Mark Lewis of HotelREZ Hotels & Resorts guides us through the sometimes misunderstood world of the Global Distribution System.
For hotel owners and operators, whether groups, boutiques, independents or apartments, the focus on bookings and revenue remains constant. Maximising both is critical to success and in order to achieve this, representation on Global Distribution Systems (GDS) is crucial.
To get the most out of a GDS it is important to understand how they operate and what to look for when deciding which GDS partner to appoint.
Simply put, a GDS is an online platform that connects travel bookers and suppliers worldwide in real-time. A hotel’s Property Management System (PMS) or Channel Manager, sends live rates and availabilities to both the GDS and online booking websites. In a way, being on a GDS is almost like hiring a sales manager in every country – it’s a quick way to capture bookings from other travel markets and reach travellers worldwide. It is important to bear in mind that more than 600,000 travel agents use a GDS to search for the best available travel and accommodation rates for their clients every day to book flights, hotel rooms, car rentals and destination activities. As a result, being represented on the GDS is absolutely crucial for groups, hotels and apartments – especially if you’re struggling to attract enough attention from travellers online. Finding the right representation company can, however, be quite a minefield.
To ensure you get the most out of a GDS, it is important to approach it with the right knowledge and understanding of its operations and capabilities. With this in mind remember that the GDS is a direct marketing tool for your property and it therefore needs to be managed correctly. If this is done, there is the potential for a substantial return on your investment.
For the most part you can expect to receive more GDS generated bookings from the corporate market. That is not to say that you should not pay due care and attention to direct bookings but it is important to remember the value of both (indeed a good partner will work with you on both a GDS and direct business strategy). Likewise your visibility including key information around your hotel’s offer and facilities, availability and rates will be increased and so too the chance for travel agents worldwide to view your offer and make bookings in markets that you might not otherwise have reached.
To maximise this increased visibility ensure you complete your hotel description correctly in order to achieve higher rankings on GDS searches. The right descriptors will also support your brand messaging which will be visible throughout the search and booking process to help keep you top of mind with travel agents.
Understanding the benefits is one part but to really reap the rewards it is also important to choose the right GDS partner for your hotel. Hotel owners and operators can get on to the GDS in several ways. Either through a hotel technology provider, a hotel representation company or soft brand (assuming you are not looking for a franchise or hard brand solution). Hotel technology providers mainly just provide access however a hotel representation company can also offer support and recommendations on how best to utilise the GDS to optimise your distribution strategy. Similarly you can have a web site, but driving traffic to it requires an investment of time, energy and expertise, you achieve this through recruiting the right talent or working with a digital agency, the same can be said of the GDS. The provision of technology is clearly fundamental, but you then need to work with a partner that can leverage it for you. If you choose the hotel representation company route it is imperative to choose a provider with a wide range of services including good cost of sale which adds incremental business to your property and actively works to increase overall RevPAR per room.
There are a few other important questions to ask. Ensure that they can completely integrate with your existing PMS or channel manager so that you can effectively manage your distribution strategy. Secondly, have the right fee structure in place and can demonstrate a positive ROI. Revenue generation should also be incremental and ideally you should not have to pay high ‘brand fees’ and fixed costs unless the value offering can be clearly demonstrated . Then, check that your GDS partner has the capability and reach to target new markets so that you can realise the ambition of broadening your own reach without having to fund costly sales missions, what global relationships does your prospective partner bring to the table.
Marketing services are also key and a good GDS partner will support you in generating greater awareness for your hotel online to drive direct business via a cutting edge and highly optimised booking engine, focused not just on hotel revenue but ancillary spend. Marketing and consultancy services should also pro-actively cover social media and e-commerce activities, SEO, SEM and thoroughly understand the algorithms that underpin success in the online environment
Underlying all of this is the need for a comprehensive, Business intelligence. To fully understand your revenue ecosystem it is necessary to review and evaluate your booking data so that you are able to make informed decisions on how best to move forward with the right distribution strategy in place that will continue to deliver increases in bookings and revenue in the future, in this regard you partner should work with you to establish the best approach, your business is unique and swamping you with reports is not always helpful when time is scarce, clear, infographic based analysis and business planning is essential. This will only be found where your success and your partners success are aligned, if you’re paying large costs regardless of your performance then maybe it’s time to course correct.
