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Global Distribution Systems and Channels

Explore the complexities of global distribution in hospitality, driven by technology and evolving channels. Learn about GDS, strategies, trends, and the impact on revenue and customer relationships.

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Global Distribution Systems and Channels

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  1. Global Distribution Systems and Channels Chapter 8

  2. INTRODUCTION • The area of global distribution is one of the most complex aspects of the hospitality business and an area that has been greatly impacted by technology change with the rise of new channels or sales outlets. • The term global distribution can be defined in this case as attaining the broadest possible reach to the largest available audience meeting a company’s target market segments at the most affordable cost and with the highest potential for winning conversion (i.e., generating bookings).

  3. FIGURE 8-1 Common Channels Used When Booking Lodging Accommodations INTRODUCTION

  4. INTRODUCTION • The thrusts of distribution are market reach and penetration, branding, merchandising, and revenue generation. • Supporting the global distribution function is a global distribution system (GDS), that, in effect, has become the circulatory system of the lodging organization

  5. FIGURE 8-2 The GDS Ecosystem INTRODUCTION

  6. FIGURE 8-3 The Many Roles of a GDS IMPORTANCE OF GDS • The roles played by a GDS have evolved over time—from one of transaction-based emphasis to one of strategic value—but at any one point in time, a GDS fulfills five important roles.

  7. FIGURE 8-4 GDS-Related Core Competencies Essential for Competitive Advantage IMPORTANCE OF GDS

  8. DEVELOPING A DISTRIBUTION CHANNEL STRATEGY • Finding and Competing for Electronic Shelf Space • Cost Implications • Understanding Share of Distribution • Maintaining Inventory Control: A Daunting Challenge • Inadequate GDS Technology Infrastructure • Inventory and Rate Management Issues

  9. FIGURE 8-5 Distribution Channel Evaluation Criteria DEVELOPING A DISTRIBUTION CHANNEL STRATEGY

  10. DEVELOPING A DISTRIBUTION CHANNEL STRATEGY • Commissions and Transaction Fees Erode Profit Margins • Commission-based agency model • Merchant or wholesale model • Opaque pricing model • Auctions • Pay per click

  11. DEVELOPING A DISTRIBUTION CHANNEL STRATEGY • Rise in Number of Electronic Intermediaries • Shift in Balance of Power from Supplier to Customer • New Models of Distribution and Pricing • Accelerated Rates of Change • Relinquished Control of the Customer Relationship

  12. TRENDS IN HOTEL AND RESORT GDS • Disintermediation and Reintermediation • Digital Divide • Transparency: A Hope for the Future • Bypassing Airline GDSs • Leveraging Technology to Reduce Overhead • Mobile Apps (Applications) • Shopping Bots

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