Global Distribution Systems in Hospitality Industry

Global Distribution Systems (GDS)

• Global Distribution Systems (GDS) are computerized reservation networks that provide a single point of access for reserving airline seats, hotel rooms, rental cars, and other travel-related items by travel agents, online reservation sites, and large corporations.

Introduction to GDS

• GDS emerged as a result of globalization, which has led to the integration of communication and services in the hospitality industry.
• Other names for GDS are Automated Reservation System (ARS) and Computerized Reservation System (CRS).

Background of GDS

• There are four major GDS companies: Amadeus, Galileo, Sabre, and Worldspan.
• The first GDS was created in the 1950s and became functional in the 1960s to keep track of commercial airline flights and availability.
• GDS systems were some of the first electronic commerce businesses, initially owned and operated by big companies, including airline companies.
• Smaller GDS companies exist, but they are local to specific regions.

Capabilities of GDS

System Platform Capabilities

• GDS systems are operational 99.9% of the time and can handle up to 17,000 messages per second during peak traffic times.
• They use advanced enterprise systems architecture, allowing for fast response times and the ability to make large numbers of reservations quickly.
• GDS systems can use over 1 billion fare combinations and have access to over 95% of available seats worldwide, representing over 750 airlines, 50,000 hotels, 400 tours, and 30,000 car rental sites.

Benefits of GDS

• The overall purpose of GDS is to provide access to a worldwide distribution network, linking buyers to sellers and allowing reservations to be made quickly and easily.
• GDS systems benefit travel agencies by improving their business efficiency, reducing errors, and providing better customer service.
• GDS systems can find the cheapest prices, which is a strong advantage to businesses and customers, encouraging competition among airlines and promoting economic growth.

Major GDS Systems

Sabre

• Sabre is one of the oldest GDS systems, operational since 1960, and has been acquired by AMR (American Airlines) in 1996.
• Sabre has access to businesses in 45 countries and acts as a provider of technologies and innovative research for the travel sector.
• Sabre has products for travel commerce and improving airline/supplier operation capabilities, focusing on logistical efficiency.
• Sabre owns Travelocity.com, Get There, and has a strong focus on optimizing the value chain for the travel industry.

Amadeus

• Amadeus is the youngest GDS system, created in 1987 by four airline companies (Air France, Iberia, Lufthansa, and SAS).
• Amadeus has partnered with companies such as Datalex, Digital Travel, Kinetics Inc, OpenTable.com, and Viator, providing e-business frameworks and services for global travel companies.

Galileo International

• Galileo International was created in 1971 by United Airlines, initially for internal company use.
• Galileo expanded to additional markets in North America and Japan in 1976 and created the Apollo Travel Services (ATS) division.
• The ATS division separated from Galileo International in 1986, and the modern Galileo platform was created in 1993.

The Grand Tour

• Participants travelled throughout Europe to experience cultures and acquire knowledge through arts and sciences
• They visited various locations in France, Switzerland, Italy, and Germany for extended periods

The Mobility Era (1800-1944)

• Characterized by increased travel to new and familiar locations, both near and far
• Factors contributing to this era: • Growing economic prosperity • Advent of leisure time • Availability of affordable travel
• Industry activities increased with new roads, stagecoaches, passenger trains, and sailing ships
• Thomas Cook introduced the tour package in 1841, making travel accessible to the general public

The Advent of Automobiles and Air Travel

• Introduced individual freedom to travel, opening new horizons for millions
• Henry Ford's mass production of the Model T in 1914 contributed to this development

The Modern Era

• Characterized by a desire to immerse in destinations and give back through educational and volunteer programs
• Widespread Internet access, opening of previously closed international borders, and increased wealth and mobility have opened new venues for travellers
• Challenges facing the industry: • Terrorism • Political and economic instability • Health scares • Increased security efforts

Tourism Generating and Receiving Areas

• Factors influencing demand from generating areas: • Economic determinants (personal income, distribution of income, value of currency) • Social determinants (demographic variables, age structure, education level, family life cycle, holiday entitlements) • Political determinants (government tax policies, controls on tourist spending)

Economic Determinants

• Personal income affects tourism demand, as higher income increases demand
• Distribution of income within a region affects tourism demand and supply
• Exchange rates highly influence tourism demand, with variations affecting the cost of a holiday
• Economical options are often preferred to manage travel costs

Social Determinants

• Demographic variables (age structure, education level) influence tourism demand
• Family life cycle (availability of time and disposable income) affects tourism demand
• Holiday entitlements lead to an increase in demand
• Other social factors influencing demand: • Home ownership • Occupation • Ethnic group • Crisis and threats (terrorism, epidemic diseases, natural disasters)

