TravelCLICK have released results from a survey that indicates travel agents are highly influenced by Global Distribution Systems (GDS) advertising. Conducted by NFO Plog Research, the study shows approximately 60% of all travel agents are aware of advertising via GDS media, a proportion that is unchanged from research conducted two years ago.
The research shows travel agents respond strongly to GDS media, which is used primarily by hotels. Among travel agents who recall seeing an advertisement on the GDS, 53% report that they made a booking at a hotel at least once in the prior three months due to a GDS ad. “Travel Agent response to GDS media has increased compared to the research we conducted two years ago,” said Sheri Lambert, president of NFO Plog. “Agents are more likely to research or book a property as a result of being exposed to this media.”
The research study also demonstrates that travel agents are increasing their reliance on GDS systems for hotel information. Nearly 90% of travel agents say that they use their 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 less likely now to use printed hotel directories, direct mail, fax, and the phone to gather information about hotels.
In cooperation with Galileo, Sabre Travel Network and Worldspan, TravelCLICK also released statistics today regarding the reach of GDS advertising. For these three GDS, media is sent on a cost per impression basis to 83 percent of 470,000 terminals worldwide, and an advertiser only pays for these impressions. 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 that has created their own user interface that does not utilize the screen interfaces (with advertising) provided by the GDS. In almost every case, a GDS is aware of this situation so that advertising can be turned off to these terminals. A tiny proportion of travel agencies (less than 0.5% of all agencies) may be utilizing a custom user interface without the knowledge of a GDS.
- Terminals that are not being 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.
“The GDS remains one of the most critical and productive marketing channels for a hotel,” said Roland Tanner, president of the Hotel Electronic Distribution Network Association. “The travel agent GDS marketplace remains the largest single source of electronic business for the hospitality industry, and, although we are seeing large volume growth in the Internet distribution channels, the GDS is still a much larger source of room night revenue compared to the entire Internet channel.”
“The small number of terminals that do not receive GDS media are largely at agencies that have preferential hotel programs, so advertisers are only paying for impressions that have a higher likelihood to shift share and generate bookings at agencies that are unbiased with respect to hotel choice,” said Ray Cohen, president and co-CEO of TravelCLICK. “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.”