The global distribution system (GDS) is referred to the network, which is operated by the organizations to conduct automated transactions between travel service providers. Mainly this particular system is operated by the travel and tourism companies such as car rental companies, hotels as well as airlines. The GDS has been most effective to provide an effective and user-friendly platform to compare amenities as well as rates of the hospitality settings. The major advantages of GDS system are easy packaging, enhanced marketing exposure, increased target audience, real time updating of product information as well as reduced manpower. The use of GDS booking has risen significantly within last few years throughout the world. The technological boom has further enhanced the capability of GDS system to make the travel and tourism more easy and effortless. The current report is focused on presenting an evaluated assessment of GDS system, would depict every aspect of GDS in a detailed fashion.
Types of Global Distribution System (GDS):
The global distribution system has been quite effective to enable the organization to initiate automatic reservation as well as transaction process. It has been found out by the hospitality setting in travel and tourism sector that automated system makes the business more profitable and client friendly (Xianget al. 2015). The rapid rise of GDS system since 1970 has become a vast and important interface for conducting business operation. In the contemporary travel and tourism sector four major GDS systems are used quite broadly. These GDS systems are Amadeus, Galileo, Sabre as well as Worldspan.
Figure 1: Types of GDS System
(Source: Law et al. 2015)
Furthermore, the travel and tourism sector also uses several smaller GDS systems in different regions, such as Abacus (Asia/Pacific), Fantasia (South Pacific), Tapas (Korea), Axess (Japan, Infini (Japan) as well as SITA’s Sahara (Thakran and Verma 2013). The major GDS systems are discussed below:
In the year of 1987, SAS, Lufthansa, Iberia as well as Air France founded this particular youngest GDS Company. Amadeus is one of the most popular global distribution systems for its capability to provision of distribution, sales and marketing service within the travel and tourism sector (Law et al. 2014). It has been observed that Amadeus holds largest database as well as data network within the European sphere in comparison with its other kinds. It is capable of serving around 200 markets, which include more than 10500 airline sales officer as well as 57000 travel agency location. The market share held by Amadeus GDS system is mentioned below:
- Worldwide Market Share 37%
- Asia Pacific 33%
- Africa 61.3%
- Middle East 37.8%
- Latin America 42.5%
- Eastern Europe 71.3%
- Western Europe 67.5%
- North America 8.2%
In the year of 1993, 11 highly popular European as well as North American airlines founded the Galileo International GDS system. These airlines organizations include US Airways, United Airlines, TAP Air Portugal, Swissair, Olympic Airlines, Dutch Airlines, KLM Royal Dutch Airlines, British Airways, Austrian Airlines, Alitalia, Air Canada, as well as Aer Lingus. The study of the GDS system market has been revealed that it is most dominating player in the Asia-Pacific, Africa, Middle East, Europe as well as North America region. The major focus of its business has been operating in the innovative Internet-based solutions, leading edge products as well as computerized reservation system in the travel and tourism industry (Xianget al. 2015). It has been tremendously admired by the organization as it is able to expand travelers’ choice by supporting corporate customers and travel agency in the context of value added distribution of travel inventory. The worldwide market share held by Galileo International GDS system is 22%.
Sabre has been founded in 1960s a simple computer reservation system. It has been gradually evolved to the advanced airline yield management system in 1980s. Currently Sabre is highly renowned as a dominating travel website in the travel and tourism sector. Sabre operates with 229 tour operators, 33 railroads, 9 cruise lines, 52 car rental companies, 55000 hotel properties as well as 400 airlines (Law et al. 2015). It has been focused on enhancing travel agency operations through range of services as well as products. The market share held by Sabre GDS system is mentioned below:
- Worldwide Market Share 28%
- United States 30%
In the year of 1990, Worldspan has been found by Trans World Airlines, Northwest Airlines and Delta Air Lines, Inc. It operates with 44 special travel service suppliers, 39 tour and vacation operators, 40 car rental companies, 210 hotel companies, 421 airlines as well as 20021 travel agencies throughout the globe. It focuses on providing ecommerce capabilities, internet connectivity and products, electronic travel information distribution for travel corporations, service providers and agencies (Telfer and Sharpley 2015). The worldwide market share held by Worldspan GDS system is 15%.
