How important is it to list on the GDS? And how well does the GDS perform compared to other distribution channels?.
As a worldwide CRS, D-EDGE helps hotels develop their sales on all channels and knows that the GDS isn’t always used by hotels to its full potential.
To better understand the opportunities hotels are missing, we conducted an analysis of booking data from independent hotels and small to medium-sized hotel groups across Europe and Asia Pacific. We also interviewed hoteliers about their experiences with the GDS. Some of our findings may surprise you—they certainly surprised us!
As leisure travel rebound has reached its peak in most parts of the world, hoteliers are turning their attention to the corporate segment to meet revenue objectives and drive growth.
And the timing couldn’t be better. After a lagging recovery following the pandemic, the business travel segment is gaining momentum. This year, global spend is expected to increase by 11.1% over 2023 and to grow at a compound annual growth rate (CAGR) of 7.0% from 2025 to 2028. By 2028, the business segment is forecasted to reach over US $2.0 trillion in value, according to the Global Business Travel Association (GBTA).
For hotels, a key source of business travel is the GDS (Global Distribution System). In fact, about 80% of GDS bookings are corporate, whereas 20% are leisure. And business travellers are about twice as valuable to travel suppliers as leisure travellers, according to Amex GBT.
A large share of corporate travel is managed by travel management companies (TMCs) like CWT, Amex GBT, BCD, and ABC Global Services. TMCs book hotels almost exclusively through the GDS, either through their travel agents or, more frequently these days, via self-booking tools used by employees of their corporate clients. Travel consortia like Internova Leaders Network and Signature Travel Network also book accommodations primarily through the GDS.
As part of their services, TMCs source and negotiate a list of preferred vendors on behalf of their clients, sending out annual requests for proposals (RFPs) to hotels. Being listed on the GDS is the first step of the strategy to bid for this business.
What Role Does the GDS Play in Hotel Distribution?
D-EDGE Hospitality Solutions receives frequent enquiries from hoteliers who are considering listing on the GDS but aren’t sure what to expect. To provide insights, we conducted an analysis of GDS performance and compared it to other major distribution channels (cf methodology at the bottom of the post).
'GDS distribution has long been a source of mystery for many hoteliers, with no shortage of opinions but often lacking concrete data. At D-EDGE, we empower thousands of hotels to access this channel, and we’ve witnessed firsthand an extraordinary rebound in the business travel market over the last months. More importantly, we see that hotels utilising the GDS achieve stronger performance in areas such as ADR, length of stay, and cancellation rates. However, the GDS is not suitable for every hotel, and this article aims to provide the data and insights needed to make informed decisions.' - Isabelle Falque, Chief Marketing & Communication Officer at D-EDGE Hospitality Solutions
1. The GDS has been the Fastest-Growing Distribution Channel since 2023
This year, the GDS has grown faster than any major distribution channel. From January to May, GDS bookings increased by 54% over last year. By comparison, the wholesale segment grew by 28%, direct bookings were up by 19%, and Booking Holdings (including Booking.com, Priceline and Agoda) increased by only 5%.
The data supports other indicators of recovering business travel. Nevertheless, GDS distribution share can vary substantially by property. At the Evergreen Laurel Hotel in Paris, for example, the GDS generated 10% of total revenue in 2023, according to Magali Malherbe, the hotel’s Director of Sales & Marketing.
“Production is increasing more and more,” she told D-EDGE. “We are a business hotel, and we have contracts with many companies in our area. More companies now use a booking tool to make reservations, so it’s important for us to have GDS distribution. It helps us expand our international customer base, enhance our hotel’s visibility and brand recognition, and access new market segments.”
At Establishment Hotel in Sydney, Australia, the GDS share is even higher, at about 20% of total bookings. “The GDS gives us more visibility and helps us capture more of the corporate market, who prefer to book through their travel management company,” Rano Huang, Hotel Manager, told D-EDGE.
'The GDS gives us more visibility and helps us capture more of the corporate market, who prefer to book through their travel management company.' - Rano Huang, Hotel Manager at Establishment Hotel
2. GDS Bookings Have one of the Highest ADR
At €179, GDS bookings generated the second highest average daily rate (ADR) during the January to May period, exceeded only by direct bookings at €204, and well ahead of OTA rates, which ranged from €124 to €168.
This is particularly significant because the majority of sales via the GDS are entry-level room types, whereas other channels sell all room categories, including premium rooms and suites.
It’s Not Ideal for Every Property: Downsides of the GDS
The hoteliers we interviewed cautioned that while the GDS can be highly beneficial for certain hotels, it’s not always the best fit for all hotels.
Read the full story here
Methodology
The data was drawn from digital bookings made between January 1 and May 31, 2024, and compared to the same period the previous year. The data set included 367 independent hotels and small to medium-sized groups from across Europe and Asia Pacific, a mix of 3, 4, and 5-star properties.