Global Distribution Systems in Hospitality Industry

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Questions and Answers

What is the primary service offered by Datalex?

Global online tours

E-business framework and services for global travel companies (correct)

Restaurant search and reservation

Web-based data management and e-commerce

In which year was Galileo International created?

1971 (correct)

1981

1991

1961

What is the name of the technology launched by Worldspan in 2002?

ePricingSM (correct)

Apollo CRS

Covia Partnership

Galileo Platform

Which company did United Airlines sell 50 percent of its Covia shares to?

USAir, British Airways, Swissair, KLM Royal Dutch Airlines, and Alitalia Signup and view all the answers

What is the name of the division created by Galileo International in 1976?

Apollo Travel Services (ATS) division Signup and view all the answers

In which year did Galileo International incorporate into the Galileo Company Ltd?

1993 Signup and view all the answers

What is the primary service offered by Viator?

Web-based data management and e-commerce Signup and view all the answers

Which company is not mentioned as a shareholder of Galileo Company Ltd?

Lufthansa Signup and view all the answers

In which year did the ATS division separate from Galileo International?

1986 Signup and view all the answers

Which company uses Worldspan for its booking engine?

Orbitz LLC Signup and view all the answers

Why do tourism suppliers need to closely monitor their competitors' pricing?

To stay competitive in the market and adjust their prices accordingly Signup and view all the answers

What happens to prices when there is a lot of competition in the tourism industry?

Prices decrease Signup and view all the answers

What is the term used to describe the temporal peaking pattern in tourism demand?

Seasonality Signup and view all the answers

What is the impact of seasonality on the supply of tourism services?

It affects the occupancy rate of accommodation Signup and view all the answers

What is the result of seasonal unemployment in tourism regions?

Welfare problems Signup and view all the answers

Why do companies in the tourism industry need to be mindful of their pricing strategies?

To stay within the price limit set by the government Signup and view all the answers

What is the purpose of the government's intervention in the tourism industry?

To control the price of goods and services Signup and view all the answers

What is the term used to describe the factors that influence the supply level of the tourism industry?

Geographic factor Signup and view all the answers

What happens to the price of accommodation during peak season?

It increases Signup and view all the answers

What is the impact of off-peak season on tourism businesses?

They experience low demand Signup and view all the answers

What is one benefit of global distribution systems for hotel operators?

Reaching new traveller market segments Signup and view all the answers

What is a feature of a GDS that helps with the reservation process?

Automated reservation process through CRS system Signup and view all the answers

Why are more travel agents relying on the GDS?

To easily connect with hotel properties from around the world Signup and view all the answers

What is the result of adopting a dynamic mix of channels for hotel bookings?

Increased bookings in both high and low seasons Signup and view all the answers

What is a benefit of a GDS system for hotels?

24/7 visibility and increased bookings Signup and view all the answers

What is an advantage of using a GDS for hotel room availability?

Vendor room availability is updated across all online travel agents and the hotel's site Signup and view all the answers

What is a characteristic of a GDS?

Simple and easy to use interface Signup and view all the answers

What is a benefit of a GDS for travel agents?

Having access to live rates and availability Signup and view all the answers

What is the result of having a dynamic mix of channels for hotel bookings?

Increased bookings from both online travel agents and GDS Signup and view all the answers

What is a feature of a GDS that helps hotel operators?

Providing little maintenance required Signup and view all the answers

What happens when a tourism destination reaches its carrying capacity?

It reaches a state of stagnation Signup and view all the answers

What is the main consequence of tourism reaching its carrying capacity?

Environmental, social, and economic problems Signup and view all the answers

What is the last stage of Butler's model?

Decline or Rejuvenation Signup and view all the answers

What is scenario A in Butler's model?

Successful redevelopment leading to renewed growth Signup and view all the answers

What happens to holidaymakers in the decline scenario?

They are replaced by weekend or day-trippers Signup and view all the answers

What is required for the rejuvenation scenario?

