Booking trends: Don’t ignore impact of GDSes
 
Booking trends: Don’t ignore impact of GDSes
03 SEPTEMBER 2015 8:10 AM
Hotel bookings through travel agents are expected to reach a record high in 2015 and have held their share of the market despite dire predictions for years.
REPORT FROM THE U.S.—It’s easy to fixate on technology when talking about bookings, but one of the most well-established paths to booking a room might represent the most overlooked opportunity for hoteliers. That opportunity? Global distribution systems.
 
Recent global data released by TravelClick projects 2015 to be a record year for bookings through global distribution systems, the channel used when guests book through traditional travel agents. TravelClick is projecting 62 million bookings through GDSes in 2015, which is up from 61 million in 2014 and 42 million during the depths of the recession in 2009.
 
According to the data, a total of $12 billion in revenue was booked across all channels in the second quarter in the top 50 global markets, encompassing 69 million roomnights. GDS bookings covered 16.3% of those bookings. The highest portion of bookings came through direct bookings (36.9%), followed by Web bookings (22.5%). Central reservations system bookings (12.8%) and OTA bookings (10.2%) represent the remaining portion.
 
GDS bookings have managed to hold their share of transient bookings through the past two years, staying steady at 19.1% during the second quarter of each year. The total revenue from transient bookings in the top 50 markets during the second quarter grew year over year from $11.5 billion in 2014 to $11.8 billion this year.
 
During a recent webinar on the data titled “Second quarter 2015 global hotel industry update,” John Hach, senior industry analyst for TravelClick, said that piece of the pie is up for grabs for enterprising hoteliers because many have ignored the segment and assumed for years that travel agent bookings are bound to decline.
 
“The hotels that get this business are the ones who understand it and actively market themselves,” Hach said. “Only about 10% of those connected to travel agents actively market to them. That number is so low because people believe that business is going through other channels.”
 
David Burke, executive VP and chief sales and marketing officer for the Breakers Palm Beach, told Hotel News Now that bookings through travel agents represents roughly 15% of his resort’s leisure travel, which has remained steady despite dire predictions.
 
“We’ve been hearing predictions about the demise of travel agencies for years, and it never really happened,” Burke said.
 
Burke said not only are those bookings steady, but they represent some of the most profitable guests for the hotel.
 
“They trend higher than most guests, spending more on suites or to stay on the concierge floor,” Burke said. “And the high spending isn’t just on the room rate; it’s the total spend.”
 
That is supported by TravelClick data, which showed GDS bookings captured the highest ADR among the five segments tracked both internationally (€198, or $222) and in North America ($189). 
 
Burke said getting in on travel agent bookings isn’t particularly complicated work.
 
“It’s not rocket science,” Burke said. “It’s about relationships.”
 
Mobile booking is not a prediction; it’s reality
If you aren’t ready for mobile booking, then you’re already behind the curve, Hach said.
 
“Not having a mobile-optimized site today is like not having a website in 2002,” Hach said. “Having an optimized site is a great way to find a local hotel on short notice. We’re starting to see this shift, and it’s becoming apparent. It’s a big change in consumer behavior.”
 
Web bookings, including those made through mobile apps and responsive websites, represented 27.7% of transient reservations in the second quarter of 2015. That’s up from 26.3% in the second quarter of 2014.
 
Alexis Welner, senior director of global enterprise business intelligence for TravelClick, said during the webinar that the trend toward more mobile booking has been a long time coming.
 
“We’ve been talking about this for years and years and years, but the proof is in the data,” Welner said.
 
Sam Trotter, director of development and portfolio e-commerce manager for Boutique Hospitality Management, told HNN that dealing in mobile has become a regular part of doing business at his company.
 
“Everything we do now has to be mobile-friendly,” Trotter said. 
 
He said that effort pays off in multiple booking channels.
 
“Unfortunately (mobile) doesn’t convert as well as on desktop, so we make it as easy as possible to call the reservation department (from the mobile site) instead of making people clumsily use their thumbs,” Trotter said.
 

