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Travel agents are changing the way they make hotel reservations. They are turning away from toll-free telephone numbers to booking hotel rooms directly through their computer systems. Travel agents' computer systems, which were referred to as computer reservation systems (CRSs) for years, are now called global distribution systems (GDSs) because of their "global" marketing reach.
Exhibit 1 shows the dramatic shift away from telephone sales and toward GDS bookings that occurred between 1991 and 1992. (Exhibit 1 omitted) The primary benefits of electronic reservations for hotels are the cost and labor efficiencies achieved compared to using the telephone for reservations. Travel agents gain from the convenience and efficiency of "one stop shopping" for all their travel reservations. Guests benefit from the agents' ability to make instant hotel reservations in almost every country in the world.
As recently as five years ago it was not essential for a hotel to be listed in a GDS. Today, however, computer reservation terminals are a travel agent's lifeline, and hotels that want travel-agent business must be listed in a GDS. Understanding the electronic reservation process and using various GDS marketing features will allow hoteliers to market their products more effectively through those systems. This article explains the global distribution network (GDN) and offers specific suggestions that will enable a hotel to increase the marketing effectiveness of its GDS participation.
HISTORY AND EVOLUTION
In the late 1950s, airlines developed computer systems to manage their reservations. The early '70s saw airline computer-reservation terminals installed in travel agencies to enable agents to book airline seats without using the telephone. Airlines expanded their reservation systems in the late '70s to encompass hotel bookings and other travel-related services. During the '80s that hotel-reservation function improved so dramatically that the system shifted from merely being a distribution channel to being an effective, efficient marketing tool. Today, 96 percent of all travel agencies in the United States have computer reservation terminals. In Europe and Asia the percentage of automated travel agencies varies greatly from country to country (see Exhibit 2).
As shown in Exhibit 3, the number of worldwide hotel reservations booked electronically exceeded 13 million in 1992 and that figure should pass 15.5 million in 1993. This sharp increase in electronic bookings is primarily...