Based on 13+ years advising independent hoteliers on distribution strategy, from GDS negotiations to OTA contracts and metasearch bidding, HotelMinder has seen firsthand which channels actually move the needle for small properties.
The short answer: GDS connects hotels to travel agents and corporate bookers through a legacy network, OTAs list rooms directly to consumers for a commission, and metasearch engines compare rates across sites and charge per click. Most independent hotels need OTAs and metasearch. Few need GDS.
You must have encountered these terms before, but the question is how exactly can they benefit your hotel to gain more online visibility and sell more rooms? Join me as we delve into this topic together.
The term GDS stands for "Global Distribution System" and is regarded as a prehistoric relic of the online travel industry. GDSs were initially developed in the 1950s by airline companies to expand the reach of hotel and car rental businesses. They did this by facilitating automated transactions between travel agencies (both traditional and online) and travel service providers.
The three most prominent GDS systems are Amadeus, Sabre, and Travelport. You can read more about them here.
GDS is a tool commonly used by travel agencies to access up-to-date information on the availability and pricing of flights, hotel accommodations, and car rentals across the globe. With this technology, travel agents can swiftly and efficiently respond to quote requests with accuracy and agility.
Typically, hotels pay a commission of around 10% to 15% per booking when selling rooms through GDS, on top of any transaction fees. To make this possible, Central Reservation Systems (CRS) like Sabre enable hotels to sell their rooms to multiple GDS platforms simultaneously. Nevertheless, it's entirely up to the hotel to connect directly with one or two GDS or use a CRS. The exciting part is that different Channel Managers can connect with GDS systems as well.
GDS can be an expensive selling channel that primarily enables the bulk sale of rooms to big corporations (for their business guests) or travel agencies (for leisure travellers). As a result, smaller, independent hotels usually do not need GDS.
For more information on Global Distribution Systems, you can dive into: Global Distribution System (GDS) - The Complete Guide for Hotels
OTA stands for "Online Travel Agency" and has become a vital component in today’s travel industry. With the increasing popularity of the internet, numerous websites have emerged that offer rooms for booking without the need for direct human interaction.
These websites have rapidly gained significant market share. Booking.com is the most renowned OTA, although Expedia (popular for corporate guests) and Hostelworld (preferred for budget-friendly accommodation options) are also well-known.
Travellers find these platforms extremely useful as they allow them to easily compare rates, reviews, and availability of various lodging options in one place. This makes it easy for travellers to book accommodations with just a few clicks.
Typically, hotels have the option to list their property on an OTA without incurring any fees. By providing your hotel photos, descriptions, available rooms, rates, and other relevant information, you can decide how many rooms you would like to sell through the OTA.
It's entirely up to you to determine the availability and rates on the platform. However, you should keep in mind that although listing your hotel on the OTA comes at no cost, you will have to pay a commission of approximately 15% to 20% each time you secure a booking.
We strongly recommend that hotels use OTA to be more visible online, as this offers an opportunity to reach potential guests on a global scale. OTA's typically allocate significant resources towards online marketing, resulting in their listings often outranking other search results for travellers on popular search engines like Google.
Instead of attempting to compete with them, it would be better to view OTAs as an additional sales distribution channel.
While it can be time-consuming to update daily availability and rates by logging into each OTA's extranet, you can simplify this process significantly by utilizing a Channel Manager. This will let you automate or streamline these tasks. Additionally, you can use these few tips to maximize your hotel's online presence with the use of a Channel Manager.
Here’s our handpicked selection of the Top 10 Online Travel Agencies you should connect with today!
Metasearch engines have emerged as a crucial element in the travel industry and have closely followed the advent of Online Travel Agencies (OTAs). These engines showcase up-to-date rates of hotels in a particular destination.
Curious to know the contrast between these and OTA's? Interestingly you may find varying prices for the same hotel, room type, and date on metasearch engines due to their retrieval of rates from multiple OTA's.
Have you ever stumbled upon a website selling your hotel rooms without your consent or knowledge? If yes, chances are high that it's a metasearch engine website.
