The HSSS Newsletter, Vol. 5, Issue 1 November 1994

FACT:  Global distribution systems will deliver over 16 million hotel reservations in 1994. FACT:  Many hotel companies have seen annual increases of 20-30% in GDS reservations during the past three years. FACT:  The travelling public, as they become more computer literate, are discovering they have access to GDS’s through video text services in Europe and on-line computer services in the US. CONCLUSION:  The electronic booking environment created by global distribution systems is a major and growing component in the hotel marketing and reservation process.  It must be understood and planned for.     This article looks forward over the next three to five years, to the emerging trends and developing opportunities for hoteliers in the electronic environment.  Here are the developments I foresee, together with a word on their significance to our industry.

• GDS’s will decrease in number.  Consolidation of the six existing major systems (Galileo/Apollo, Amadeus, SABRE, SAHARA, System One and Worldspan) will result in five, four or possibly just three remaining systems.

  Impact:  Fewer systems in which to maintain hotel data, and transaction fee stability because of continued tough competition.

• A strengthened focus by the GDS’s on product depth rather than breadth.  Non-core activities such as leasing CRT’s and other hardware will disappear.  The new focus will be on providing extensive travel product selection to permit single-stop shopping.  The value GDS’s add to the booking process will be in their wide array of immediately bookable travel options, reflecting negotiated rate and purchase arrangements and personalised through access to detailed customer profiles.

  Impact:  The electronic marketplace will produce a growing proportion of reservations; reservations by telephone will diminish.

• The traditional imbalance in GDS product selection towards business travel services will diminish as new features are introduced in each GDS to facilitate leisure travel bookings.  Galileo’s Leisure Shopper, System One and Worldspan’s Travel Source, and SABRE’s Tour Guide lead a new generation of GDS packages specifically designed to accommodate complex leisure products and allow their reservation by electronic means.

  Impact:  Leisure-oriented properties, especially resorts and package-intensive operations, will see dramatic increases in their electronic booking volumes.

• Seamless connectivity — the process in which product descriptions, rates and availability shown on GDS screens are drawn directly from hotel company central reservation systems, rather than the usually more limited GDS product data bases, will become the industry connectivity standard.  Already in operation on Galileo/Apollo as Inside Availability, all GDS’s are moving toward implementation of this functionality.     As it matures, seamless connectivity will be the world’s conduit to the full library of package descriptions and program information resident in hotel company reservation systems.  For the first time, a hotel’s full product line will be electronically presentable, a situation not currently possible due to the considerable format constraints of today’s GDS databases.

  Impact:  Hoteliers will be able to provide detailed, robust descriptions of all products, including multi-element packages, without use of cryptic codes.

• Global systems will be increasingly “regionalised” to increase user comfort.  Displays will be multi-lingual, as will computer-based training, rates will be shown in local currency, advertising will be region-specific and sales support will be locally provided by regional or national distribution representatives.

  Impact:  More bookings.

• GDS displays will become substantially more sales-oriented.  Today’s text-intensive listings might be compared to newspaper classified ads; the future will bring the equivalent of full-colour glossy brochures.  The result of this transformation will be extensive image libraries and sophisticated electronic hotel directories, together with full-motion, video-like presentations stored on CD-ROM. The future will see visuals fully-integrated with text, displaying television-like production techniques and image clarity.  Further into the future, fully-interactive multi-media presentations – evolving to full virtual reality “fam trips” – will characterise the GDSs of the year 2000.

  Impact: The range of marketing and sales options will broaden.  The importance and productivity of traditional print advertising vehicles will give way to a myriad of electronic opportunities.

• New competitors will challenge the GDSs’ virtual monopoly on electronic data bases of travel products.  As GDSs concentrate on functioning as massive distribution networks, their current profitability, and possibly livelihood, will be challenged by other networks who believe they can present product, and deliver booking messages, equally efficiently. Some of the potential competitors can be anticipated — on-line services such as CompuServe, Prodigy, Genie, America-on-Line and Delphi, plus participants in Internet.  Others might include communication companies, cable TV systems and software houses.

  Impact:  More effort will be required from hoteliers to evaluate the potential of each advertising opportunity.  Channels presenting electronic travel options will multiply, becoming an even more pervasive presence in our day-to-day lives.

The electronic environment for presentation and reservation of travel services, including hotels, is becoming more sophisticated, more product-friendly, and more central to the decision-making process of most travellers.  The structure and content of hotel system databases will require rethinking and revision, to ensure they provide the sales-oriented, travel agent- and consumer-friendly product presentation which will be demanded.  All the while, hoteliers will need to face the challenge of identifying those marketing and sales opportunities, including those presented in this expanding electronic marketplace, which will deliver a bankable return on their investment.