How Global Distributions Systems Enhance Navan's Inventory Mix
Samantha Shankman
•5 Oct 2022•
Booking travel today is faster and easier than ever before.
With AI technology solutions that serve up relevant flights and hotels based on traveler preferences, traveler booking time is reduced from an industry average of 60 minutes down to just six. There are also more options for how to book. With dozens of well-designed booking engines and travel websites, it’s not hard to find an intuitive UX for airline tickets and make hotel bookings. Behind all travel companies, global travel apps, and ecommerce sites, however, is a complex technology that connects countless data points for consumers to be able to see thousands of options and book flights, hotel rooms, or cars for their adventures.
The foundation of booking technology is built on something called a global distribution system, or GDS.
What is a GDS?
A global distribution system (GDS) is a computerized reservation system for booking airline seats, hotel rooms, rental cars, and other travel-related items. Amadeus, Sabre, Travelport GDS, Worldspan, Apollo, and Galileo are all GDS systems.
Global distribution systems are the vital link in the chain of travel booking. It is a major connective channel that serves up travel supplier inventory such as airline seats, hotel rooms, and rental cars to someone who is booking through a corporate travel platform or travel agency.
The creation of GDS technology was a major turning point in the travel industry and has become one of the most important distribution channels for suppliers.
Airlines created the first global distribution systems, which were originally used in the 1970s by travel agents to facilitate airline bookings. Hotel booking capability was an add-on, along with rental car reservations. Travel agencies found electronic booking via GDS less costly to their operation and began to insist that all products be available for them through these channels.
In the early 1980s, GDS accounted for less than 2% of all hotel bookings. By 1999, it had grown to more than 20%. Today, GDSs manage millions of travel transactions around the world each day.
To reach this scale, GDS providers connect directly with central reservation systems and third-party software to provide travelers and travel agents with the widest depth and breadth of real-time content. GDS then provides this inventory to booking tools.
Unmatched Inventory
Consumers have millions of options when it comes to booking travel, except when it comes to mandated corporate travel solutions. However, corporate travel tools often offer the broadest travel inventory due to their relationships with multiple major global distribution systems.
To make a booking experience unique or even better than an alternative, some online travel agents work with multiple GDS companies to provide the broadest possible inventory. These service providers increase functionality by connecting a variety of inventory sources. Platforms start with the major GDS but then add other inventory channels like New Distribution Capability (NDC), direct connect, aggregators, and online travel agencies (OTAs) to build out a comprehensive spectrum of inventory that any consumer or corporate customer will enjoy. The goal is that every time travelers make a flight booking or hotel reservation, they can find the best choice for that trip without missing options.
How Navan Approaches Inventory
Navan offers a consumer-like experience with a broad range of inventory pulled from top global distribution systems and popular travel sites. Our partnerships with global distribution systems help ensure that we have the industry’s most robust global inventory so that travelers can book the best flights and hotel reservations that meet their needs.
In addition to the GDS providers, which connect business- and leisure-friendly inventory from a computer network of suppliers to distributors, Navan also pulls inventory from OTAs, travel content aggregator/consumer sites, and direct connections such as NDCs.
Let’s explore the specific value of each inventory source.
GDS
The GDS remains the leading source of fares and rates for business travelers. Since GDS work is a somewhat gated source and often costs less for suppliers to distribute rates, suppliers are usually more willing to put negotiated rates—and rates that offer loyalty rewards—into the GDS.
OTAs
Online travel agencies offer a variety of inventory, including low-cost carriers and alternative lodging. The two major OTAs, Priceline and Expedia, own many other agencies and metasearch engines, which encompass a significant part of the online travel landscape. As members of the Priceline Partner Network and Expedia Partner Solutions groups, Navan can access discounted rates and special deals. While travelers commonly do not accrue loyalty rewards on these special rates, they can help save companies money.
Aggregators and Consumer Sites
GDSs and OTAs get most of their rates directly from suppliers, while aggregators, consumer sites, and computer reservation systems combine content from OTAs, wholesalers, and other travel-related services. This provides a breadth of choices and a single access point for rates and fares published in many places.
Direct Connections and NDCs
Direct connections can also be made between a travel management company (TMC) and the travel supplier. Direct connections enable corporate travel tools to provide travelers with a richer shopping experience without the middleman. (IATA—the International Air Transport Association—supports this.) A specific kind of direct connection that can be made with airlines is called New Distribution Capability (NDC). With NDCs, airlines can publish packaged travel bundles and messaging that include ancillary offerings such as club access, premium seating, Wi-Fi, and more.
Navan has direct connections with American Airlines, Southwest, Lufthansa. Southwest Direct Connect allows travelers to take advantage of early-bird check-in, get visibility into banked credit, and make itinerary changes directly within their app or online. In other words, travelers get the experience and benefits of booking directly with Southwest. The Lufthansa NDC allows travelers the same inventory available on Austrian Airlines, Lufthansa, SWISS, and Brussels Airlines, plus the ability to compare, book, and change bundles and ancillary services.
Again, while aggregators and OTAs are accessible to leisure travelers, inventory shared via GDSs and direct connections are generally only made available by a corporate travel tool like Navan. Combining both inventory sources allows Navan travelers to enjoy the choices they want and expect from a travel management partner.
Unparalleled Choice: A Win for Businesses, Travelers, and Travel Managers
Navan has relationships with many suppliers to ensure that travelers can access the widest inventory at the best prices while still earning toward their favorite loyalty programs.
Providing choice is pivotal to driving adoption, and continued usage of corporate travel booking systems since lack of choice is a leading cause of leakage. (Plus, exclusive deals negotiated on your behalf by Navan provide more cost-savings opportunities.)
By working with a variety of distributors and building special relationships with the suppliers themselves, Navan can provide travelers with unparalleled choices that keep business travelers happily booking in the right place. This helps drive cost savings and improves the ability to manage travel.
As a corporate travel solution that provides the online booking platform plus the full service of a travel agency, Navan customers only need to work with one provider for all their supplier inventory and corporate travel needs.