travel agencies. More than 90,000 hotel properties, the world’s largest car rental companies, hundreds of tour operators and the major cruise lines distribute their products to travel agencies via the GDSs.


Key Findings
The transactions processed by the GDSs represent a significant share of the global travel industry:
The GDSs processed more than 1.1 billion transactions in 2008, representing over $268 billion in global travel sales.

In the U.S., GDS transaction value represented more than one-third of all travel supplier revenue in 2008; GDS air transactions accounted for nearly two-thirds of all airline passenger revenue in 2008.

GDS transaction value in Europe represented more than one-fifth of all traveler supplier revenue in 2008; GDS air transactions accounted for nearly half of all airline passenger revenue in 2008.

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