US$268 billion of revenue powered by GDS – study

Guest Writer

Travel industry research authority PhoCusWright released the first-ever comprehensive study of the Global Distribution Systems (GDSs) that provide much of the electronic infrastructure behind airline, hotel, car rental, and other travel transactions. Based on original PhoCusWright research and proprietary data provided by the three major GDS companies (Amadeus, Sabre, and Travelport), the study found that the GDS industry processed more than 1.1 billion travel transactions in 2008 representing more than US$268 billion in global travel sales. The study was commissioned by the Interactive Travel Services Association (ITSA) in the US.

“This study shows the crucial role that GDSs play in online travel agency and traditional business models,” said Tom Parker, Secretary General of ETTSA (European Technology and Travel Services Association), ITSA’s European counterpart. “In Europe alone, GDS transactions accounted for more than one-fifth of 2008 travel supplier revenue. GDS share of revenue is predicted to grow globally over the next year, in spite of the lingering effects of the recession.”

“Global Distribution Systems are the quiet giant of the travel industry,” said Douglas Quinby, Senior Director of Research at PhoCusWright and author of the study. “Although many consumers have never heard of them, GDSs power the billions of electronic transactions that both online and traditional travel agencies use to book airline tickets, hotel rooms, car rentals, and other travel arrangements. By aggregating inventory and rates across thousands of suppliers, GDSs help individual and business travellers by providing more transparency, better access, and increased competition.”

Among the findings of the study:

    
    – GDS companies powered more than US$268 billion in worldwide travel
      revenue in 2008 through 1.1 billion transactions – or more than 2,100
      transactions per minute.

    – Travel revenue powered by GDSs in the U.S. rose from US$93.6 billion in
      2006 to US$98.2 billion in 2007 and US$98.7 billion in 2008, despite
      the recession.

    – GDSs also account for a significant portion of all European travel
      revenue, with 21% of all revenue and 47% of airline bookings in 2008.

    – GDS companies power the reservations and technology infrastructure for
      more than 163,000 travel agency locations and nearly half a million
      travel agents worldwide.

    – The GDSs provide access to more than 550 airlines, 90,000 hotel
      properties, 30,000 car rental locations, and hundreds of major tour
      operators and cruise lines.

    – The three major GDS companies, Amadeus, Sabre, and Travelport, had
      combined corporate revenue of US$9.624 billion in 2008 and employ more
      than 23,000 people.

“If the transaction value enabled by the GDS industry went to a single company, it would rank third on the Fortune 500 list, behind only Wal-Mart and Exxon Mobil,” said Arthur Sackler, ITSA’s Executive Director. “Transactions powered by GDS companies are the financial lifeblood for tens of thousands of travel agents, tour operators, hotels, airlines, car rental agencies, and other participants in the travel industry. We must continue to allow the GDS industry to grow and innovate, so it can provide the critical infrastructure and technology needed to expand the global travel industry.”

The study, titled “The Role and Value of the Global Distribution Systems in Travel Distribution,” derived market data from original PhoCusWright research. The three major participants in the GDS industry, Amadeus, Sabre, and Travelport, also provided PhoCusWright with proprietary transaction and transaction value data from 2006 to 2008 for air, hotel, and car rental bookings. The study was commissioned and sponsored by the Interactive Travel Services Association. The executive summary and full study are available at PhoCusWright’s web site at www.phocuswright.com and on the ETTSA web site at www.ettsa.eu.

About PhoCusWright Inc.

PhoCusWright is the travel industry research authority on how travellers, suppliers and intermediaries connect. Independent, rigorous and unbiased, PhoCusWright fosters smart strategic planning and tactical decision-making.

PhoCusWright delivers qualitative and quantitative research on the evolving dynamics that influence travel, tourism and hospitality distribution. Our marketplace intelligence is the industry standard for segmentation, sizing, forecasting, trends, analysis and consumer travel planning behaviour. Every day around the world, senior executives, marketers, strategists and research professionals from all segments of the industry value chain use PhoCusWright research for competitive advantage.

To complement its primary research in North and Latin America, Europe and Asia, PhoCusWright produces several high-profile conferences and trade shows in the U.S. and Germany, and partners with conferences in Canada, China and Singapore. Industry leaders and company analysts bring this intelligence to life by debating issues, sharing ideas and defining the ever-evolving reality of travel commerce.

The company is headquartered in the United States with Asia Pacific operations based in India and local analysts on five continents.

About the Interactive Travel Services Association

The Interactive Travel Services Association, whose membership comprises Global Distribution Systems and Online Travel Companies, promotes consumer choice, access, confidence, protection and information in the rapidly growing world of online travel. ITSA seeks to develop consensus among industry, consumer organizations and policy makers on issues related to consumer use of the Internet to meet their needs. ITSA GDS members include: Amadeus, Sabre, and Travelport, parent of Galileo and Worldspan. www.interactivetravel.org

Source: Interactive Travel Services Association

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