the-difference-between-crs-and-gds-in-the-travel-industry

The Difference Between CRS and GDS in the Travel Industry

Earlier I talked about the structure of the travel industry. We saw how the industry can be divided into five parts: Suppliers, inventory management, distribution, sales and market.

Today I would like to just focus on the distribution and the inventory management and therefore on the differences between CRS (central reservation systems) and GDS (global distribution systems).

In the travel distribution we can find lots of many to many relationships instead of 1:1 relationships. So how do these relationships look like? Well, one supplier provides its fare to many distributors. A traveler on the other side has the opportunity to book inventory from multiple suppliers. How this works? Well, that’s easy to explain: You might want to take a flight from the United States to Europe with your favorite airline and from there you might want to go on vacation and visit Asia. But regarding the second flight, you might prefer a lower price, so you might want to choose another airline.

In this example, you might book your first flight directly via the website of the provider and the second flight direct via an inventory system. That’s why an agency can use e.g. Sabre as a distribution system for booking a Lufthansa flight, which Passenger Name Record (PNR) is then sitting in the Amadeus reservation system (inventory system). As the inventory is managed by the central reservation system (also known as computer reservation system), I would like to shortly give you some information on this. CRS were originally operated by airlines and later extended for the use of travel agencies. So what is a CRS? It is a computerized system used to e.g. store and retrieve passenger information related to air travel, hotels, rail, car rentals and anything like that.

CRS and GDS as two distinct steps

For a long time the GDS had a dominant position in the travel industry, but in order to bypass them and consequently avoid their fees, airlines have started to distribute flights directly from their websites. Another option to bypass them would be to use direct connections to sales entities such as travel agencies. Today approximately every five years GDS are in heavy negotiations about (full) content and distributions fees with airlines.

From time to time airlines and CRSs are also discussing a switch to a new hosting system (inventory system), but this is far less often since it involves a huge technical migration with many risks. American Airlines recently abandoned their envisioned migration from Sabre to HP. Mergers sometimes also require a transition to a combined CRS. So what is important: The GDS usually operate the CRS and that is why most people consider the terms GDS and CRS synonymous. However I don’t! I consider those as two different steps of value creation: inventory management (CRS) and distribution (GDS).

You need more information like how a PNR could be included in the example from above? Just follow my blog – I will get to that later…

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10 thoughts “The Difference Between CRS and GDS in the Travel Industry”

  1. MEME

    WHAT ARE THE EXAMPLES OF GDS AND CRS?
    CAN YOU PLS GIVE SOME?
    CAUSE I NEED TO UNDERSTAND MORE ABOUT THAT AS A TOURISM STUDENT 🙂

    1. Michael Strauss

      Michael Strauss Post author

      A GDS is the Global Distribution System and the major ones are Amadeus, Sabre (incl. Abacus), and Travelport (incl. Apollo, Galileo and Worldspan). The term CRS is not used so much any longer as it became part of a bigger system: the Passenger Service System (PSS) which usually comprises of the CRS, an airline inventory system and the departure control system (DCS). Typical examples of a CRS are Shares from Hewlett-Packard (formerly EDS), but more importantly SabreSonic (Sabre) or Altéa for traditional carriers. For low cost carriers there is also Navitaire (like Altéa owned by Amadeus). I will post additional blogs to this topic so stay tuned. Also my book “Value Creation for Travel Distribution” (http://amzn.to/mstrauss) provides a good insight and is highly recommended for tourism students as well as newcomers to the industry. I used to explain all this to my interns and colleagues before I decided to write a book. Also take a look at https://www.linkedin.com/pulse/siemens-uses-amadeus-cytric-hook-altea-bypassing-gds-save-strauss.

      1. Yuri Olshevskyy

        Hello Michael,
        I’ve been given a task to find out how to connect our small CRS to a GDS provider. However it seems to be a challenging task as there is no clear information on whom to contact. For example if I contact Travelport via their website contact page, no one will respond, which sounds rather strange. Or maybe they are simply not interested in dealing with small airline operators. Any word of advice?

        Regards,
        Yuri

        1. Michael Strauss

          Michael Strauss Post author

          Yuri,
          We are a certified developer of all major GDSs. However, our influence is limited and we also have to be liberal to all the GDSs. I can just advise to continue contacting them via the usual channels. It usually helps if you can provide a business case that will benefit them. In case you have a mutually beneficial business case, I may help as I have been asked by several of my contacts to draw their attention to such business cases. I hope this helps.
          Thank you,
          Michael

  2. Mark

    Hi Michael, I have few questions around NDC if you can help.

