2009 GDS and ADS exceeds 2007 and 2008 booking volume

Global Distribution System (GDS) and Alternate Distribution System (ADS) were two of the strongest travel distribution systems prior to the recession. The GDS is a revolutionary system that travel agencies and travel agents use to generate hospitality reservations for their clients automatically. The ADS or IDS (Internet Distribution System) is a collection of online reservation systems and travel portals that offer online travel reservation to travelers. Both of these channels act as virtual marketplaces where hotels, airlines, etc. can increase their revenue by offering their inventory to a global situated audience.

During the recession, both channels took a hit but while the number of travel bookings made did fall, they did not completely dissipate. In fact, while 2009 did begin on a bad note - the revenue earned was lower than 2008, the market buoyed as the year progressed. Pegasus, the world's leading provider of technology and services to hotels and travel distributors disclosed the following figures to substantiate its claim that the tide has taken a positive turn for the travel industry:

In December, the GDS booking volumes, which predominantly represent business travel, increased +15.35% over 2007 and +6.28% over 2008; while ADS booking volumes, which predominantly represent leisure travel, jumped  +22.49% over 2007 and +17.18% over 2008.

In light of this recovery in booking volumes, the report highlights the importance of raising rates lowered in 2009 to drive demand, drawing parallels to the post-2001 recovery.

2009 began with a lower ADR (average daily rate) for both GDS and IDS. This negative start resulted in a comparable fall in net revenue. However, the market buoyed especially for the ADS channel as the year progressed. ADR climbed close to 2008 levels in the GDS as the year continued, leading to positive revenue movement of +5.34% for the second straight month year-on-year. However, a colossal increase in bargain-hunting and online shopping through the ADS left 2009 net revenue for the channel -21.92% below 2008 year-end.

Look-to-book ratios for the ADS continued to climb, growing +17.8% in December 2009 versus December 2008, and +54.7% over October 2008. This indicator relates directly to the rise in ADS booking volumes, as well as the channels' depressed ADR. Current indications are that look-to-books will continue to rise, as travelers become increasingly rate conscious and savvy.

To conclude, in 2009 GDS and ADS net bookings were higher than 2007 and 2008. The rising look-to-books are strong indicators of a competitive shopping environment wherein travel suppliers will have to adopt an aggressive dynamic rate strategy to ensure they are capable of returning the high volume of requests in the expected time.

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