8 Comments

  • Nicola Meyer September 3, 2015 6:03 AM

    "direct bookings" meaning a "real travel agent"? I also think that looking at GDS Production Globally is a little too "wide spread". At my hotel in Miami Beach GDS production through "real" travel agents (excluding Priceline and Magellan) is declining. My frustration has always been that hotels have no way to see what a Travel Agent sees on their screen. That with a good understanding of the systems. it is very time consuming (I tried marketing initiative on ABC and Thor over the years) with uncertain outcome, as the hotel has so little influence.

  • Desert Hotel September 7, 2015 4:29 AM

    Good points Nicola. The GDS systems UI are so antiquated, that it's difficult for properties to advertise to them. The article mentions that if you don't have a mobile website, it's like not having a website in 2002....but the GDS systems look like they're stuck in 1990 with their non-GUI interface and text based ads w/goofy banner ads that look like ads we placed in the late 90's as the only options to advertise. It's virtually impossible to target specific agencies on the GDS, so you have to take a shotgun approach to it. That's why I think that the GDS doesn't get much love from hotels....because it's unwieldy and difficult to work with.

  • Jan Korstanje September 7, 2015 9:43 PM

    I guess that the GDS portion mainly represents business travel. Is there any data to verify that statement? Furthermore I find the categories slightly confusing. Direct bookings is that everything that all direct booking (door, telephone, email) i.e. direct bookings do not include bookings made on the hotel web site? The OTA portion seems very low, and not representative for the European market for sure. All in all the article lacks a bit of clarity.

  • Max Starkov September 8, 2015 3:39 AM

    What all of this data does not tell you is that the bulk of these GDS bookings are from managed corporate travel and done by the employees themselves via the self-serve corporate booking engine on the corporate intranet! No travel agency involved! Look at the facts: back in 1995 there were 35,000 ARC approved travel agencies in the U.S., today this number is less than 13,000. So when talking about GDS contribution, the bulk of these reservations do not come from travel agents. Needless to say, it is very important for hoteliers to contract preferred corporate rates with as many Fortune 1000 companies as possible, but in many cases this is done outside the travel agency route

  • Ann September 8, 2015 4:57 AM

    What most suppliers are missing is the number of bookings that are made where they have no idea that it is actually the agent doing the booking, not the client. Those agents are logging in on the supplier website (ie, hotels) as their clients if they are members of clubs to do bookings, and few suppliers actually ask who the booking person is. So the assumption is that more bookings are made "directly" by the consumer, when it actually is an agent doing it. Airlines, especially, are making this assumption since there is likely no commission involved. Many agents no longer even have a GDS (because they associate the GDS with air, and they may not even do air), which means they are doing everything either thru a supplier agent website, or directly as the consumer. Until suppliers actually figure out how to measure how agents book for their clients, they are not going to get a true representation of how much business comes through the agency channel (regardless of method of booking).

  • Max Starkov - HeBS Digital September 8, 2015 5:57 AM

    The fact of the matter is that the bulk of the 13,000 travel agencies out there are part of the so called mega agencies (American Express Travel, Carlson Wagonlits Travel, etc) which work off GDS screens that are customized to their agency and stripped off any GDS advertising. So one way to reach travel agencies is by working directly with the mega agencies and become part of their preferred hotels, as well as have a robust section on the hotel website presenting your hotel as a travel agent-friendly hotel to target the smaller and independent agencies out there.

  • Neil Armorgie September 11, 2015 12:34 AM

    The number of bricks and mortar travel agencies and TMC's have declined but that is only part of the picture, with the growth in home workers and independent contractors, the GDS is still a major booking channel for travel intermediaries. So whilst there will be some growth of GDS because of self booking tools (SBTs) often provided by the TMC to their corporate account, the travel agent themselves are still making a significant amount of bookings via the GDS. This is particularly true in Europe where SBT's have less traction. For example our network of 70 countries booked 2.6 million room nights via the GDS last year and this was 19% up vs 2013 and currently we are running 10% this year.

  • Chicke Fitzgerald October 1, 2015 10:23 AM

    OK guys, there are 1 BILLION overnight trips every year in the US. While 60 million sounds like a lot, it is really pitiful that after nearly 40 years of automation via the GDSs that the travel agents are only producing 6% of all of the hotel bookings in this country. I believe that it is because of the industry's myopic focus on the air traveler. Just 11% of all overnight travel in this country is by air. We need to stop talking about "attachment rates" and look at the opportunity to sell hotel by itself, as 89% of overnight travelers in this country are traveling by car.

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