So, what do you want in your online hotel booking application – Custom inventory, GDS, or a combination of both?”
“Umm, I am not sure actually. Let’s go with the custom inventory though.”
“OK and why do think it is feasible for your business?”
And the client shrugged.
I tell you, this is the exact scenario in the application development arena for the booking of the online accommodation portals.
The clients are not quite technically sound when it comes to the selection of the booking tool and of course budget plays a major role.
While the price tag of GDS is seemingly unattractive to the client’s pocket, majorly the request for proposals that we and similar businesses like us get are for the integration of the custom inventory.
And why not, the hotels pay to get listed.
There’s nothing wrong with either of them. The main challenge faced is when the booking of the rooms are cancelled.
This indeed is the biggest barrier in the development of online hotel reservation application system. You should read a brief about one such interesting development case study incident.
Let us first get to know what the buzz is about the custom inventory and GDS.
Global Distribution System
A GDS is used to link services, rates, and bookings consolidation products and services across all the three travel sectors i.e. airline reservation, hotel reservation, and car rental services.
The basic customers of GDS are the travel agents who lets the customers book their accommodations which are run by a standardized system.
This system holds no inventory and is held on the vendor’s reservation system itself.
The GDS used across the world for the development of booking portals are:
Amadeus is a multi-GDS services company which distributes your inventory and content to the world’s global distribution systems
Galileo GDS provides global distribution services for the travel industry with advanced computer reservation software, top of the line travel system and web services XMLs.
Sabre Travel Network is a global business-to-business travel marketplace and consists primarily of global distribution system (GDS)
The worldspan travel software offers e-distribution and travel information, products and connectivity along with e-commerce capabilities.
Abacus GDS and Abacus API integration enable the travel agencies to enjoy enhanced productivity and efficiency for the purpose of meeting the business needs.
Sabre Travel Network is a global business-to-business travel marketplace and consists primarily of global distribution system (GDS)
Expedia and Sabre already have a long-standing technology partnership in which Sabre provides global distribution services to Expedia.com and other Expedia Inc. brands.
Custom inventory on the other hand, is among the most significant sources of revenue for the company.
A custom inventory is a shelf application which can be operated from multiple locations.
Here in, all the data, changes, updates in the system is to be manually updated into the system. Such pre-built software application is to meet the overall functionality, ease of adaptability, multiple language support, etc.
The custom inventory is much more reliable for the data entries and is a powerful revenue generation tool for the booking portals as for every listing they make, they make money.
This was about the global distribution system and the custom inventory.
So now the question arises how to gauge what is practically more feasible for a particular business that even eases out the cancellation policies?
To answer to this question, I will give insights about how the cancellation policies of hotel booking apps categorized in the industry
The online travel agency Expedia collects and aggregates data from thousands of travel service providers. It has got its own website and their own travel agent app; it allows the customers to look at and compare travel options.
An online travel booking system or a website will capture the booking requirements provided by the traveler on the website.
The website could be linked to a property management system for real-time updation of service availability.
The user will have to provide necessary information like name, e-mail address, contact information, check-in/check-out date, number of rooms and other travel arrangement required.
Once the travel arrangements are finalized, the user can proceed to make the payment using a secure payment gateway. The travel booking system will capture the booking details and transfer it to the property management system or to the back-end term which will make the necessary arrangements.
In Expedia, the rules and restrictions associated with the hotel and room type booked to determine whether the traveler is eligible to receive a refund. Expedia does not charge fees for any changes in the schedule or cancellations.
But it is also important to know that when the hotel charges such fees in accordance with its own policies, the cost will be passed on to the travelers to pay.
Also, there are some room types that are non-refundable from the time they are booked.
Speaking about the hotels, they will generally charge fees if cancellation occurs within 48 to 24 hours of the scheduled arrival.
Thus for Expedia the rules and policies changes on the basis of the hotel and room type.
Orbitz is a travel fare aggregator, travel metasearch engine and booking platform for the hotels, car rentals, flights, cruises, and vacation rentals.
On Orbitz, the hotel rooms are listed for the users to choose from the users to select using the filters provided by the site. The users are then redirected to the payment options.
Here the users can make payments by using multiple options. There are two ways of doing it – either pay the total amount online or reserve the deposit which is based on the following schedule:
- First night + tax (after booking)
- The deposit will never exceed the total cost of the booking.
- Any hotel fees will be due at the hotel in the local currency.
- Orbitz will not charge the users for any booking made.
In Orbitz, the booking cancellation is based on the policies of the different hotels. Here the rules and regulations of the hotels define the eligibility criteria for the refunds to the travelers.
When the hotel charges cancellation fees in accordance with its own policies, the cost will be passed on to the travelers to pay.
Summarizing, even Orbitz go with the global distribution system and automatically the hotel booking and policy data is extracted and coded as per the platform.
TripAdvisor is an online travel agency which provides hotel bookings as well as the reviews of travel-related requirements. It works as an aggregator, custom inventory, as well a booking platform.
For the booking of hotel rooms, when the user logs enters the details of the trip and their preferred room, they are shown the best deals from other travel agencies and the users can select from among those listings and can make their bookings.
Once they select the platform they want to book their rooms from, they get to aggregate the prices for different booking platforms.
On selection, they are redirected to that platform, make payment, and book their accommodation.
TripAdvisor unlike other travel agencies follow the custom inventory method. Here, the listing of the hotels is done manually.
This calls for a subscription charge from the Travel portal to the hoteliers.
Once the listing is done, they follow a standard policy wherein they provide the same cancellation policy and refund for all the hotels that choose to partner with them.
This means that the TripAdvisor outlines the cancellation conditions and indicates whether the travelers should expect a refund or not.