Critical Analysis of available Global Distribution System (GDS) Method:
In order to attain Global Distribution System Method, the organizations need to have proper understanding on every Global Distribution system. The following table effectively compares and contrasts between these GDS methods.
It is owned by Travel Port Business. Besides booking airline reservation, it also helps to reserve hotel rooms, car rental, cruises as well as train travel (Bilgihan et al. 2016).
It is a part of Travel Port Business. It focuses on providing ecommerce capabilities, internet connectivity and products, electronic travel information distribution for travel corporations, service providers and agencies (Standing et al.2014).
It is owned and operated by Sabre Holding. It operates with more than 14 cruise lines, 50 rails, 100000 hotels as well as 400 airlines (Buhalis and Foerste 2015).
It is owned by Amadeus IT group. It is popular for booking, hotel rooms, car rental, cruises and train tickets (Chung and Koo 2015).
Any organization can link to these GDS methods in a very cost effective price. The organizations just have to pay one-time setup cost of $400 to $1500 and a monthly charge of minimum $ 50 to $150. The organizations also can pay $10 to $15 per reservation without taking any licenses (Sigala 2017).
Use of IS systems in Travel and Tourism Industry:
The GDS system is one of the most popular and largely used IS systems, which allows the organization to link the car rental services, airlines, hotels with the buyers in a singular system. The travel agent, travel services as well as end users benefit from the GDS system from these IS system (Gretzel et al. 2015). The major benefits of GDS system that drives the business operation towards enhanced efficiency and profitability are discussed below:
The GDs system can effectively enable the properties to offer bundled packages, which may include lots of associated services to the trip. In this context, the enhanced communication between various service organizations enable the properties to provide a air transportation, ground transpiration as well as hotel stay facilities within the same trip package or plans (Huanget et al. 2017). It has been quite effective to reduce the complexity and confusion between the service groups as well as tourists. The organizations have been able to provide greater rate and ensure increased profit margin at the same time.
Figure 2: Use of IS system
(Source: Hunter et al. 2015)
This investment in GDS system also increases the marketing exposure for the hospitality settings. Moreover, the GDS system also cut down the marketing costs, which is a great contributor of the overall profitability of the hospitality settings. The GDS system is also quite effective to reach larger numbers of target audience with your service offerings (Hunter et al. 2015). Therefore, it can be easily understood that GDS system helps the organization to attain greater marketing benefits without investing in any marketing events.
In the context of reaching unexplored segments of the target audience the GDS system offers a great deal of scope to the organization. The GDS system is popular known for an immense source of corporate travelers. The ease of instant travelling planning greatly encourages the corporate travelers as well as business entities to rely on the GDS system (Werthner et al. 2015). The increase customer base effectively enriches the organization potential in attaining efficiency and profitability.
The GDS system also actively assists in the business communication of various organizations. It has been quite efficient to update the product information quite conveniently in the real time. In addition to that, the organization has been able to modify their prices or offers according to the change in the rates (Park and Lee 2014). This way the agents had been offer modified deal to the clients in real time. It has been a greater booster for the organizational efficiency in the travel and tourism sector.
The GDS system has been also successful to reduce the manual effort from the organizations’ end in the context of relaying information to one point to another. It has been proven as steadfast means of enhancing organizational efficiency by eradicating the human errors in the business operations (Ko and Kirsch 2017).
Recommendation for Web Presence:
In the contemporary advanced world every individual look out in the internet for background study before making any decision regarding trip. In this context, every travel agency needs robust web presence in order to be successful in the competitive market. There are several paramount advantages which can provide an intense competitive edge over the rival travel agencies. It has been observed the major benefits, which are provided by an effective web presence are dynamic visuals, increased marketing exposure and thereby performance as well as better technological alignment. The web presence creates an instant positive impression regarding reliability, professionalism and convenience.