Political Determinants

• Government policies and controls on tourist spending influence demand and supply
• Examples of government approaches: • Exchange control • Currency export • Prohibition • Taxation • Visa regulations

Geographic Factor

• Seasonality affects tourism demand and supply, leading to: • Peak season: high occupancy rates, price increase • Off-peak season: low occupancy rates, price decrease, seasonal unemployment

Global Distribution System (GDS) in the Hotel Industry

• A GDS is a worldwide reservation system that connects travel bookers and suppliers (hotels, accommodation providers, and travel services) to facilitate automated transactions.
• It provides live product, price, and availability data to travel agents and online booking engines.
• GDS is used to tap into the corporate travel market, offering a convenient interface for users to book hotels, flights, and car rentals.

History of GDS

• The history of GDS dates back to the 1960s, when an inefficient manual method was used to track flight schedules, availability, and prices.
• Companies that utilized GDS were pioneers in business-to-business (B2B) electronic commerce, now known as ecommerce.

Functionality of GDS

• GDS can book airfare, hotels, rental cars, cruises, rail tickets, and tours.
• It allows travelers to book an all-inclusive holiday package with just a few clicks.

Difference between IDS and GDS

• IDS (Internet Distribution Systems) refers to internet portals that offer hotel reservations, focusing on online marketing of travel, hotel, and related services directly to users.
• IDS allows travelers to build whole packages and trips, combining flights, hotels, transportation, and more.
• GDS passes on hotel inventory and rates to travel agents and travel sites, accepting reservations.

Difference between GDS and CRS

• GDS links hotels' inventory to business travel agents and networks.
• CRS (Central Reservation System) is operated by the original vendor (e.g., hotel) and connects hotels directly to customers through metasearch engines, websites, and OTAs.
• GDS acts as a middleman between a travel agent and a hotel's CRS.

The Main 'Big Three' Legacy GDS Systems

• Amadeus
• Travelport (owns Galileo, Worldspan, and Apollo)
• Sabre

How GDS Works in Travel

• Hotels and travel entities use technology solutions to tap into all GDS, including Amadeus, Galileo, Sabre, and Worldspan by Travelport.
• Live rates and availability are sent from a hotel's PMS (Property Management System) directly to the GDS and online booking websites via a channel manager.
• The network is used by a range of travel suppliers, including airlines, hotels, tour operators, rail carriers, car rental outlets, and cruise lines.

Benefits of a GDS for Your Hotel

• Increases hotel bookings and revenue through placement on more 'supermarket shelves' globally.
• Captures international corporate travelers.
• Provides coverage, revenue, and expanded distribution network.
• Offers little maintenance required, simple easy interface, and connectivity.
• Provides 24/7 visibility and increased bookings from travel agents worldwide.

Travelport GDS

• Comprises the Apollo, Worldspan, and Galileo global distribution systems.
• Has a smaller market share compared to the other 'big three' GDS companies.
• Is beneficial for hotel owners to distribute their services to travel agencies worldwide.

Galileo GDS

• Gives hotel owners the ability to distribute hotel rooms and availability to travel agencies globally.
• Offers 24-hour access to inventories and information.

Worldspan GDS

• Is part of the Travelport GDS platform.
• Provides travel distribution, technologies, and services for thousands of travel companies worldwide.
• Offers similar functionality to other GDS systems but with unique differences.

Choosing the Right GDS for Your Hotel

• Consider the system's presence in markets where your guests come from.
• Evaluate the system's functions and features.
• Check which travel websites the GDS connects to.

Types of Business Organizations in Travel and Tourism

• Two main types of organizations: Private sector and Public sector
• Private sector: includes private limited company, partnership, limited liability partnership, sole proprietor, and franchise
• Public sector: includes government controlled, local government controlled, and membership organizations

Private Sector

• Private companies produce goods and services to make a profit for owners and shareholders
• Example: Marriott International, Inc, an international hospitality company formed in 1927
• Private limited company: shares are not traded on a stock market, may only be sold if other shareholders agree
• Capital in a private limited company is contributed by owners, shares cannot be issued to the general public
• Maximum of 50 shareholders allowed, growth may be limited

Public Sector

• Organizations run by the government, deals with production, ownership, sale, provision, delivery, and allocation of goods and services
• Plays a vital role in publicity, promotes destinations, and provides services to encourage tourism development
• Can raise funds by selling shares to the general public
• Has a board of directors elected by shareholders and managed by the board
• Development of tourism infrastructure requires heavy investment in public utilities like power, water, gas, and transport

