Distribution systems are among the most important sales channels in the hotel industry. Here we introduce them to you.
Definition and related terminology
A distinction is made between Global Distribution Systems (GDS) and Alternative Distribution Systems (ADS). These are also called indirect booking channels (compared to direct channels such as telephone, walk-ins or the hotel website).
Originally, many years ago, there was only GDS: this system is a network, so to speak, that allows service providers (travel agencies and travel agents) to access inventory in real time. They are thus able to book hotel rooms, but also airline tickets or rental cars for their customers. A well-known example of this is the Amadeus GDS.
With the entry of the internet into more and more parts of our (private) lives, alternative distribution systems have developed. These are third-party websites that give the end user – our potential hotel guest – direct access to hotel availability and prices. This is why today we often use the term IDS as a synonym for ADS: Internet Distribution System.
This refers to OTAs, travel portals, travel search engines and, for example, airline websites with direct hotel booking options.
Significance today and in the future
It is estimated that today more than half of all hotel bookings are via direct distribution channels. Walk-ins and central reservation offices account for a small percentage. Direct hotel contacts (reservations by e-mail or telephone) still account for a relevant share. However, this share has been decreasing for years. On the other hand, the importance of the hotel website for bookings has grown considerably.
Distribution systems as indirect sales channels also have a significant share of bookings. The share of ADS has grown steadily in the last 10 years. All trends show that this development will continue.
The fact that the share of bookings via the hotel website and the ADS has increased was mainly at the expense of direct, personal contact. So it was and is important for every hotelier to deal with the topic of online travel agencies and ADS in order to use this development for their own hotel. Read more about this in our blog post.