Global distribution and reservation systems (GDS) have revolutionized the travel industry over the years. The Four Major GDS Systems Amadeus, Galileo, Sabre, and Worldspan help buyers search for the best deals for their holiday quicker and easier. On the plus side, these systems have helped consolidate the industry and make it easier for travel agents to give out prices to their customers. Travel agents use this system as a backbone for their industry. All this is well and good but with the economic downturn in the last few years plus the rise of other travel, the rise of the internet, also competition amongst GDS systems and other factors the success of global distribution of travel bookings has to be looked into. In this essay, I will discuss some of the issues relating to GDS.
To begin with, we live in times that have seen major banks and companies around the world collapse. Customers want better prices. Airlines, travel agents, hotels are also looking to cut costs while still wanting to maintain their customer base. This is the dilemma for all involved. So as times change within the industry, the advantages of GDS and competition amongst the companies involved should hopefully have the knock on effects to the customer with lower prices. There is also the case as the global slowdown happens that companies will look elsewhere by trying to get customers to book direct with them. This leaves a gap where GDS systems still need to make their money and additional costs may be added. On the other hand, these companies by avoiding using GDS systems risk losing trade with these global players. We are also faced with the concentration of power amongst these travel systems who can monopolize the market and see prices rise as a result of their control of the market through the four GDS systems.
Furthermore, the GDS players have now more to do as competition gets harder. The rise of the internet has to be the main competition for GDS. By avoiding extra cost through GDS companies can make more money. Many low-cost airlines in different countries offer seats at reduced fares by paying direct to their website. One has only got to do a search on the internet to see the array of companies offering booking information to see that competition amongst the smaller travel agents and airlines is there. The internet has also allowed people to go and make their own travel plans instead of leaving it all to a travel agent.
However, we still see that most travellers use travel agents to book their travel arrangements. Travel agents and travel destinations are now faced with what of the four GDS systems to use which highlights the future development of the major players in the GDS system as competition gets more intense to attract interest to their system. For example, travel agents are trying to reduce costs while still maintaining sales so each GDS system has to try and offer the best deals to these people. In reality, the future looks bright as GDS has to create better management and sales plan while becoming more professional to win these contracts. This also could impinge on the GDS industry as it tries to become more competitive by being more aggressive in the market. All this determined effort to be more successful may turn airline/travel agents away. We will have to wait and see
To conclude it is hard to say if any interested party will come up with a system to rival these GDS companies. Millions of dollars are now being pumped into Africa and the Arab region as contracts are signed as these GDS companies try to consolidate their interest in these regions. The only people that can stop their dominance for these distribution and reservation systems are the airline themselves. Companies like Emirates are major players in the world market for travel. Hopefully, the customers feel the benefit for the competition and not the pain as costs are pushed onto them.