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.
Blog Series: Travel Technology for Dummies
- What Is Full Content?
- What Is a Booking Reference or PNR?
- What Is Overbooking?
- What Is a Passenger Service System (PSS)?
- What Are Booking, Waitlists, Tickets, Codeshare & Interlining?
- What Are Active and Passive Segments?
- What Are Incentives, Commissions & Overrides?
- What Is a ‘Married Segment’?
- Blockchain in Travel: All You Need to Know – for Now
- What Is the Difference Between Fares, Rates and Tariffs?
- What Is NDC?
- What Is Continuous Pricing?
- What Is Direct vs. Indirect Distribution?
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).
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This Post Has 42 Comments
Can u give me please in emphasis point the different between this two GDS CRS
Utilities,fonctions,departments of using…
Thank you already
Hi Micheal,
Can you please elaborate a bit more on the statement “Bookings via ATPCo are ticketed and paid for in the GDS”.
Why is this so? Isn’t ATPCo only responsible for fare distribution where does it factor in the booking and ticketing value chain?
Regards,
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
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
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
Hi Michael
can you plc help me….i need to know the example of GDS and CRS
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
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
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.
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
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.
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 🙂