The GDS Agreement: What it is and why it matters for your travel business
If you own or manage a travel business, chances are you`ve heard the term “GDS Agreement” thrown around before. But do you really know what it means, and why it`s an important part of your business strategy? In this article, we`ll explore the basics of the GDS Agreement, and why it`s worth your attention if you want to succeed in the travel industry.
First things first, what is a GDS?
A GDS, or Global Distribution System, is basically a large database that contains information about flights, hotels, rental cars, and other travel-related services. Some of the major players in the GDS market include Amadeus, Sabre, and Travelport. When travel agents or online travel agencies (OTAs) search for flight or hotel options for their clients, they often use a GDS to find the best deals and most up-to-date information.
Now, what is the GDS Agreement?
The GDS Agreement is a contract between travel businesses and GDS providers that outlines the terms of their relationship. This agreement covers things like pricing and distribution, as well as any special requirements or conditions that the GDS provider may have. For example, a GDS provider might require that a travel business use a certain type of technology to connect to their database, or require that the travel business pay a certain fee for each reservation made through the GDS.
Why is the GDS Agreement important?
For travel businesses, the GDS Agreement is important because it can have a significant impact on their bottom line. By agreeing to use a particular GDS, travel businesses gain access to a wider range of travel options, which can help them offer better deals to their customers. However, they also need to be aware of any fees or requirements that come with that access, as these can add up quickly and eat into their profits.
For GDS providers, the agreement is important because it helps them maintain control over their distribution channels and ensures that their partners are adhering to their standards. This is particularly important in an industry where information can change rapidly and accuracy is crucial.
How to negotiate a GDS Agreement
If you`re a travel business owner or manager, negotiating a GDS Agreement can be a complex and sometimes challenging process. Here are a few tips to keep in mind:
1. Do your research: Before you enter into negotiations, make sure you`ve done your homework on the different GDS providers and the terms of their agreements. This will help you understand what`s available and what to expect.
2. Know your priorities: Identify what`s most important to your business (e.g. pricing, access to certain travel options, easy integration with your existing systems) and make sure you negotiate for those priorities.
3. Be prepared to walk away: If a GDS provider isn`t willing to offer you the terms you need, be prepared to walk away from the negotiation. There are other options out there, and it`s better to find a partner who`s a good fit for your business rather than settle for less-than-ideal terms.
In conclusion, the GDS Agreement is an important part of doing business in the travel industry, and it`s worth taking the time to understand and negotiate the terms that work best for your business. With the right partner and the right terms, GDS can be a valuable tool for offering your customers the best possible travel options.