Organizations in the Distribution Process - Tourism: Principles, Practices, Philosophies - page 159

Global Distribution Systems

The term global distribution system (GDS) is used to describe the large and sophisticated electronic travel
reservation systems in use throughout the world. There are currently three major GDS companies in
operation: Amadeus, Sabre, and Travelport GDS, which includes Galileo and Worldspan. They are
frequently called the legacy GDSs. There are other smaller GDS systems, such as Abacus with a focus on
Asia/Paci c and KIV Systems with a focus on LatinAmerica, but these big three are themost used systems
accounting for the majority of global bookings. Today, they are independently owned companies capable
of handling tens of millions of transactions a day for every aspect of the travel services industry.
It all started in the late 1950s and early 1960s, when airlines created their own proprietary
automated reservation systems to manage booking air travel. By the 1970s, American Airlines ' SABRE

system, TWA ' s PARS system, Eastern Airlines ' SYSTEM ONE system, United Airlines ' APOLLO system,

and Delta Airlines DATAS II system evolved to become the most popular systems in use. In the late

1970s and early 1980s, the airlines expanded their systems to provide service to multiple airlines and
began installing their reservation systems directly in travel agent of ces to provide convenient and
ef cient access for travel agents.
Since then, the reservations systems have evolved beyond just air travel reservations to become
the big three independently owned companies covering all aspects of travel. They are no longer
regulated in the United States, but remain subject to government regulations in Canada and the
European Union. Amadeus evolved from Eastern Airlines System One, Sabre from American Airlines,
Galileo from United

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s Apollo, and Worldspan from Delta, Northwest, and TWA systems. Numerous
smaller companies have also been formed to compete. Many are aimed at geographic, industry, or
language niches inadequately served by the big three. The Interactive Travel Services Association
( www.interactivetravel.org ) calls these smaller systems Limited Travel Distributors (LTDs). An
example is rezStream ( www.rezstream.com ), who is developing GDS alternatives.
The world'sGDScompanieshavecreatednewtrendsintravel distribution. Relying on state-of-the-art
technology, GDSs provide their travel partners with comprehensive services ranging from the simplest
round-trip air ticket to complex global itineraries encompassing air, lodging, ground transportation, tours
and packages, entertainment, cruises, insurance, and more. They deliver a worldwide distribution network.
GDS systems have multiyear contracts with thousands of travel agents to provide access to the broad
range of travel offerings they cover. They also have multiyear contracts with hundreds of airlines to manage
reservations. They continue to handle about 80 percent of transactions.
GDSs are responsible for some of the most important innovations in the travel industry, including
electronic ticketing, travel e-commerce, graphic seat selection, lowest-fare search capability, and the
ability for agents and travelers to view, on one screen, public, private/negotiated, consolidator, and
Web fares.
GDSs Sabre and Amadeus are working on the electronic miscellaneous document (EMD) technology
that will enable fees for airline ancillary services, such as baggage fees, to be paid through GDSs.
Online travel is an e-commerce success story. Online travel companies offer consumers access to
travel and tourism options and furnish suppliers with opportunities to distribute their products widely
and at low cost. Online travel agencies such as Expedia, Travelocity, Orbitz, Hotwire, Priceline, ebookers,
Site 59, Cheap Tickets, and Opodo use the GDS systems; some are owned by the GDS systems.
The GDS companies and online travel companies continue to evolve along with technology.
Continuous change is forecast for these elements of the distribution system.

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THE INTERNET

In today is marketplace it is necessary to talk about the juggernaut Internet as a channel of

distribution. It makes direct selling from the supplier to the consumer more possible than ever
before. In travel, there have always been direct sales, from suppliers to consumers, via suppliers

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