Despite of range of benefits, a web presence cannot ensure effective success if it has not been found with significant planning. The Tiger Travel Ltd must concentrate on several crucial strategies, which defines the efficiency of the online presence. These strategies are discussed below:
Initiation of official website:
The official website plays a significant role in the growth of the business. It provides a greater opportunity to the business organization in terms of conducting several marketing strategies. Official website provides a platform that enables the customer to reach out to your business. In addition to that, it is quite effective to notify your accomplishment, capability and offers to the customers. In order to initiate an effective official website Tiger Travel Ltd must focus on several attributes of the websites. These below mentioned attributes determine the quality of the web presence. The attributes are
- Professional outlook
- Convenient use
- Frequent updating
- Mobile friendly
- Short website load time
- Attractive content
- Enhanced visibility
- Improved Data Analysis
Figure 3: Recommendation for Web presence
(Source: Created by Author)
Online advertisement in social media:
Tiger Travel Ltd also can enhance its web presence by providing online advertisement to the social media website. In the contemporary world majority of the populace is linked with the social media website. There are numerous social media platform, which provide greater opportunity for the organization to reach out towards potential clients. Tiger Travel Ltd needs to focus on Facebook, twitter as well as Instagram for reaching out to the customers. The Instagram account would immensely help the travel agency to showcase photos from successful trips. On the other hand, the public-oriented Facebook can be utilized as the major platform to communicate with the customers in terms of attractive trip offers. The Facebook advertisement facilities will enable the travel agency to reach out billions of potential customer. In addition to that, Tiger Travel Ltd can post their advertisement video and demo trip video to the Youtube account. It will also encourage the viewers to make contact with the organization.
In order to acquire a vigorous web presence, the organizations also need to consider the cost efficiency of these activities. The cost of the web presence activities are depicted in the following table:
$10 - $20 per year
$100 - $250 per year
$250 - $600
$1000 - $10000
$300 - $1500 per month
$500 - $2000 per month
$500 - $3000 per year
Changing Role of the IS Manager:
The larger the firm, the more business activities tend to be occurred under the umbrella of any travel and tourism company. In this context, the IS managers play a significant role in the success and sustained growth of the organization. There are several areas the managerial body needs to consider with the growth of the organization (Pekkola and Rantanen 2014). These areas are discussed below:
The management body need to appoint specialized team for handling the IS systems throughout the organization. Although the handling of IS systems are fairly easy, it presents significant challenges in analyzing the data and take proper actions in those context.
Figure 4: Changing Role of the IS Manager
(Source: Pekkola and Rantanen 2014)
Development of formal management structure:
The organization also need to make the IS managerial body as an separate department of the organization. It helps the managerial body to undertake crucial decisions independently regarding the IS systems. In addition to that, a structuredmanagerial department would be able to attract greater talent within the organization (Huanget et al. 2017). This way the organization would not feel any crunch in its workforce regarding the IS system personnel.
With the growing business activities of the organization The IS manager must focus on the good governance of IS systems. The IS systems play a significant part in the success of the entire organization (Pekkola and Rantanen 2014). Therefore, it is evident that IS managers must focus on good governance of these systems. The IS management must employ a specialized team for reviewing the efficiency of the IS systems. It will be able to monitor the IS systems properly all the time. It will eradicate the chance of hindrance in these IS systems.
Taking Part in the business planning:
The IS systems are highly effective to produce actual data of the day to day business activities. It is therefore can be used as an most effective tools for identifying the current business scenario. In an established and hierarchical organization, these information immensely help to undertake most informed decision regarding the business strategy (Park and Lee 2014). Therefore, the IS Managers need to take part in the strategy planning meeting as they would have a greater source of information of the market.
Adoption of the innovative technology:
In the current world, the advancement of technology is the most rapid and dynamic factor. The ever-changing nature always keeps the organizations at their toe, as any innovative technology can produce greater competitive advantage (Huang et al. 2017). Therefore, IS managers need to be informed and ready to adopt any innovative technology that is compatible with the IS systems. In other words, the IS manager also have to play the role of change manager in IS system sphere.
The above discussion has been most successful to identify the role of Global Distribution system (GDS) in the Travel and Tourism Industry. The report has been able to disclose that there are four GDS systems, which are largely practiced around the travel and tourism industry. It has been also able to analyze the GDS methods critically. It has also discussed several benefits of GDs systems which are effective for ensuring efficiency and profitability to any hospitality setting. In addition to that, the discussion has been also quite successful to recommend Tiger Travel Ltd several major strategies, which would help the organization to have a robust web presence. Furthermore, it has also disclosed the changing role of IS managers in the context of growing business activities of any travel and tourism organization. In other words, the discussion has been able to provide greater understanding of GDS system so that Tiger Travel Ltd can effectively initiate it.
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