The Global Distribution System (GDS) is one of the most important tools for travel industry, which is a network operated by a company that empower automated transactions between travel service providers(vendors) and travel agencies. The travel agencies mostly trust on it for services, products and rates to impart travel related services to the end customers.
The first electronic reservation system, Magnetronic Reservisor was introduced in 1952 which included temporary storage based on magnetic drum. Thanks to American Airlines and IBM, that first automated reservation system Sabre(semi automated business research environment) was launched in 1959 and it was completed in 1964 to became first largest civil data processing system. Sabre was accessible to agents throughout the world and its capability to keep correct inventory in real time was phenomenal. After the deregulation of Airline Industry in 1978, ARS (Airline reservation system) became more important to travel industry.
In pre-deregulation period each airline had its own reservation system with travel agents as subscriber, but now, the GDS is run independently and their major subscribers are airlines and travel agencies. There are only four major GDS in market- Amadeus, Galileo, Sabre and Worldspan. They provide access on both B2B and B2C platforms and exposure to global inventories of airlines hotels, cars and buses.
The vast network of Global Distribution System enables the travel agencies and their clients to access travel data for making reservation. GDS does not hold any inventory, it is held on vendor’s reservation system itself but it has real-time link to the vendor’s database. As for example, when a travel agent approaches for reservation on the service of Air India, the GDS routes its (travel agent) request to its (Air India) computer reservation system. Thus with the integration of a single GDS, a travel agent could take the reservation of various flights, hotels and other services on all the vendors operating in the same route who are the part of that GDS network. Primary customers of GDS are both online and offline travel agents who.
Global Distribution System updates the status of inventory in real time. Thus managers can view rates change and can further change the price or make special offer. Agents can view all the changes instantly and will be able to suggest the new updates and offers to clients without any interruption to make a deal. It is advisable to invest in GDS because the system places your holiday booking service and inventories in front of large clients without any extra expense in your marketing budget. The USP of GDS that it can provide the best holiday packages to your guest on lowest rate, which includes air, hotel and car rental.
It is argued by many experts that by the end of 2020, GDS will be obsolete because many of the airlines vendors are adopting the strategy of “direct selling” to their wholesales and retails (customers). It is feared that advent of multiple price comparison website could eliminate the need of dedicated GDS for point-in-time prices and inventory for both travel agents and end-customers. Hope GDS may evolve like other technology/software-based systems.