Future of GDS systems and companies
GDS in the travel industry originated from a traditional legacy business model that existed to inter-operate between airline vendors during the early days of computerised reservations systems of the 1950s. Many airline vendors (including budget and mainstream operators) have now adopted a strategy of 'direct selling' to their wholesale and retail customers (passengers) by investing in their own reservations and direct-distribution systems in addition to utilizing one or more GDS systems. Technology advancements in this space facilitate an easier way to cross-sell to partner airlines and via travel agents, eliminating the dependency on a dedicated global GDS federating between systems, but making it more difficult for customers to compare prices among competitors. Some experts argue that these change in business models may lead to phasing out of GDS in the Airline space by the year 2020.
Lufthansa Group announced in June 2015 that it was imposing a additional charge of 16€ when booking through an external Global Distribution System rather than their own systems. They stated their choice was based upon that the costs of using external systems was several times higher than their own. Several other airlines including Air France–KLM and Emirates also stated that they following the development.
However, hotels and car rental industry continue to benefit from GDS, especially last-minute inventory disposal using GDS to bring additional operational revenue. GDS here is useful to facilitate global reach using existing network and low marginal costs when compared to online air travel bookings. Some GDS companies are also in the process of investing and establishing significant offshore capability in a move to reduce costs and improve their profit margins to serve their customer directly accommodating changing business models.