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).

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).

A CRS is solely responsible for inventory management (which is more detailed described in that article). A GDS (if it is involved and there is not direct distribution e.g. through the airlines own website or NDC) combines the inventory management systems of numerous (up to 500) CRSs from major airlines. It depends on the agreements (subject to negotiation) between GDSs and airlines, whether GDSs have several or all fares which are offered by the respective airlines (this is the discussion about full content deals). To make it more complicated, a CRS itself does not have fares (prices) only classes. The fares itself (along with the Fare Rules) are filed by the airlines with ATPCO (Airline Tariff Publishing Company) and the GDSs retrieve fare and fare rules from ATPCO to provide a full picture.

Finally, a new trend is direct distribution enabled by NDC (New Distribution Capabilities). This is a new communication protocol that replaces a protocol which has been around since the 1980s (EDIFACT – Electronic Data Interchange for Administration, Commerce and Transport) with a new standard (XML – Extended Markup Language). Airlines including Lufthansa, British Airways, Iberia and American have announced direct connect initiatives via NDC. They either introduced charges to book through a GDS or will be offering additional capabilities if booked directly through their NDC interface. The other aspect of NDC is that airlines want to take control of the distribution, such as provide offers based on ‘who is asking’, price ancillaries etc. – in order to differentiate from each other.

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. 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 ticketed and paid for in the GDS. Bookings via NDC using the Airline API are done by the airline system.

In the traditional GDS distribution world, airlines filed their fares and fare rules in accordance with a limited amount of single digit classes with ATPCO. The GDSs retrieved fares and fare rules for a specific class of a specific airline from ATPCO and checked the inventory for such class – either in their own inventory cache or directly with the airline CRS. So, indeed, ATPCO is not part of the booking or ticketing value chain other than providing information to the GDSs. Booking and ticketing is carried out by the GDSs. Finally, the billing and settlement is usually done via a clearing house – predominantly ARC (Airline Reporting Corp.) and IATA BSP (International Air Transport Association Billing Settlement Plan).

OTA (Online Travel Agencies) may use the same GDS or multiple GDSs. It’s a choice each agency can make. Fares may or may not vary between GDSs – this depends on the content deals the GDSs make with each supplier (airline, etc.) whether or not the fares are the same or different. There may also be tax differences. If we are talking about a supplier (airline) that has full content deals with the GDSs you want to compare, the pricing should be about the same. Hidden from consumers are also markups. Although not so common with air fares (as agencies get commissions from airlines), agencies can markup their fares or rates any way they seem fit. Agencies may also get negotiated fares (if you bring a lot of business to a certain provider, that provider could provide you with better fares/rates), which they markup to the closest published fare.

Airlines use the CRS as part of their PSS as their inventory management system. It is just as confusing because all of the major GDSs also ‘own’ a PSS and thus the distinction is not done correctly in many cases.

Whether or not an airline lists all or some of their inventory in the GDS is a negotiation between the airline and the GDS. The airline may want to be in the GDS as GDSs offer a huge sales channel. However, the airline also has to pay commission and overrides for distribution via the GDS. The GDSs want to be a one-stop shop and hence prefer to have the full spectrum of all airlines with all fares. Some airlines only want to provide their higher priced fare in the GDS, which is not a preference of the GDSs.

The complexity of using different GDS for agents as well as agencies and TMCs is that each GDS has their own interface (API, Agent Desktop, cryptic screen). Hence, one needs to learn different ‘languages’ (if the cryptic screen is used), work with different graphical user interfaces (such as Sabre Red or Amadeus Selling Platform), or have separate integrations into separate APIs (such as Sabre webservices, Amadeus webservices, Travelport universal API, Galileo webservices, Worldspan DIR, etc.). Exactly this has been a profitable niche market for us since the year 2000: to provide one API (or even Agent Desktop) to all major GDSs, where among others two of the top three TMCs use our services. Obviously, there is also a commercial aspect: agreements with each GDS are required (even if you use an aggregator such as us).

This blog post was originally published on October 29, 2013 and was extended by FAQs due to numerous inquiries on June 26, 2018.


Image by Saranju_foto

This Post Has 42 Comments

  1. Avatar
    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 🙂

  2. Avatar
    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

  3. Avatar
    Thembeka

    Hi Michael
    can you plc help me….i need to know the example of GDS and CRS

  4. Avatar
    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

  5. Avatar
    Imane

    Can u give me please in emphasis point the different between this two GDS CRS
    Utilities,fonctions,departments of using…
    Thank you already

  6. Avatar
    Palak

    I am still not clear with the difference in PSS, GDS and CRS. Could you please expain it in layman terms with an example?

  7. Michael Strauss
    Michael Strauss

    Dear Palak,

    Thank you very much for your question. If you scroll up a bit to my reply on Nov. 26, 2016, you will find some further information. Also, pls. take a look at http://www.travel-industry-blog.com/travel-technology/pss/ where all three ‘systems’ are explained.