Stages of Tourism Development

• 3 Development: large numbers of visitors arrive, local involvement and control of development declines
• 4 Consolidation: tourism becomes a major part of the local economy, rate of increase of visitors declines
• 5 Stagnation: peak number of visitors reached, capacity levels for many attractions and facilities exceeded
• 6 Decline: destination can no longer compete with newer attractions, faces a declining market
• 6 Rejuvenation: renovation phase or reintroduction of the product with new features phase

Butler's Model of Tourism Development

• 3 Development Stage: high numbers of tourists, heavy advertising, local involvement and control of tourism declines
• 4 Consolidation Stage: tourism growth slows, area's economy tied to tourism, marketing and advertising wide-reaching
• 5 Stagnation Stage: visitor numbers have reached their peak, carrying capacity reached or exceeded, environmental, social, and economic problems
• 6 Decline Scenario: unable to compete with newer tourism attractions, tourism facilities replaced by non-tourism activities
• 6 Rejuvenation Scenario: requires a complete change in tourism attractions, previously untapped tourism resources may be found

Types of Catering

• Institutional catering includes staff cafeteria canteen, which is a self-service catering system with limited menu choices, usually provided by a company for its employees.
• Tray catering is a food service designed for hospitals and old folks' homes, where meals are served on a tray according to different dietary needs of patients.

Characteristics of Tourism and Hospitality Industry

• Inflexibility: The tourism industry has a fixed capacity in terms of hotel rooms, airline seats, and restaurant tables, making it difficult to meet sudden surges in demand.
• Perishability: Tourism products are consumed as they are produced, and if not sold, the opportunity to sell is lost forever.
• Inconsistency: The tourism industry has a high level of inconsistency, as the actual experience of consuming a product or package can vary greatly from one person to another.
• Intangibility: Tourism products are experiences that cannot be touched, and once they have taken place, they can only be recalled and relished.

Tourism Sectors

• Accommodation: includes hotels, resorts, and other forms of lodging
• Food and Beverage: includes restaurants, cafes, and other eateries
• Adventure Tourism: includes activities such as hiking, skiing, and water sports
• Transportation: includes airlines, buses, trains, and other forms of transportation
• Attractions: includes museums, theme parks, and other tourist attractions
• Travel Trade: includes travel agencies, tour operators, and tour guides
• Events and Conferences: includes conferences, meetings, and other events
• Tourism Services: includes business tourism providers and other related services

Entertainment Tourism

• Entertainment has been an essential part of human life, from storytelling to modern forms of entertainment such as casinos and theme parks
• Trends in entertainment tourism include:
  • Traveling to experience traditional forms of entertainment
  • Entertainment and leisure activities are top priorities for tourists
  • Casinos, pubs, and bars are popular attractions
• The entertainment sector can be categorized into different segments, including:
  • Theme parks: aim to create an atmosphere of another place and time, with a dominant theme
  • Amusement parks: aim to amuse guests with rides and games
  • Casinos: provide gaming opportunities for tourists
  • Cinemas: show movies and artistic displays
  • Performing arts: include live performances, such as theatre and dance
  • Sporting events: include mega sporting events such as the World Cup and Olympic Games

Four P's of an Entertainment Attraction

• Product: what to market, including the type of attraction and what it offers
• People: targeted customers, including demographics and preferences
• Place: location of the attraction, including accessibility and seasonality
• Promotion: how to promote the attraction, including marketing strategies and advertising

Tourism Impacts

• Tourism impacts can be categorized into three: economic, socio-cultural, and environmental.
• Impacts can be positive (beneficial) or negative (detrimental) and depend on the value and judgment of the observer.

Economic Impacts

• Positive economic impacts:
  • Foreign exchange earnings
  • Contribution to government revenues
  • Generation of employment
  • Balance of payment/trade account balance
  • Stimulation of infrastructure investment
  • Enhancement of local environments
• Negative economic impacts:
  • Inflation
  • Opportunity costs
  • Dependency
  • Seasonality
  • Leakage
  • Enclave tourism
  • Seasonal character of jobs
  • Prostitution

Environmental Impacts

• Positive environmental impacts:
  • Tourism acts as a force of conservation, offering an alternative economic use.
  • Draws attention to issues relating to biodiversity, endangered species, and human impact on the environment.
• Negative environmental impacts:
  • Inappropriate development
  • Loss of natural habitat and effects on wildlife
  • Pollution
  • Loss of spirit
  • Overcrowding and traffic congestion
  • Activities affecting the natural environment

