The Global Distribution Systems (GDS) industry processed more than 1.1 billion travel transactions in 2008, representing more than USD268 billion in global travel sales. PhoCusWright, in what it calls the "most comprehensive study ever done into the GDS sector" based on original research and proprietary data provided by Amadeus, Sabre and Travelport, found that in the US, GDS transactions represented more than one-third of all travel supplier revenue and almost two-thirds of all airline passenger revenue for 2008.
Despite the recession, GDS companies grew the total bookings they powered in the US from USD93.6 billion in 2006 to USD98.7 billion in 2008, and the study projected them to hold their overall share in 2009 and 2010, despite falling industry revenue.
"Global Distribution Systems are the quiet giant of the travel industry," said Douglas Quinby, senior director of research at PhoCusWright and author of the study. "Although many consumers have never heard of them, GDSs power the billions of electronic transactions that both online and traditional travel agencies use to book airline tickets, hotel rooms, car rentals, and other travel arrangements. By aggregating inventory and rates across thousands of suppliers, GDSs help individual and business travelers by providing more transparency, better access, and increased competition."
The study also found that GDS bookings represented USD81 million in US airline revenue during that year, or 64% of US airline passenger revenue. Travel revenues from GDSs there rose from USD93.6 billion in 2006 to USD98.2 billion in 2007 and USD98.7 billion in 2008, despite the recession and processed nearly three fourths of all online and traditional travel agency sales during 2008.
In Europe, GDSs account 21% of all travel-related revenue and 47% of airline bookings.
Stranglehold over the sector
Among the study’s other “wow” statistics, GDSs power reservations and technology infrastructure for more than 163,000 travel agency locations and nearly half a million travel agents worldwide. They cover more than 500 airlines, 90,000 hotel properties, 30,000 car rental locations and hundreds of major tour operators and cruise lines. Amadeus, Sabre and Travelport, had combined corporate revenue of USD9.624 billion during the year and employed more than 23,000 people.
"If the transaction value enabled by the GDS industry went to a single company, it would rank third on the Fortune 500 list, behind only Wal-Mart and Exxon Mobil," said Arthur Sackler, executive director of the Interactive Travel Services Association, which commissioned the study.
"Transactions powered by GDS companies are the financial lifeblood for tens of thousands of travel agents, tour operators, hotels, airlines, car rental agencies, and other participants in the travel industry. We must continue to support policies that allow the GDS industry full access to travel provider data without unreasonable restrictions, so travelers can continue to get the information they need to make informed travel choices, and the travel industry can benefit from the efficiency of a GDS-based distribution system."
The study, titled "The Role and Value of the Global Distribution Systems in Travel Distribution," derived market data from original PhoCusWright research. The three major participants in the GDS industry, Amadeus, Sabre, and Travelport, also provided PhoCusWright with proprietary transaction and transaction value data from 2006 to 2008 for air, hotel, and car rental bookings. The study was commissioned and sponsored by the Interactive Travel Services Association.