Distribution systems in the hotel industry

Definition and related terminology

A distinction is made between global distribution systems (GDS) and alternative distribution systems (ADS). These are also known as indirect booking channels (compared to direct channels such as telephone, walk-ins or the hotel website).

Originally, many years ago, there was only GDS: This system is, so to speak, a network that enables service providers (travel agents and agencies) to access inventory in real time. This enables them to book hotel rooms, but also flight tickets or rental cars for their customers. A well-known example of this is the GDS of amadeus.

With the introduction of the Internet into more and more parts of our (private) life, alternative distribution systems have developed. This includes third-party websites that give the end user — i.e. our potential hotel guest — direct access to hotel availability and prices. That is why today there is also the term IDS: Internet distribution system as a synonym for ADS.
This includes OTAs, travel portals, travel search engines and, for example, airline websites with direct hotel booking options.

Significance today and in the future

It is estimated that over half of hotel bookings today are still made via direct sales channels. Walk-ins and central reservation offices account for a small proportion. Direct hotel contacts still account for a relevant share (reservation by e-mail or by telephone). However, this share has been falling dramatically for years. In return, the importance of the hotel website for bookings has grown significantly.

Distribution systems as indirect sales channels also account for a significant share of bookings. The proportion of ADS has grown steadily over the last 10 years. All trends show that this development will continue.

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The increase in the proportion of bookings made via the hotel website and ADS was primarily at the expense of direct, personal contact. It was and is therefore important for every hotelier to address the topic of online travel agencies and ADS in order to use this development for their own hotel. Read more about this in our blog post.

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