Hoteliers today have access to a wide variety of marketing and distribution tools. The cloud has provided hospitality professionals with the ideal platform to utilize enterprise-level systems. Any independent hotel today can attract travelers around the world by showcasing their properties on global networks.
There are two ways hotels can go about this – using a channel manager to integrate to OTAs, and the GDS to sell through travel agencies.
Let’s take a look at the two platforms:
Global Distribution System (GDS) –
GDS networks are amongst the oldest distributors of hotel rooms in the industry, so their significance cannot be ignored. The platform can be thought of as the intermediator that connects the suppliers and distributors. Once you connect to the GDS, your rooms are available to travel agents who can them sell directly to their customers – both corporate as well as leisure.
Amadeus, SABRE and Travelport are the largest players in the industry.
You can distribute your rooms on the GDS using any of the three models – the retail, merchant or the opaque model. The retail model enables you to sell your rooms on traditional platforms such as brick-and-mortar stores and travel agents. These travel agents are also connected to the GDS networks and can pick up your inventory from the pool, with commissions paid for every successful booking.
The merchant model allows OTAs to distribute your rooms from the GDS pool, so your inventory is sold by offline as well as online travel agents. This is quite expensive though, as you end up paying a commission to not just the GDS service provider, but even the OTA. While it’s not necessary for your hotel to have a merchant agreement to allow OTAs to sell your rooms, it’s likely that your property will be featured towards in the end of the lists without a paid partnership.
The last is the opaque model – here, guests do not know the specific property they’ll be staying at until after confirming the reservation. Bookings are usually made based on bids by guests.
The GDS is the ideal platform for the smaller accommodation providers, who can utilize the platform to connect to travel agents and corporate clients. Try to avoid the merchant model as it requires that you pay a commission to two parties instead of just one.
Channel Managers & Online Travel Agents (OTAs) –
While the GDS is a fantastic platform to connect your hotel to corporate buyers, the network is used more for other travel related bookings apart from accommodation such as airlines reservations, rentals and so on. In fact, almost 90% of Amadeus’ revenue comes from airline bookings!
These trends point explicitly to channel managers and OTAs. Channel managers are great for displaying your rooms to millions of prospective visitors. They also enable you to control your rates and inventory across all channels on a single point of control. Most channel managers require a monthly subscription plan, just like the PMS – unless you sign up for Hotelogix system, where you get a free-in-perpetuity channel manager with any of our property management plans.
You can learn more about our management and distribution systems here.