GDS study raises concerns over paid for content

The Interactive Travel Services Association and research group PhoCusWright have launched a white paper looking at “the role and value of the global distribution systems in travel distribution”.

The report claims to be the first comprehensive analysis of the global distribution system (GDS) . It also uses proprietary data provided by Travelport, Sabre and Amadeus for its findings. Other PhoCusWright research is used to provide a market context.

The three GDSs provided transaction and transaction value data for 2006, 2007 and 2008.

Headline findings from the report show that the three businesses were responsible for air, hotel and car supplier revenues of $268bn during 2008, processing 1.1 billion transactions.

The GDSs recorded revenues of their own from this of around $9.6 billion combined in 2008.

The figures above only refer to the GDS distribution functions of the businesses, and do not factor in other units such as airline IT, management information systems and hosting which all three operate in.

The three businesses provided PhoCusWright with overall net revenues for 2008 – Amadeus recorded €2.9bn, Travelport $2.9bn and Sabre $2.9bn. Profits are not disclosed.

In the US, the GDSs accounted for 449 million transactions for airlines, hotels and car rental companies in 2008, representing $98.7 billion in total travel value.

This equates to 35% of the total travel market, when measured in supplier revenue, a slight drop from 2006 and 2007 when the GDSs share was 36% in both years.

In Europe, GDSs are less dominant and have seen their market share fall. In 2008 they processed nearly 292 million air, hotel and car rental transactions, representing more than one fifth of the total European travel market, valued at €53 billion in gross bookings.

In 2007, GDSs had 23% share of a market worth €237 billion; in 2006 it was 25% of a market worth €224 billion.

By product category, GDSs had 64% of the US market for air tickets in 2008 and 49% of the European market. They are relatively light in the hotel sector, accounting for only 12% of the market in the US and 4% in Europe.

The study says that GDSs will remain at the heart of travel distribution, although it identified possible negatives which might come into play in the medium term.

Some airlines are considering charging GDSs and other intermediaries for access to their fares, and some – notably easyJet – already do so.

The study warns that “should penetration of the pay-for-content model spread, whereby airlines will compel OTAs and travel agencies to pay for access to some or all of their content via the GDS, the risk is high that this could lead to significant downstream distribution costs for intermediaries and consumers”.

The full Phocuswright white paper is available on

 – Blog post:Amadeus UK boss makes the case for GDS distribution


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