Travel Agents Still Rely on GDS for Hotel Selection

By Ray Cohen, President & Co-Ceo, TravelCLICK

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.

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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 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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