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Travel Agents Still Rely on GDS for Hotel Selection
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83% of GDS Terminals Receive
Text Messaging/Advertising
by Ray Cohen, President & Co-Ceo, TravelCLICK
October 2003

Recently, NFO Plog research conducted a study of travel agents and their use of the GDS to gather information on hotels.  NFO Plog is a recognized and highly respected research firm that specializes in the travel industry, and has more experience in surveying travel agents than any other research company.

The study concluded that travel agents are increasing … not decreasing … their reliance on GDS systems for hotel information.  Nearly 90% of travel agents say that they use the GDS and GDS shopping displays as much or more today than two years ago.  Travel agents also report increased use of hotel property Web sites compared to two years ago.  Travel agents are now less likely to use printed hotel directories, direct mail, fax, and the phone to gather information about hotels.

The research also analyzed travel agent response to GDS media (promotional text messaging).  Nearly two-thirds of all travel agents are aware of GDS media advertising, a proportion that is unchanged from research conducted two years ago.  Travel agent readership of the promotional text messages continues to have significant influence on hotel choice: 53% of all travel agents who recall GDS advertising report that they made a booking at a hotel at least once in the prior three months due to a GDS ad.

In addition to the research study, analysis was also completed on text messaging/advertising media sent to GDS terminals.   For cost per impression GDS advertising campaigns, ad impressions are sent to 83% of GDS terminals worldwide.  An advertiser only pays for ads delivered to these terminals.  Situations where an advertiser does not pay for ads would include the following:

  • Terminals at selected agencies that have been turned off to GDS messages by agreement with the GDS to support the agency’s preferential booking programs.
  • A travel agency group has created their own user interface that does not utilize the screen interfaces (with advertising) provided by the GDS.
  • Terminals that are not viewed by a travel agent, but instead are being utilized by a robotic program.  This determination is based on an assessment of the transaction speed that would indicate a programmatic application.  In order to make sure that ad impressions are not wasted, advertising is turned off to these terminals.
Promotional text messaging to travel agents is still highly advantageous for hotel marketers based on the following characteristics of the GDS and GDS media:
  1. The travel agent GDS marketplace remains the largest single source of electronic business for the hospitality industry.  In 2003, estimates are that travel agents will book $11.5 billion in room revenues compared to total online consumer bookings via the Internet of $7.5 billion.
  2. The ability to target impressions only to consumers destined to a hotel’s market makes this media highly cost-effective.  For example, a $20,000 advertising spend in a daily newspaper would likely only reach a handful of potential buyers destined to a particular market for a particular date range.  That same advertising expenditure in the GDS reaches 200,000 GDS potential buyers searching for travel to that same particular destination on that particular date range.
  3. Hotels are seeing a large return on their advertising investment through the GDS.  For a typical reservation worth $200 in rooms revenue (two night stay and $100 ADR), only a 0.5% response from travel agents would create a 10 times return from a GDS advertising campaign.  Because GDS media allows precise targeting and travel agents are highly responsive to these ads, this type of return is readily achievable from a properly designed campaign.
Raymond D. Cohen is President and co-CEO of TravelCLICK, a company he co-founded with Richard W. Gray in 1996. TravelCLICK (www.travelclick.net) is the leading provider of solutions that help hotels and other travel industry suppliers maximize net revenue from electronic distribution channels. TravelCLICK's competitive benchmarking reports provide hotels with price and booking performance information unavailable through any other source. The company's exclusive electronic marketing networks allow hotels and other travel related suppliers to target promotional messages to specific travel agents, consumers, and group meeting planners when they are booking travel. The TravelCLICK Interactive division assists hotels with online strategies to increase consumer direct business.

 
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Contact:

Ray D. Cohen, TravelCLICK,  
866-675-4553
300 N. Martingale, Suite 500
Schaumburg IL 60173
www.travelclick.net

Stephanie Seacord
Leading Edge
135 Piscassic Road (PO Box 960)
Newfields NH 03856
T: 603-772-1835
F: 603-772-7066
stephanieseacord@msn.com

Also See: Hilton International Selects TravelCLICK’s RateVIEW / September 2003
On-Line Marketing Strategies: Think Horizontally / Richard Chambers / September 2003
TravelCLICK Clients Report High Satisfaction with RateVIEW On-Demand Rate Comparison Tool; Over 1400 Hotels Worldwide Utilize RateVIEW / August 2003
TravelCLICK Interactive Combines With iHotelier / June 2003
TravelCLICK Gives NYU Investment Conference Attendees Real-Time View of Their Properties’ Electronic Distribution Performance / May 2003
Worldwide Hotel Electronic Bookings Up 4.6% in Q1; TravelCLICK’s eMonitor Now Includes Third Party Internet Bookings from Pegasus / TravelCLICK eMonitor / May 2003
TravelCLICK Reports Recovery for Hotel Bookings on Internet and GDS since Onset of Iraq War - Company Issues Tips to Hotels: Don't Stay Quiet / April 2003
Strategic Hotel Capital Endorses TravelCLICK Products / April 2003
Cornell’s Center for Hospitality Research Partners with TravelCLICK to Help Hoteliers Improve Revenue Management Strategies / April 2003
Hotels Experienced Considerable Growth in Room Nights Booked Electronically Through the Global Distribution Systems in Q4; Luxury Segment Room Nights Booked Electronically Grow 21% / TravelCLICK eMonitor / Feb 2003
Electronic Bookings for Worldwide Hotel Industry Show Improvement - TravelCLICK Issues Third Quarter eMonitor / November 2002
Report on Electronic Bookings for Worldwide Hotel Industry Shows Luxury Segment Leads the Way to HotelRecovery in Q2 / TravelCLICK Issues Second Quarter eMonitor / Aug 2002
Room Nights Booked Electronically Down 10% from the First Quarter of 2001, Revenue Off 18% / eMonitor / June 2002
Worldwide Hotel Room Nights Booked Electronically Through the Global Distribution Systems Down 12% Versus 4th Qtr Last Year / eMonitor / Feb 2002


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