    In short (and layman’s terms):
    – A CRS is part of the PSS (so essentially they are the same when in comes to bookings): it is the inventory management of the airline. Like the warehouse of ‘seats’ of an airline. The supplier (airline) is responsible.
    – A GDS is the distribution system how those seats (= inventory) are made available to passengers via sales entities. A comparison (but probably not 100% correct) could be: a GDS is the whole-seller responsible for combining inventory from different suppliers (read: CRSs from different airlines) and deliver it (read: make it available) to the various shops (read: Agencies for leisure travel and Travel Management Companies for business travel).

    Pls. let me know if this helps or if I should try a different approach or go more into detail.

    Thanks,
    Michael

  8. Avatar
    Kieran

    Hi Michael,
    Clear and concise post. Thanks very much.
    Does Amadeus also control the sales-end or just GDS and CRS (through Altea and Navitaire)?
    Kieran

  9. Avatar
    Yogesh Soni

    Hi, my name is Yogesh and I do not have any information about GDS and I want to learn using this application. May I know from where should I start learning about GDS from the starting of GDS? And is there any career future after learning GDS?

  10. Avatar
    Norman

    Hi Michael,

    I have some queries on usage of GDS.

    1) Will an Airline be able to list their offerings on different GDS?
    2) What are the complexity for a retail travel agent to use different GDS?

  11. Avatar
    Olaitan

    Micheal,

    Thank you because the write up was very insightful.
    1) Please can we have the lists of GDS solution companies(Excluding the major:Amadeus,Sabre & TravelPort) both local and worldwide?
    Thank you

  12. Avatar

    […] is now trapped between the claws of two GDSs: Sabre NDC on the API side and Amadeus Altea on the CRS side. Lufthansa, however, kept calm by saying they already have backup players (i.e. […]

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    airbnb property management sydney

    Interesting content. It helped a lot. Thank you.

  14. Avatar
    Eve Hunt

    Good web site you have here.. It’s hard to find high quality writing like yours nowadays.
    I really appreciate people like you! Take care!!

  15. Avatar

    […] me start with taking a look at the history of travel: Airline inventory is held in the Central Reservation System – CRS (which is today part of the Passenger Service System – PSS) and in the old days was made […]

  16. Avatar
    airbnb cleaning sydney

    This blog is very informative. Thank you so much!

  17. Avatar
    Alisha Ross

    Thanks for another informative site. Where else could I get that type of information written in such a perfect method? I’ve a challenge that I am simply now working on, and I have been on the look out for such information.

  18. Avatar
    Ronny

    Hello

    All your articles are very interesting! thank you!
    I have some doubts about the data storage and ticketing process. I will do an example:
    I book a flight on an OTA which use Amadeus and this flight is on an airline which uses Sabre GDS and SabreSonic CRS.
    Now right after the payment, Amadeus will create the PNR and it will issue the e-ticket and so all my data will be stored on Amadeus GDS.
    Anyway since the airline uses SABRE, it will be created also a Sabre PNR. So my questions are:
    1) after the payment, Will Amadeus send my information to the SabreSonic CRS which also stores all my data, ticket information and create a Sabre PNR?
    or
    2) after the payment, Will Amadeus send my information to the Sabre GDS which also stores all my data, ticket information and create a Sabre PNR?
    3) In both case above, is it the reason why in my example the airline is able to modify directly the itinerary (i.e. cancel) on SABRE although it was issued on Amadeus GDS in the first place?
    4) If either 1) or 2) are correct, when the airline changes the itinerary on SABRE why the modification affects also the itinerary stored on Amadeus? How is the changed transmitted from Sabre to Amadeus?

    Thank you in advance!

  19. Avatar
    Mahesh V

    Hi Michael,

    You are very good teacher and have command over travel industry concepts. I read your blogs and find all blogs really informative. Do you have any plans to write book / details on NDC/ One Order / Offer management concepts and related threats to GDS etc due to NDC. Many Thanks.

    Rgds,
    Mahesh V

  20. Avatar
    Max

    Good morning Michael,
    First of all this is a geat article which improve a lot my knowledge on the topic, and well written.
    I landed on this page because I am currently struggling to understand how BSP and GDS articulate. Maybe you could help ? BSP seems to be the point through which datas and money flow but to me, so does GDS for the data part. Then how flights information reach OTA’s ?
    Is the path Airline->BSP->GDS->OTA (“->” being “gives datas to”)
    or Airline-> BSP & GDS -> OTA

  21. Avatar
    Joyce Ann

    Differentiate Global Distribution System (GDS) and Central Reservation System (CRS)? How do they function in the Front Office? Enumerate at least five (5) benefits of both (GDS & CRS) in Front Office Operations. (Do your research on this)

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