GDS (Global distribution systems) and travel agent bookings remain an overlooked yet lucrative source of revenue for hoteliers, sources said.
The reason these channels are overlooked? It’s because many hoteliers are looking at them the wrong way, according to Mark Haley, partner at the Prism Partnership.
“So many properties fail to exploit it,” Haley said. “Instead of moaning and groaning about travel agent commissions, they should be looking at their net revenue.” Haley said hoteliers can see a boost by marketing through GDSes if they’re dissecting the information in the right way.
“Part of the problem is the incentives,” Haley said. “Revenue managers are pushed to drive (revenue per available room).
But if you push net RevPAR, that’s much closer to finding profitability.” The difference, Haley said, is net RevPAR accounts for distribution costs, which tend to be lower through GDSes than online travel agencies.
John Hach, senior industry analyst for TravelClick, said GDS bookings mark an opportunity for hoteliers in part because of the travelers they’re able to capture.
“Approximately 50% of the business is corporate travelers that will stay at higher-star-value luxury hotels,” Hach said. “That’s premium ADR. Their rate selection is important, too. The corporate traveler will upgrade to a better room type.
Agents are encouraged financially to upsell.” David Jones Jr., GM for the Hilton Garden Inn – Overland Park near Kansas City, Kansas, said his property has seen dramatic growth through GDS bookings in a short time period.
“We decided to advertise on the GDSes pretty heavily for three months,” Jones said. “We saw a $10,000 to $15,000 increase a month for an investment of $600.” Jones said the GDS marketing started in August and the original plan was to cut it off in October.
He said the plan now is to continue through 2016.
He said that quick boost made it a no-brainer to continue. “It’s a great (return on investment),” Jones said. “We’re hoping to get some loyalty out of it and pull back at some point, but we’re kind of scared to now.”