The airline retail ecosystem appears to be overcoming the New Distribution Capability-related teething troubles and is finally getting the technical details right. This means that travel agencies can look forward to taking advantage of some real tangible benefits.
Travel agencies will begin to see some real benefits from International Air Transport Association’s (IATA) New Distribution Capability (NDC) program, though adoption of NDC capabilities and standards are still in the early stages. Agents will soon be able to widely provide differentiated, rich content and competitive offers to their corporate and leisure travelers, regardless of content source.
As John Bukowski, director of global content and distribution strategy at American Express Global Business Travel Network (Amex GBT), explained, NDC has helped open up the discussion around the consumerization of corporate travel and other distribution capabilities that ultimately benefit the end customer.
While ancillary sales have played a significant role in increasing profit margins and have allowed airlines to compete on the basis of price in the past, airlines are now looking to “de-commoditize their products,” he said. “They don’t want to compete to get the lowest price in front of the customer –– they want to showcase the real value of their offer in terms of service and amenities, and NDC standards will help enable that.”
GDS Platforms Are Evolving Into the Preferred Technology Partner for NDC Content
Travel agencies like Amex GBT and ATPI Group are working with Global Distribution Service (GDS) providers like Travelport to improve user shopping experiences, regardless of connection, and gain access to and effectively sell NDC-enabled offers. Adam Knights, regional managing director at ATPI Group, a corporate travel management and events company, said that the ideal situation is for GDS providers to be the source for everything, because “it’s our preferred, aggregated solution.”
Since Travelport’s first NDC-enabled transaction in October 2018, it has scaled its NDC solution offerings to a number of corporate and leisure agencies, including Amex GBT and ATPI Group. Ian Heywood, Travelport’s global head of new distribution, noted that it has focused on fine-tuning the technology as it scales the solutions to a larger number of agencies. Working collaboratively with airlines and travel agencies has been crucial to Travelport’s success.
Bukowski further emphasized the need for more collaboration within the industry by saying that some of the complexities, such as the ability to add policy controls for corporate travel bookings, were initially overlooked with NDC. However, agencies and airlines are working with technology providers such as Travelport to provide smarter solutions –– and expectations from the future are high. “We need to work together as an ecosystem to deliver a solution that’s going to add value to the corporate clients, regardless of connectivity type,” he said.
Travelport is partnering with various airlines to improve the overall usability of NDC based on some of the feedback collected from travel agencies. As a result, Travelport has a new feature called “mini-rules,” which allows travel agents to be more precise while searching for a ticket and get more details about an NDC-enabled offer.
Travelport also launched a new version of its Smartpoint solution for agents to solve other challenges they face, Heywood explained. This version not only allows travel agents to find current offers quickly, but easily identify other upsells available as well. Heywood also emphasized the product team’s focus on improving the user interface. “We want the users to be able to complete a booking with minimal clicks,” he said.
Additionally, Travelport has improved the speed at which solutions are deployed, reduced search speeds for bookers, and ensured that agents have access to new features without having to download upgrades.
Amex GBT is partaking in some of Travelport’s pilot programs, Bukowski explained. The primary goal is to make sure sure that as they deliver all content to their corporate customers, they meet all the capabilities and functionalities needed to support the client. “At the end of the day, NDC is an important part of a broader distribution evolution that should bring value to the industry,” he said.
GDS Platforms Continue to Battle Challenges Posed by Private Channel Restrictions
While the technical advancements made by GDS providers are helping agencies access inventory and NDC content through a single point of contact, travel agencies are aware that some airlines are selling parts of their inventory exclusively through NDC-enabled connections. Knights noted, “What you wouldn’t want to see is a GDS platform delivering a really good technical solution, but still being unable to access the content that an airline puts in their own direct channel. My preferred world is that GDS providers engage even more with airlines to ensure that the content stays in their channel.”
Addressing this challenge, Heywood acknowledged that some airlines are restricting traditional content via the GDSs and are only making it available via an NDC connection in order to drive agency adoption of application programming interface channels. “We will continue to work in partnership with airlines to try to ensure that traditional and NDC content can be booked by agencies via the GDS,” he added.
Realizing the Full Potential of NDC: The Best Is Yet to Come
Knights expresses confidence in Travelport’s ability to deploy technical solutions to improve the experiences of travel agencies and the end-consumer at a fast pace. “GDS platforms are working hard to effectively aggregate that content into one view. We’re working on a prototype environment with Travelport so when an agent conducts a search, he or she will see NDC content in a useful format.”
Heywood is confident that NDC will help personalize offers for corporate and leisure agencies. By offering customization that goes beyond the basic airline services such as managing seat preferences and including ancillaries such as booking a golf bag or in-flight Wi-Fi, agencies can prove their value to customers.
Travelport is also working on adding ancillary purchase options so that agents can assemble bundles for their customers. For example, an airfare bundled with seat selection and extra baggage will help the traveler book everything he or she wants through a single platform in a single transaction. The ability to personalize offers through the use of frequent flyer numbers during the initial search phase is also in the works.
Heywood is not only confident of Travelport’s ability to drive real benefits for travel agencies, but in its ability to be a key enabler for IATA to achieve its NDC goal of having 20 percent of third-party airline bookings be transacted via NDC-enabled systems by the end of 2020. But it is important to call out that airlines have a responsibility to create value in order to achieve this goal –– it should not just be a shift of connectivity, but an addition of value to corporate and leisure customers.
As Heywood explained, “I know that IATA understands that there’s a lot of work that needs to take place throughout the industry, and the wide acceptance of this goal really helps to focus the efforts of all stakeholders. But there are other implications, too. Technically, if an airline can do 20 percent, it means they can transact a higher percentage. While there may be some struggle with certain capabilities, it will put the robustness of the systems to the test –– and that is what we are striving to ensure.”