In search of a competitive edge, price transparency, and the ability to offer better service to their customers, travel agencies find value in indisputable data provided by aggregators such as Airlines Reporting Corporation (ARC).
New kinds of distribution channels, connections, digital storefronts, and partnerships in the airline industry are facilitating wider distribution of airline content and increasing fragmentation of data. Online travel agencies, aggregators, global distribution systems, and all other players in the airline retailing ecosystem have their own data pipelines.
For travel agencies, stitching together these fragments of data to create a holistic picture of a market or a passenger is crucial so that they can find the best offer for the customers, continue to provide support when travel is disrupted, and deliver a personalized service and deals. But this is becoming tougher to accomplish with new entrants and disruptive technologies in the industry.
“Today, no agency can effectively service their customers and compete without access to the right data-driven insights,” said Peter Vlitas, senior vice president for airline relations at Travel Leaders Group. Travel Leaders Group provides booking, customer service, and marketing solutions to 6,000 company-owned, franchised, and affiliated travel agencies and represents 52,000 travel advisors worldwide.
For Travel Leaders Group to empower its travel advisors and agencies to compete and win, they need access to a lot of data about the end customers and the market demand. “We track average ticket prices, and we evaluate them against various impact points,” Vlitas said. “We understand what impacted the average prices over the course of a year, such as fuel prices, higher demand during holidays, or an increase in seat capacity on a particular route. Then we take all that data into account in order to actually validate that we are giving our end customers and our travel advisors and agencies a good price.”
But how can Travel Leaders Group or any travel agency gain access to such nuanced and detailed data in such a fragmented industry? Vlitas said that it relies on intermediaries such as Airlines Reporting Corporation (ARC) to provide that indisputable and verified data. Industry-owned ARC is governed by a board of 10 airlines and settles more than $94 billion in transactions a year between 240 airlines and about 12,000 travel agency locations, which gives it access to a huge amount of data around indirect airline ticket sales. It enhances that database with additional direct airline-to-customer transaction data through a partnership with International Air Transport Association. And, as it continues to evolve its airline retailing offerings, its repertoire of insights is only expected to grow and become more valuable.
For example, ARC provides a business intelligence tool that allows corporate and leisure travel agencies to look at their transaction data and understand if the agency has fulfilled its contractual agreement around spend with an airline, if certain markets are trending better than others, and even evaluate the agency’s performance in individual cities and countries. These insights can then be used to leverage agency booking volume to negotiate better deals with the airlines and provide airlines with insights to grow their business. “For example, if we see a higher demand on a particular route or a particular time of departure, we can go back to airlines with data around that need,” Vlitas said. “It’s a win-win: All airlines want to grow their business, and it allows travel agencies to better serve their customers and clients.”
ARC has taken a collaborative approach to create these win-win situations. As part of the product development process, it works closely with Travel Leaders Group. On their part, Travel Leaders Group provides critical insights and recommendations to create a solution that best meets the needs of travel agencies. Such ongoing initiatives help enhance ARC’s offerings — the data and analytics tools it provides to the airline industry stakeholders.
Additionally, by using the same source of data that airlines use, travel agencies can feel more confident and secure about the conversation they are about to have with airlines. This is not a travel agency’s data or the airline-only data that is open to interpretation — it is a centralized or aggregated source of truth.
This kind of diverse and reliable data helps travel agencies improve the shopping experience and the service experience they offer their customers. “When it comes to the shopping experience, customers are looking for the best deal — not just when it comes to the price of the ticket, but rules of booking as well,” Vlitas said. “At any given time, we have 16 analysts downloading ARC data via various tools and using it to find the best deals for passengers. Customers today can look at metasearch websites and online booking tools, but most of the time, our travel agent is getting the best and most relevant offer for them.”
As airline retailing becomes more omnichannel, Vlitas is confident that ARC will become even more crucial to offering greater personalization to customers in the future. This streamlined flow of data through ARC provides transparency. “And this transparency is key for travel agencies to not only effectively compare different fare classes, but also to be able to service reservations made via other booking channels,” Vlitas said. “Today, ARC is the common denominator. If the traffic still flows through ARC, we can measure it and compare it. We have transparency, reliability, security, and honesty.”
An impartial aggregator of data such as ARC empowers travel agencies with insights that allow them to negotiate better volume and demand-based deals with airlines, strengthen airline relations by reporting back on live demand data, evaluate its own performance and market share, and then ultimately use these insights to drive operational efficiencies and competitive advantages. As airline retailing evolves, the role of such aggregators is only going to become more crucial for airlines and travel agencies to not only enhance the shopping experience but also improve the servicing that comes with each ticket sale.