Basic Hotel Types and Services
Hotels offer travel companies blocks of rooms to sell every night at a reduced or net rate. The travel companies sell the rooms on their various points of sale.
The travel companies specially negotiate these hotels and charge the customer for payment in full at the time of purchase. The travel companies are merchants of record in such cases. In other words, when customers look at their credit cards, they will see a charge from the travel company for the cost of their room.
GDS hotels are made available to travel companies through their GDS systems. These hotels are offered at the same price that is available to any other travel agency.
GDS hotels are not charged in full at the time of booking because the travel company through which they are sold is not the merchant for this transaction. The customer’s credit card is charged in full by the hotel at the time of check-in. When customers receive their credit card bills, they will see the hotel name listed and not the travel company name. A customer’s credit card may be charged at time of booking if a deposit is made on a GDS hotel.
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Concepts and TerminologyConfidential, TRX Inc.7 November 2007