Environmental Costs

• Inappropriate development:
  • Failure to be sensitive to the natural environment
  • Long-term planning in environmental terms should be done
  • Examples: Costa del Sol, Resorts in Pattaya, Thailand
• Loss of natural habitat and effects on wildlife:
  • Development of facilities and subsequent tourist use may result in rapid or more gradual effects on habitats
  • Examples: Trampling, Golden Toad in Monteverde Cloud Rainforest, Costa Rica, Loggerhead Turtle in the Greek Island of Zakynthos

Types of Pollution

• Water pollution:
  • Contamination of water bodies
  • Examples: Deforestation in Nepal, Effects of trampling
• Air pollution:
  • Introduction of chemicals, particulate matter, or biological materials that cause harm or discomfort to humans or other living organisms, or damages the natural environment
  • Examples: Noise pollution
• Noise pollution:
  • Displeasing human-, animal-, or machine-created sound that disrupts the activity or balance of human or animal life
• Solid Waste:
  • Also referred to as rubbish, trash, garbage, or junk
  • Examples: Caribbean Area

Overcrowding and Traffic Congestion

• Happens when the volume of tourists exceeds the capacity of an environment
• Effects: environmental damage, erosion, and localized pollution

Effects of Activities

• Skiing/alpine tourism:
  • Mountain ecosystems are generally fragile but many are prone to intensive use
  • Requires associated development, causing severe erosion and deforestation
• Ecotourism:
  • Premise is to assist in conservation and well-being of local communities
  • Often leads to deterioration in environmental quality

Tourism, Global Warming, and Climate Change

• By 2050, tourism is expected to see its contribution to greenhouse gas emissions rise from 3 to 7%
• KYOTO Protocol highlights the expected impacts of tourism on the environment
• Effects: rising temperature, decline in visitors, affected ecosystems, shorter skiing seasons, and increased energy consumption

Specific Measures to Minimize Environmental Damage

• Tourism-related companies:
  • Hotel Sector: installing water-saving devices, abolishing individually wrapped food items, using recycled paper and reusable bottles
  • Resorts: decreasing automobile traffic, constructing parking areas outside of central areas, and using electric buses
  • Travel Agencies: publishing brochures offering tips and information on species protection and environmentally proper behavior
  • Transportation: using high-capacity airplanes, reducing noise and emissions, and implementing "garbage return initiatives"
  • Cities and Towns: using solar energy, replacing regular light bulbs with energy-saving bulbs

Hotel Star Ratings

• One-star hotel: small, family-owned, with a limited range of facilities and simple meals; some bedrooms may not have en-suite bath/shower rooms.
• Services may be provided by the owner and family on an informal basis.
• Maintenance, cleanliness, and comfort should be of an acceptable standard.

Two-Star Hotel

• Offers more extensive facilities than a one-star hotel.
• Provides comfortable, well-equipped, overnight accommodation, usually with an en-suite bath/shower room.
• Reception and other staff aim for a more professional presentation.
• Offers a wider range of straightforward services, including food and drink.

Three-Star Hotel

• Supports higher staffing levels and a greater quality and range of facilities.
• Reception and public rooms are more spacious, and the restaurant caters for non-residents.
• All bedrooms have fully en-suite bath and shower rooms and offer a good standard of comfort and equipment.
• Some room service can be expected, and some provision for business travelers.

Four-Star Hotel

• Offers a degree of luxury and quality in furnishings, decor, and equipment in every area of the hotel.
• Bedrooms offer more space and well-designed, coordinated furnishings and decor.
• En-suite bathrooms have both bath and fixed shower.
• Services include 24-hour room service, laundry, and dry-cleaning.
• The restaurant demonstrates a serious approach to its cuisine.

Five-Star Hotel

• Offers spacious and luxurious accommodation throughout the hotel, matching international standards.
• Interior design impresses with its quality and attention to detail, comfort, and elegance.
• Services are formal, well-supervised, and flawless in attention to guests' needs.
• The restaurant demonstrates a high level of technical skill, producing dishes to the highest international standards.

Diamond Rated Hotels

• The AAA Five Diamond Award is an independent hotel appraisal system.
• One Diamond: basic amenities and services.
• Two Diamond: mid-range amenities and services.
• Three Diamond: upscale amenities and services.
• Four Diamond: refined and stylish amenities and services.
• Five Diamond: ultimate luxury and sophistication, with extraordinary physical attributes and meticulous service.

FYI (For Your Information)

• Lodging listings with "FYI" are included as an information-only service for members.

This quiz covers the evolution and application of Global Distribution Systems in the hospitality industry, including automated reservation systems and computerized reservation systems.