Kayak is a fare aggregator and a travel portal search engine for the users to redirect to the booking sites and make their reservations.
The portal helps the travelers to compare the prices for the rooms which are listed on different platforms.
The users can choose the best deal and can make the booking on the platform they are redirected upon.
The booking cancellation policy that is followed by Kayak is custom inventory. This helps to have well-evaluated purchased decisions based on the reorder level and minimize the unnecessary storage with a better inventory manner.
The bookings done using Kayak have a hard-coded system for the cancellation and refunds.
Based on these policies and the eligibility criteria of the travelers, the users are availed with the refundable amount.
Hotels.com is a website for booking hotels room online.
Talking as of the present day, the portal links about 325,000 hotels in approximately 19,000 locations.
The inventory of hotels.com includes hotels and B&BS, condos and similar other commercial lodgings.
The booking here is done from the platform itself.
The cancellation policy for Hotels.com highly depends on the hotels and their pre-decided refund policies.
So, in some of the hotels the users can find free cancellation policy, while in some the users can find a non-refundable policy.
The inventory information is automatically integrated in the GDS system and all the agents and B2C users can get the same seamless flow of information and can cancel their booking accordingly.
Booking.com is a travel portal which helps the travelers aggregate the prices of the different platforms and choose the most affordable one out to f the listing.
The portal today has got 1,200,000 properties listed under its brand name that to in 225 countries and books 1, 200, 00 room nights per day.
The users can select the deals they feel suits them the best and can book accordingly.
Once the room is chosen, they get to direct to another platform where they pay for the accommodations and the room is booked for their name.
The platform provides free cancellation policy before the day of arrival itself.
Moreover, there are no pre-payment and the payment is made once the travelers arrive at the hotel on the day.
Booking.com makes use of the Global distribution system for fetching the data of all the policies of the hotels.
HomeAway is a vacation rental marketplace which touts itself of having more than 2,000,000 vacation rentals in 190 countries.
It offers an extensive selection of rentals for families and groups to find the accommodations such as cabins, condos, castles, villas, barns, and farm houses.
The booking on HomeAway is quite simple – the travelers only need to put on their schedule and place to visit and there they will be provided with a list of accommodations.
Here the booking is done from the platform itself and the tedious process of getting redirected to the hotel is eliminated.
The involvement here is of the two front stakeholders – the one who lists the property and the one who rents.
HomeAway follows the GDS administration tool and allows the owners to make their own cancellation policy and feed the same in the GDS system.
On the basis of the property and its cancellation policy, if the travelers fulfill the criteria of getting the refund, then and only then they are provided with the amount of refund.
Yatra.com provides the booking services for flights, hotels, homestays, buses, and trains.
The travel portal lets the user with the best deals and discounts for the rooms they select and provides them with the option to proceed to the online payment gateway system.
It charges a service fee on all the domestic bookings.
Yatra.com makes use of global distribution system, a fully integrated platform with multi-selling and multi-listing features.
The system combines low effort management with automatic update on all online sale channels; independent online hotel presence with the hotel’s own brand at low costs, and truly dynamic packaging.
Yatra.com lets the user cancel their booking on the basis of the different policies mentioned by the hoteliers.
MakeMyTrip is an online travel services including flight tickets, domestic and international holiday packages, hotel reservations, rail and bus tickets, etc.
MakeMyTrip has got all sorts of hotels widely ranging from luxurious to cheap and as it states, it offers the best deals to the users.
It helps the travelers find a hotel which suits them in every possible way. It claims to have the largest database in the country it is operational is and makes extensive use of GDS system.
The cancellation policy of MakeMyTrip makes the use of the Global distribution system.
The large computer network passes the inventory and rates of hotels to MakeMyTrip and then the listing is done by the portal on its platform.
The cancellation system is only for the hotels and it does not apply to the flights, buses, and other trip bookings.
Thus, when a user wants to cancel the booking, the refund is availed to him only if he is he is eligible for it under the hotel policies.
Goibibo offers a variety of travel service including the booking of flights, hotels, certified stays, bus, trains, and car rentals.
The traveler selects the number of days, preferences, along with their contact details.
Once all the information is filled, the users get directed to the payment site and can make their payment.
The property is booked for the time span and an e-mail validating the same is sent to the travelers.
The cancellation policy of Goibibo is based on the GDS system. Herein, the Hoteliers are the ones who fed the data about the rooms available on their portal along with their cancellation and refund policy.
If the users clear the eligibility criteria for the refund as per the norms of the hotels they have made their booking with, they can avail the refund.
The Agoda.com is an online rooms and flight booking platform. It is a travel aggregator website and a travel search engine.
Talking of today, the network includes more than 125,000 hotels worldwide.
The website allows users to book flights and lodgings including hotels, bed and breakfast, rest houses, and home stays.
The company collects upfront payment for room nights booked on the Agoda.
From the listings, the users can select the room they want to book and can directly book from the platform itself, quick and simple.
The cancellation policy or booking conditions link can be found in the middle of every page of the booking form. The same will also be stated in the confirmation email that they send to the travelers.
Agoda.com uses the GDS administrative tool to list the hotels and the related policies.
If the travelers cancel their booking , the cancellation policy will be shown again upon cancellation. Here the details and the conditions in the policy will be different for each booking depending on the hotel, period of stay, room type, etc.
If applicable the refunds will be given to the users.
If you are thinking to develop a platform like Expedia or MakeMyTrip, TripAdvisor or any platform listed above, it is important for you to know what it uses to extract the data from the hotels.
And of course with your innovation you can on your own come up with your requirement and we can help you with the feasibility issues.
If the application is to be launched in an area that covers a lesser number of hotels, than custom inventory can be recommended while for the platform that is launched with a futuristic view to accommodate a large number of hotels we recommend GDS integration.