A complete change in tourism attractions Signup and view all the answers

Why might a tourism destination become divorced from its geographic environment?

Because of the dominance of international tourism corporations Signup and view all the answers

What is the purpose of the homework task?

To research examples of destinations at different stages of the development process Signup and view all the answers

What happens to tourism facilities in the decline scenario?

They are replaced by non-tourism activities Signup and view all the answers

What is the main difference between the decline and rejuvenation scenarios?

The way the destination responds to challenges and opportunities Signup and view all the answers

What is a common feature of entertainment attractions like casinos, cinemas, and sporting events?

They attract tourists from around the world Signup and view all the answers

What is the purpose of the four P's of an entertainment attraction?

To create a marketing mix Signup and view all the answers

What is an example of a mega sporting event?

Olympic Games Signup and view all the answers

Why are entertainment attractions important to the economy?

They create employment opportunities Signup and view all the answers

What type of performances are typically found in a performing art theatre?

Live performances of people acting as characters Signup and view all the answers

What is a common feature of cinemas?

Movie premiers and artistic displays Signup and view all the answers

What is the purpose of considering the marketing mix when choosing an attraction to market?

To create a successful marketing strategy Signup and view all the answers

What type of entertainment attractions are leisure-related places that tourists feel can be culturally or structurally important?

Concert, culture, festivals, and sport events Signup and view all the answers

What is an example of an entertainment attraction that is a mega sporting event?

The World Cup Signup and view all the answers

What is the result of entertainment attractions like casinos and sporting events?

They create employment opportunities and provide revenue Signup and view all the answers

What is one of the consequences of climate change in the tourism industry?

Increased demand for coolness in summer Signup and view all the answers

What is one of the specific measures to minimize environmental damage in the hotel sector?

Installing water saving devices Signup and view all the answers

What is one of the specific measures to minimize environmental damage in resorts?

Decreasing automobile traffic in resorts Signup and view all the answers

What is one of the specific measures to minimize environmental damage in travel agencies?

Publication of brochures with environmentally proper behavior Signup and view all the answers

What is one of the specific measures to minimize environmental damage in transportation?

Using high capacity airplanes to reduce noise and emissions Signup and view all the answers

What is one of the specific measures to minimize environmental damage in cities and towns?

Use of solar energy Signup and view all the answers

What is the result of climate change in the tourism industry?

Increased demand for coolness in summer Signup and view all the answers

Why do tourism-related companies realize that turning green makes good business sense?

Because it is a way to reduce environmental damage Signup and view all the answers

What is one of the benefits of tourism-related companies turning green?

Reduced environmental damage Signup and view all the answers

What is the reason for tourism-related companies to take specific measures to minimize environmental damage?

To reduce environmental damage Signup and view all the answers

What is a characteristic of a one-star hotel?

Small and independently owned, with a family atmosphere Signup and view all the answers

What is a feature of a three-star hotel?

Reception and other public rooms will be more spacious Signup and view all the answers

What is a characteristic of a five-star hotel?

High staffing levels and a wide range of luxury facilities Signup and view all the answers

What is a feature of a two-star hotel?

Comfortable, well-equipped, overnight accommodation with en-suite bath/shower rooms Signup and view all the answers

What is a common feature of all star-rated hotels?

Acceptable standard of maintenance, cleanliness, and comfort Signup and view all the answers

What is the main characteristic of a Five Diamond hotel?

It is an upscale accommodation with a high level of quality throughout. Signup and view all the answers

What is the purpose of the AAA Five Diamond Award?

To reward hotels with a high level of quality and service. Signup and view all the answers

What is a characteristic of a Four Diamond hotel?

It is an upscale accommodation with a high level of quality throughout. Signup and view all the answers

What is the main difference between a Four Diamond and a Five Diamond hotel?

The level of luxury and sophistication. Signup and view all the answers

What is the purpose of the AAA Diamond rating system?

To provide an independent hotel appraisal system. Signup and view all the answers

Study Notes

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

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.

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Description

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