When you think about how much has changed in the travel industry since it first became popular in the 70s, you might think that distribution channels have changed enormously. That’s not the case, but in 2018 and beyond the industry could see a significant shift in the way bookings are made.
Technology has transformed the travel sector. No longer do tourists need to call up a phone operator to make a booking through a dedicated system, they simply head online and the transaction is complete in minutes. But despite this, the basics of the technology deployed within the sector, including hotel distribution channels, has its roots in technology developed in the 1970s.
With huge improvements being made within the customer journey and booking experience in the last decade alone the fact the basics haven’t changed may be surprising. After all, at the turn of the 21st century, there aren’t many hoteliers that would have predicted that a huge portion of their reservations would be made through mobiles. Or that apps would need to be created and integrated into hotel reservation system software to build on sales.
However, the technology for handling travel sales and transactions between companies that purchase travel for guests has remained almost the same since inception. These systems, known as global distribution systems (GDS) have played a significant role in shaping travel and allowing the industry to expand. The way people book might have changed but online travel agents still use GDS platforms to understand availability and make bookings.
After the first innovative GDS hit the market, many hospitality companies invested in creating their own. But with different interfaces and agents having to go to multiple points to gather all the information needed, it meant the process was time consuming. Today, the sector’s been streamlined with just four companies dominating the GDS market. But could this be about to change?
How are hotel distribution channels changing?
The way the travel sector is using technology and the advancements being made means that ways of working that were put in place decades ago could be changing, and it could affect your hotel reservation system software too.
Firstly, while the market of GDS has shrunk to just four key players, this could be about to shift. The rise of online travel agents has changed the way that people research, compare, and book their travel options. It’s also meant that hotels, airlines, and other industry players have changed their relationship with these companies. Today many businesses have forged direct lines of communication to improve the experience both parties deliver the consumer.
It doesn’t mean that GDS is becoming obsolete but its dominance in the marketplace, and particularly that of the four largest providers, could be set to slip.
Recognising that they could reduce commission expenses and tailor consumer experiences, more hoteliers are looking at direct bookings with a renewed focus. In turn, this is affecting the influence that GDS operators hold. While hotels still need to establish relationships with OTAs, a boost to direct bookings could further reduce the reliance on GDS technology.