A central reservation system may be linked to other large reservation systems forming a GDS. The GDS –sabre was founded in the 1960s by four major North American airlines, most prominently, the American airlines. Later , in the eighties and nineties, several other GDS came into existence. These are generally based on the various airlines reservation systems.

It is computerized system in which reservation-related information is stored and retrieved for multiple organizations. Selling of hotel rooms is accomplished by connecting the hotel reservation system with a GDS.

Through a GDS  a person can not only book hotel rooms but also cruise liners, airlines, and even car rentals.

Listing a hotel on an airline system means that it can immediately be booked by travel agents worldwide. As travel agents are also suffering from shrinking commissions because of the fall in airfares, they agents target hotel bookings also. The ability to view room availability and room rates electronically are attractive features, as telephoning every hotel is expensive in terms of both, telephone charges and time spent. Using a GDS, a travel agent with a client flying to London can easily check availability of hotels on the required dates, find out what room rate each hotel is offering, and make the booking electronically in few seconds and at minimum cost. Carrying out the same booking by telephone would be expensive and long-distance phone calls might have to be followed by a fax to confirm the details, which together would make the transaction unprofitable for the travel agent. As a result, many agencies opt for booking rooms only electronically.

The type of reservation system that a hotel should use depends on its booking profile. If most of its bookings  come from local sources or from personal recommendations, a property-based reservation system would be sufficient. However, if m,ost reservations are made by travel agents or other international sources, the hotel would consider using electronic distribution through a central reservation and global distribution system. The most popular GDS are Sabre, Galileo International, Amadeus, and world span. An example of the use of GDS  is explained here.

Ramesh, a resident of Bangalore, wants to study in either London or paris. He had appeared for the entrance examinations and has been shortlisted by a few universities at both locations.  Ramesh does not have any idea about hotels in the UK or Paris. He wants a single-point solution to his travel to both locations.

GDS is a solution for students like Ramesh, any traveller , or tourist . With the help of a GDS, Ramesh can book his airline  tickets from Chennai to London, and also choose from various airlines, their schedules, and tariffs. He can also opt opt for for hotels based on their on their locations, proximity to universities he wishes to visit, their facilities and tariffs, and book rooms accordingly. He can also book a ticket on an Euro-rail from London to Paris from Chennai itself. This would make Ramesh’s tour comfortable and free him from the hassle of finding rooms at unknown destinations.

Thus a GDS is a very important technology innovation for the Travel Industry.

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