RezOvation has a GDS connection – that stands for Global Distribution System – and more specifically for a connection that puts a property into one of four systems that provide booking capabilities to both online travel websites and offline travel agents. These four companies are Worldspan, Sabre, Galileo, and Apollo. We provide this service to quite a few of our customers that use our “Desktop” (not “GT”) product. So it may seem like a shock to hear me talk about the “myth” of GDS distribution. GDS can be a great service for some properties, but some properties may not need it. For as many years as I’ve been involved in online travel, small properties have been bombarded with messaging about why they need to be in the GDS. Yet often times after great time and expense, they find themselves in these systems and they see little to no revenue coming from it. I want to share a story about this that will help explain why. This is all based on some happenings at the PAII conference in April of this year when I had a conversation with the owner of a competitive PMS product who just so happened to be right next to our booth, and who gave out a little misinformation about our product.
First – lets get some of the facts straight. We have a connection to the GDS systems for our Desktop product, and we also have a connection directly to BedandBreakfast.com, Expedia, hotels.com, Kayak, Sidestep, and a number of other small sites for our GT product. Our direct connection is to all of these sites “preferred” lodging programs, and we have contracts with every one of these sites that guarantees our properties are placed onto their pages. We have almost 1500 properties live, with photos, bookable, and who are taking reservations on these sites with placement that rivals the larger hotels. I am happy to show anyone the multitude of them. My discussion was with Jeff at Booking Center about their GDS connection and the benefits it provided that he was conveying to a customer. Like a few other PMS companies, Booking Center promotes to properties that if they use their software and GDS connection, they will likely be featured live on major travel websites like Orbitz, Travelocity, and Expedia, usually at a lower cost than if they worked through a direct connection like the one RezOvation provides. Knowing that this is usually not the case, and that major travel websites often no longer display properties that come through this GDS-style connection, I asked Jeff to show me at least one property that they had in the U.S. that was actually on either Travelocity, Expedia or Orbitz and getting bookings.
After some thinking, Jeff came up with the Bodega Harbor Inn, Bodega Bay, CA. This was the only one, and on Travelocity only through the Booking Center GDS connection. Perhaps there are more, but this was the only one he showed us. It could be viewed on Travelocity, but not Expedia or Orbitz. On Travelocity, the display was typical of GDS properties - it had no photo, and Travelocity did not even check its availability. It turns out that Travelocity in this location only checks availability for its direct contract properties – (like the type RezOvation feeds to Expedia for instance) not properties that are loaded through a GDS connection in this way like the Bodega Harbor Inn. So it does not show up like other properties do. In order to check it for availability, a consumer needs to do a second availability check. We did this - and the property did not show available for any date that we checked. This was in early April, and I repeated this same process in early May to verify. Yet, on the properties own website for the same exact dates, they were showing full availability. So the actual property that Booking Center used as an example to demonstrate their GDS connection on major travel websites flat-out didn't work. You can see the screen shots of the availability pages here as well.
This is the myth of GDS distribution that exists out there - that magically as a property if you pay a PMS provider for this service, you wind up on these major websites. If you are considering a GDS connection for the purpose of getting on major travel websites, ask the company selling you on it to show you a number of properties that are live, with photos, and taking bookings on sites like Travelocity, Expedia, Orbitz. If they cannot show you any – then I would not assume you will be the first success they’ve had, considering that companies like Booking Center or RezStream have been advertising these links for years now. Ask them to see a few properties that are live, check the properties website to verify they truly are a customer of the PMS company, and better yet – if you do actually see the property on one of these websites, call them to verify they are getting actual revenue from the website, and at what cost.
The truth is that in order to get on these websites through the GDS, you need to pay your GDS upfront fees (which can easily be $500-$1000 upfront, plus another $500/yr), plus your GDS transaction fees (which are anywhere from $10-15% per transaction) - PLUS pay to be in the merchant reservation program for another 25-30%, and your GDS fees on top of that. Your cost per transaction including all of the upfront and maintenance costs to be in their merchant programs through the GDS are usually 35-45% of a reservation. You also need to sign separate agreements with each distribution website if you want to be in their preferred programs. And there is no guarantee you will get any revenue after absorbing the upfront costs depending on your volume.
A GDS connection can certainly have some real benefits, so I am not writing this to discount the value – we do promote them in a lot of instances. For starters, traditional offline travel agents still use them quite often. If you want to reach these people, then the GDS can be very valuable (even though many agents are starting to book online or use tools provided by online companies like Expedia Corporate for instance). We’ve head from properties that do a lot of corporate business that the GDS is invaluable. If you are in a heavy corporate area, it may be for you. In addition, you might be able to get onto major websites through them at a lower cost – but we haven’t seen a great success rate. Ultimately the major travel websites are pursuing direct links and they are trying to only sell properties that participate in their “merchant model” programs. RezOvation and BedandBreakfast.com are the only two companies that have these types of connections and contracts to date, and we are happy to show you examples from coast-to-coast of successful properties benefiting from tens of thousands of dollars of additional revenue from these programs. Sorry Booking Center – we don’t mean to take shots – but it is time we start getting the truth about these systems out in front of customers. If you have any additional GDS questions, don’t hesitate to shoot me an email at John@RezOvation.com.
Bodega Harbor Inn on Travelocity.pdf (78.69 kb)
Bodega Harbor Inn on Travelocity - Shows No Availability.pdf (21.62 kb)
Bodega Harbor Inn - Their own Website Showing Availability.pdf (18.73 kb)