Can Your GDS Content Be Doing More Harm Than Good to Your Hotel?
Here we list out the pros, the cons, and what to do for optimal performance.
In the hospitality industry, Global Distribution Systems (GDS) play a crucial role in distributing hotel inventory to travel agents and online booking platforms worldwide. These systems help hotels reach a broader audience and increase their bookings. However, as convenient as they may seem, there's a growing concern among hoteliers about whether their GDS content is truly benefiting their business or potentially causing harm. Let's explore this question in detail.
Understanding GDS Content
Firstly, let's understand what GDS content entails. GDS content includes detailed information about a hotel's rooms, rates, availability, amenities, and policies. This data is shared across various distribution channels, such as travel agencies, online travel agents (OTAs), and corporate booking platforms, allowing them to showcase and sell the hotel's inventory to potential guests.
The Pros of GDS Content
Increased Visibility
GDS provides hotels with extensive reach, exposing their properties to a vast network of travel professionals and potential guests globally.
Access to Travel Agents
Travel agents rely on GDSs to search and book accommodations for their clients, making it essential for hotels to have a presence on these platforms to tap into this market.
Streamlined Distribution
GDS streamlines the distribution process by consolidating hotel inventory in one centralized system, making it easier for travel agents and OTAs to access and sell.
The Potential Harm of GDS Content
While GDS offers undeniable benefits, there are potential drawbacks that hoteliers need to consider:
Rate Parity Concerns
Maintaining rate parity across all distribution channels can be challenging. Hotels risk undercutting their direct booking channels if they offer lower rates through GDS, leading to a loss in revenue and potential guest dissatisfaction.
Competition with OTAs
GDS often feature hotels alongside other properties, increasing competition and making it harder for individual hotels to stand out. This can lead to a price-driven market where hotels compete solely on rates, eroding profitability.
Higher cost of Distribution
Relying heavily on GDS’ discount for bookings can result in a higher cost of distribution due to commissions and transaction fees paid to CRS. This eats into the hotel's revenue and reduces profitability.
Outdated content
Hotels that do not audit their GDS content regularly expose themselves to serious reputation risks and may lose potential guests who rely on accurate and up-to-date information when making booking decisions.
Finding a Balance
While the potential harm of GDS content is worth considering, it's essential to recognize that these systems remain a valuable tool for hotel distribution. To maximize the benefits while mitigating the risks, hoteliers should:
Monitor Rate Parity
Regularly audit rates across all distribution channels to ensure consistency and prevent rate undercutting.
Invest in Direct Booking Strategies
Focus on driving direct bookings through your hotel website and loyalty programs, offering incentives and perks to encourage guests to book directly.
Negotiate Favorable Terms
Negotiate with CRS providers to secure competitive transaction fee rates and favorable contract terms that align with your hotel's profitability goals.
Diversify Distribution Channels
Explore alternative distribution channels, such as metasearch engines and direct partnerships with corporate clients, to reduce dependency on GDSs and OTAs.
While GDS content undoubtedly offers hotels significant distribution opportunities, it's essential for hoteliers to evaluate whether the benefits outweigh the potential harm to their business. By carefully managing their GDS presence, maintaining rate parity, and diversifying distribution channels, hotels can strike a balance that maximizes revenue while minimizing the risks associated with GDS content. Ultimately, a strategic approach to distribution is key to ensuring the long-term success and profitability of your hotel. Contact us or click here to learn more about how Premiere Advisory Group can help audit and streamline your GDS content.
ABOUT PREMIÈRE ADVISORY GROUP
Première Advisory Group is a trusted commercial strategy advisory group for the hospitality industry. We help independent and boutique hotels around the globe drive profitability through a unique approach that combines experts in Distribution & Sales, Revenue Management, eCommerce & Marketing, and Hotel Technology, so they can maximize revenue and increase market share. With offices located in New York and Paris, Première Advisory Group supports over 125 independent and boutique hotels across the globe and was recently awarded Top Revenue Management Company by Travel and Hospitality Tech Outlook.