    1. What is the messaging threshold of PSS connected with GDS like SABER and Amadeus
    2. What will be the NDC interface with GDS

    1. Michael Strauss

      Michael Strauss Post author

      Hi Mark,

      Sorry for the delay in responding. I’m not sure I understand your question. Can you pls. elaborate? Sabre has a PSS (Sabresonic) – also see http://www.travel-industry-blog.com/travel-technology/pss/ . Messaging between a GDS (or any other system) and a CRS (= a portion of a PSS) was usually done in EDIFACT – however there are also structured interfaces available. With a few exceptions our implementation to the GDS also works with hooking directly into the Altea or Sabresonic system (the exceptions still take 1-2 men years, however this is small compared to our overall solution). NDC is a new standard in essence a new pipe in parallel to EDIFACT. So the best idea would be if the GDSs unplug their EDIFACT pipe and plug in their NDC pipe .. however this will never happen as it would mean that all airlines (around 500) would need to sunset their EDIFACT pipe and move to the NDC pipe. Then there is still an open question about ticketing. Bookings via ATPCo are are ticketed and paid for in the GDS. Bookings via NDC using the Airline API are done by the airline system. I’m actually in the process of writing an NDC article in my series Travel Technology for Dummies where I will try to shed some light in the NDC cloud. However, I want to make sure I answer your question, so pls. reply to this comment with a little bit more specifics. Thank you.

    1. Michael Strauss

      Michael Strauss Post author

      Dear Thembeka,

      A CRS (or Central Reservation System) is part of the PSS (Passenger Service System) which is explained in detail on another of my blog post series “Travel Technology for Dummies: What Is …”: http://www.travel-industry-blog.com/travel-technology/pss/. There you will also find a list of the major PSS/CRS.

      A GDS (or Global Distribution System) is the system that distributes content from the CRSs. Typical GDSs are
      – Amadeus: IATA code 1A,
      – Sabre: IATA code 1S (old:1W) as well as 1B which used to be Abacus, which Sabre acquired (it seems like the name Abacus of the dominant Asian GDS will disappear and be replaced by Sabre Asia Pacific), and
      – the various Travelport systems which include Apollo, Galileo and Worldspan: IATA codes 1V, 1G, 1P.
      Further information and other supplier systems can be found on our own website as we aggregate multiple GDS: https://www.pass-consulting.com/en/industries/travel/travel-xml-api/ as well as http://www.travel-industry-blog.com/gds/ipos-and-fierce-competition-force-gdss-to-withdraw-from-the-battlefield-of-online-travel-booking-sales/.

      Finally, a new trend is direct distribution enabled by NDC (New Distribution Capabilities). Also this topic I explained in a fairly new blog (http://www.travel-industry-blog.com/travel-industry/ndc/), which currently enjoys numerous views (there you will also find further details about the CRS as a system that hosts the PNR (PNR is further explained in http://www.travel-industry-blog.com/travel-technology/pnr/), various distribution techniques (GDS distribution, direct connect via NDC and low cost carrier distribution).

      I hope this helps. Many of the articles on this blog are tailored to explain travel distribution technology. Use the search button on this blog to find answers to the topics you want to learn more.

      Thanks,
      Michael

  3. syed

    I am a new small travel agent. I am using the sabre system for international air fare. Unfortunately, I can not match the price of other travel agents especially the online agencies even though I take minimal profit. Is there any tips you can give me so I can offer better price ? Or should I start using other distributors such as travelport

    1. Michael Strauss

      Michael Strauss Post author

      Dear Syed,

      Let me start off with a disclaimer: We are a technology provider and this blog is tailored to explain technology in the travel industry (or technology that may become or should become part of travel). We provide access to content and inventory from various sources. So, in other words, we provide the pipe to the GDSs. However, we do not get involved in content questions. This is a negotiation you have to have with your content provider. As a certified developer of all major GDS we have to remain neutral and are prohibited to recommend one GDS over the other.

      What you see on the various GDSs are published rates – everybody with an IATA code should be able to see them and they shouldn’t vary too much between GDSs. However, as it is always in retail if you consume large volumes, you can go to your providers and negotiate a volume discount. This is called negotiated rates (or private fares). The ‘provider’ in such case is not so much the GDS, but rather the carrier, property owner or wholesaler itself – in other words the airline, the rental car- or hotel provider or a wholesaler like Booking.com.

      If you provide a carrier through your sales channel with millions of segments, this carrier or provider might be willing to give you a much better rate than the published rate, because you are a good client. Compare it with Walmart or Amazon: how do you want to compete with them on the price? You need to find your niche, where you are better than the large wholesalers.

      I’m not sure if your question relates to air, car or hotel. Air is pretty well represented in GDSs due to full content deals – with the exception of recent developments which outcome remains to be seen (http://www.travel-industry-blog.com/travel-industry/ndc/). Hotel on the other hand is dominated by Booking.com (Priceline), HRS and Expedia who have way more content than the GDSs. These companies allowed many hotel companies to become part of their platform and eventually just surpassed the GDSs and today dictate the prices. Also compare https://www.linkedin.com/pulse/gdss-oligopoly-starting-break-apart-michael-strauss/.

      I hope this helps.

      Thanks,
      Michael

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