Definition of GDS
Global distribution systems (GDSs) are computerized, centralized services that provide travel-related transactions. They cover everything from airline tickets to car rentals to hotel rooms and more.
Global distribution systems were originally usually set up for use by the airlines but were later extended to travel agents. Today, global distribution systems allow users to purchase tickets from multiple different providers or airlines.
Global distribution systems are also the back end of most Internet-based travel services.
However, different global distribution systems still service a limited number of airlines. For example, Sabre is used by American Airlines, PARS by USAir, TravelSky by Air China, Worldspan by Delta, etc. Other major global distribution systems include: Galileo, TravelSky, and Worldspan. Global Distribution Systems are also sometimes called Computer Reservation Systems (CSRs).
Global Distribution System Example
To see how global distribution systems work, let's take a closer look at one of the biggies: Amadeus. Amadeus was created in 1987 as a joint venture between Air France, Iberia, Lufthansa and SAS and has grown considerably over the past twenty-five years.
Amadeus is used by over 90,000 travel agency locations and over 32,000 airline sales offices for the distribution and selling of travel services.
The service processes more than 480 million transactions per day, and over 3 million total bookings per day (that's a lot!). Business travelers benefit from Amadeus by being able to purchase a complete itinerary all at once, rather than having to negotiate with individual travel service providers. As many as 74 million passenger name records can be active at the same time.
In terms of airline partners, Amadeus services leading airlines such as British Airways, Qantas, Lufthansa, and more.
The Future of Global Distribution Systems
There's no doubt that global distribution systems will play an important part in the travel landscape for many years to come, but their traditional role is changing and being challenged by all the changes taking place in the travel industry. Two important considerations impacting the role of global distribution systems are the growth of online travel websites that offer price comparisons and the increased push from airline and other travel service providers to push consumers to make bookings directly via their websites. For example, to recoup additional money, over the past few years many airlines have pushed travelers to purchasing tickets directly from the airline websites. Some airlines are even imposing additional fees for tickets booked through a global distribution system, rather than the airline's website.
While such changes will definitely impact the future growth opportunities for global distribution systems, I believe there will continue to be a big role for them over the next twenty years at least.