These platforms, including Trivago, Kayak, Skyscanner, TripAdvisor, and Google, have all incorporated metasearch engine tools into their services.
Fortunately, there is also an option to include a direct link to your Hotel Website and your Booking Engine - as long as your channel manager has a compatible booking engine.
While OTA's typically charge a high commission for each completed booking using the CPA or "Cost-Per-Acquisition" model, metasearch engines use a bidding system and a "Pay-Per-Click" (PPC) model where you pay a fixed amount for each click on your link. Whether or not this investment is worthwhile ultimately depends on your calculations and decision-making.
In today's era, where travellers rely heavily on the internet to search and book hotels, it has become crucial to establish a robust online presence for your hotel. Gone are the days when travellers searched for a single keyword and booked the first available option.
Nowadays, they conduct many different searches and visit various websites before deciding. Therefore, the more frequently your hotel's name appears in search results, the greater the likelihood that potential guests will perceive it as the ideal place to stay.
There are numerous ways to boost your hotel's online visibility. While a GDS may be too expensive for smaller independent hotels, several other options can come in handy.
OTAs are a crucial aspect of the industry, and although metasearch engines may require a bit more technical know-how to manage, they can serve as highly appealing sales channels and are worth considering.
Picking the right mix of GDS, OTAs, and metasearch isn't a one-size-fits-all decision, and getting it wrong is expensive.
Need a second opinion on your channel strategy? Connect with a vetted distribution expert on Lobby for hands-on advice.
Choosing a channel manager to connect all three? Compare vetted channel manager software on the Tech Index, reviewed by hospitality consultants, not ranked by popularity.
Want to go deeper on any of these channels? Browse more distribution guides on the Knowledge Hub.
With HotelMinder, match with vetted hotel experts to solve your operational problems.
Most don't. GDS mainly serves hotels chasing corporate and travel-agency bookers at scale. Independent hotels usually get better ROI focusing on OTAs and metasearch first, and only adding GDS once direct and OTA channels are solid.
Commission usually runs 15% to 20% per booking, though it varies by platform, region, and whether the hotel opts into preferred-partner or visibility programs, which can push the effective rate higher.
An OTA processes the booking and takes a commission per reservation. A metasearch engine doesn't process bookings at all. It compares rates across OTAs and hotel websites, then sends the guest onward, charging the hotel per click instead.
Yes. Google's hotel search results function as a metasearch engine, pulling rates from OTAs and the hotel's own site and letting the guest click through to book on whichever channel they choose.
Technically yes, but it's painful. Without a channel manager, rates and availability have to be updated manually on each platform, which increases the risk of overbooking and rate mismatches guests will notice.
Start with OTAs. They require no ad spend and build initial visibility. Add metasearch once there's a working booking engine and enough margin to justify paying per click.
With 15+ years of experience in supporting hoteliers in optimizing their operations and launching innovative hotels around the world, Benjamin Verot (a.k.a. Ben) is a trusted leader in the hospitality industry and is well known for his industry knowledge and expertise, especially related to operational technology.
Ben started his hospitality industry career as a hotel management consultant, working directly with hoteliers around the world to improve their operations and help them accomplish their business goals. Through his years of experience working with all types and sizes of properties, he understands the challenges that both independent hoteliers and branded properties face.
Using the on-the-ground knowledge that he gained in these roles, Ben launched HotelMinder in 2012, to empower hotels and brands around to the world with the technological and operational guidance necessary to maximize their property's performance, improve guest satisfaction and staff engagement, as he believes that running a hotel should be simple and profitable for all properties. Today, Ben has helped thousands of hotels successfully implement new operational technology and worked one-on-one with 100+ hoteliers in management and operational consulting roles.
Ben is originally from France but has been living abroad for more than 20 years. He currently lives in Dublin, Ireland, with his wife and young daughter.
HotelMinder brings value to independent hoteliers through a Knowledge Hub, a Tech Index, and one-to-one hotel management consulting services. Since 2013, we provide actionable solutions to critical business challenges, while establishing a relationship based on trust, engagement and mutual benefit. We help hotels meet their goals through better operations, smarter software decisions, and clear, actionable advice.
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