In my role, I am fortunate to lead conversations about new distribution (NDC standard) around the world, along with industry-wide representatives from airlines, travel agencies and organisations such as IATA and CAPA. A common theme from these conversations, is that distribution and the NDC standard is a critical disruption to the industry. To collectively benefit from delivering a better, more personalised shopping experience to travellers, all players in our industry need to get on board and proactively advocate for modernised distribution.
What's also interesting, is the diverse concerns and opportunities that are top of mind for travel industry leaders in different regions across the globe. To help drive the industry-wide NDC conversation even further, I am sharing regional highlights on NDC from around the world.
Americas: Personalisation is exciting - and a little scary
During the recent CAPA Americas event in Denver, Colorado, I led a panel discussion on Utilising the Travel Distribution Model… Future Proofing Your Distribution Channel with some of the people closest to air distribution and merchandising at United Airlines, AmTrav and American Express Global Business Travel. At Travelport, we're working with each of these businesses to support their strides in NDC, enabling agencies to book flights - and ancillaries - following this new industry standard, while helping airlines to distribute their full suite of merchandise available.
As the panel "middle man" between a top U.S.-based global airline and two of the most well-known corporate travel agencies in the U.S., here are the opportunities that providers and suppliers are most excited about:
- Eliminating technology hurdles: currently, mutual customers (travellers) must visit multiple channels to alter trips booked through an agency, and comparison shop for the best possible options.
- Alexa and Google-like shopping: greater personalisation capabilities will help partners and providers present fewer, yet highly relevant trip options that best fit the traveller's unique needs.
- A stronger ecosystem: As more, better airline content is delivered to partners (both GDSs and agencies), travellers will ultimately win, with the ability to easily customise their trips at the point of sale - and receive more service support from providers.
Considering the broader Americas audience, there were some questions and concerns raised:
- Trust issues: with providers having access to full merchandising options from airlines, can airlines really trust partners and providers to sell (and upsell) their products appropriately?
- Differentiated content: confusion around NDC remains, leaving travellers and providers alike wondering, how do I know I am getting the best offer available?
Asia Pacific: FSCs, LCCs and travel agents - all in spotlight
APAC is an interesting region to watch with the progression of NDC in, thanks to some unique features of their market. Primarily, through NDC, we are likely to see some changing dynamics between FSCs and LCCs.
APAC is home to some of the best-known LCCs in the world who continued to develop the LCC model. Faced with tough competition from LCCs, including on some longer routes within the region, FSCs are keen to use NDC in order to increase their agility, improve cost-effectiveness and grow their customisation capabilities, delivering more than their LCC counterparts to customers.
In this region, Qantas - a key partner of Travelport - has been a forerunner with the launch of their Qantas Distribution Platform. The Qantas Channel which will allow travel agents to access non-surcharged and NDC content through the same channel. This is just one example of how FSCs are working hard to deliver NDC solutions in an attractive way for their agency partners, to ensure they can stay relevant through providing seamless, integrated travel choice.
In the meantime, NDC also has considerable value for LCC themselves. The majority of LCCs have always used API-based distribution and can capitalise on the shift in this direction from FSCs, through NDC, which may provide opportunities such as inter-lining between FSCs and LCCs using one single distribution standard, which in turn could also benefit travellers.
We should also watch how travel agents, OTAs and TMCs in APAC can be further enabled, by NDC, to serve their increasingly demanding and digitally savvy customers. As is shown in Travelport's 2018 Digital Traveler Survey, there is continuing demand among APAC travellers for consolidated and streamlined travel experience. Two Asian countries -
India and Indonesia - were crowned as the top two countries with the most digitally-advanced travellers in the 2018 survey, recognising the willingness of travellers to use digital tools to enhance the travel experience.
It's fair to say that travellers in APAC are eager to embrace the personalised content and services brought by NDC. Therefore, NDC will be a great asset for travel agents in APAC, supporting them as they continually strive to deliver value to customers by accessing the richest content choice through a single workflow.
I am confident that we will see many positive disruptions to the entire ecosystem in APAC.
Europe: Will competition enhance the traveller experience?
With half of the IATA NDC 2020 Leaderboard made up of Europe-based airlines, it might be fair to assume Europe is leading the way in rolling out NDC. To some extent this is probably true, at Travelport we started delivering our NDC roadmap through live bookings with major European carriers. But like the rest of the world, the fine balance between recognising the benefits of NDC and the potential challenges it may create for some customers is ever-present in Europe, and constantly top-of-mind during our discussions.
To characterise the NDC landscape across Europe, I'd say the major focus is on competition and collaboration.
A lot of the airlines I speak to acknowledge NDC provides an opportunity for increased competition across the distribution landscape, including the potential for more technology providers or aggregators to appear. Harnessed in the right way, they believe this competition could lead to better technology for distribution which could ultimately benefit the whole sector.
In the same way, the dynamic pricing facilitated by NDC will enable airlines to distribute additional fare price points, providing better opportunities to compete with LCCs on particular routes at busy times. NDC will now enable airlines to distribute the same offers through their direct and indirect channels, allowing airlines to better serve all their customers and making agents more competitive.
Airlines' ability to add ancillary content, such as seat selection, additional bag allowances or meals on board through NDC will also mean passengers have access to a wider choice of options on which to base their decisions on who they fly with. This competition should benefit passengers and ensure they only pay for the parts of a trip they see value in. Airlines know they will have to deliver 'bespoke' personalised, tailored booking options in order to stay relevant.
But NDC isn't just about airlines. At Travelport we've seen from the beginning of this shift towards new distribution that its implementation is only going to be successful if all parts of the ecosystem are on board.
Yes, we've got to be realistic. Some of our entrenched ways of working are likely to change. Airlines and travel agents need to work together not just on the technical side of NDC implementation, but on the commercial change it is driving, too. We're having conversations with customers for which there is no precedent. We know our agency customers serve travellers through delivering value through all parts of their trip and that's not going to change, so it's important we are realistic about the enormous contribution they will make to the success of NDC.
So in conclusion, despite a level of uncertainty, there's one thing for sure: travellers should be the ultimate beneficiaries of these changes. As long as we all work together to serve them and their desire for a seamless, cost-competitive, personalised trip, we believe NDC can - and will - work for everyone.
Let us manage NDC so you don't have to.