The global distribution system (GDS) has always been a central part of the modern travel ecosystem. In our role as a data aggregator and travel technology provider, we support all players–from airlines, travel agencies and other intermediaries to corporate buyers and their travelers–enabling seamless retailing, distribution and fulfilment. When exploring the travel ecosystem, one thing is certain: value chain collaboration and integration is the key to bringing value to the customer and success to your business.
Here, we explore the key players in the travel ecosystem to understand what they care most about and what their pain points are – and, ultimately, how New Distribution Capability (NDC) standards will help them interact more effectively and drive increased value to the modern traveler.
Understanding key players in the travel ecosystem:
Airlines supply the product and merchandise it to drive maximum revenue and brand differentiation, distributing via direct or indirect channels. Beyond the seat, many airlines have successfully unbundled an entire suite of additional products and services, such as seat allocation, meals, preferential boarding and access to online services that were once considered integral to the purchase.
Aggregators like the Global Distribution System (GDS) is a travel marketplace between the airline (and other suppliers) and the agent, aggregating and making sense of the large amount of travel data available. GDS technology provides the indirect shop window for airlines content to travel agencies, providing solutions for managing and fulfilling airline reservations using integrated workflows throughout the lifecycle of the trip. The GDS also provides upstream and downstream solutions for managing the booking, fulfillment, payment and data processes.
Travel Management Companies (TMCs)
Using aggregation technology to analyze and present a comparison shopping experience to business travel clients, the TMC also provides services to corporations beyond travel-booking transactions, such as reporting, consultancy, duty-of-care provision, mobile and online apps and benchmarking. This is overlaid with corporate booking guidelines (policy) to present travel options within an agreed-upon set of rules, to achieve consistent levels of program compliance and traveler convenience.
Agencies and Online Travel Agencies (OTAs)
Leisure traveler-focused agencies, with a brick-and-mortar and/or online storefront, use GDS technology to collect and present comparable travel options and experiences to the end user. They provide a one-stop-shop with a variety of content for the end-to-end customer journey. At the heart of their strategy is the need to better understand and anticipate the needs of their travelers.
Online Booking Tool (OBTs)
Corporate Travel Managers use booking tool technologies to provide an effective user interface for travelers to self-book corporate travel. The tools can be a fundamental part of the TMC’s offering or a stand-alone that is integrated so that content and data flows to and from the same aggregator.
Corporate Travel Managers
Corporate travel managers provide business travelers with access to in-policy travel options, but they also manage the content within a framework of cost, care and convenience to ensure that both the traveler and the corporate’s objectives are achieved.
In a world of increasing choice and decreasing attention spans, travelers demand personalized offers and service via their preferred channels – ranging from physical to digital storefronts and service channels that range from human contact and virtual assistance to advanced artificial intelligence such as chatbots. The biggest driver of change in the travel industry is consumer expectations set by non-travel shopping experiences, such as Uber, Amazon, Netflix and Starbucks.
NDC helps all players in the ecosystem collaborate better to provide an exceptional traveler experience.
What do Airlines want?
Airlines want to merchandise their products and services consistently across all channels, showing customers specific offers that fit their needs and preferences. The creation of customized retail solutions for multiple sales channels is neither financially nor technically viable for airlines. A “one size fits many” approach would provide greater efficiency for airlines while significantly reducing the time to market of further products.
How does NDC help Airlines?
The NDC standard enables airlines to evolve their retailing strategy, showcase their products with rich media, differentiate their brand from the competition and upsell ancillaries across the customer journey. This approach rewards airlines for investment and innovation in the indirect channels, consistent with their direct channels, and improves speed to market of new products.
Airlines won’t become an NDC airline overnight–there’s a methodical approach to building next-generation offer and order management systems. Fortunately, we’ve seen exciting progress in the past year. Today (January 2022), travel sellers can shop, price, book, pay and service NDC orders in 47 countries and counting, for our 5 airlines in pilot or generally available production.
- Singapore Airlines
- Qantas Airways
- Finnair (pilot)
- United Airlines (pilot)
- American Airlines (pilot)
We look forward to bringing on more airlines, such as Emirates and Qatar, throughout this year.
What do Aggregators want?
The GDS’s role goes beyond retailing – it also includes highly automated quality control and fulfillment services. At Sabre, underneath a sophisticated retailing strategy sits a sophisticated data and analytics strategy. Our powerful platform has visibility around shopping behaviors and ancillary booking behaviors, which incubates our broad and deep portfolio of solutions. These data insights allow airlines to provide more sophisticated offers by better understanding travelers’ trip context.
The GDS wants to differentiate through sophisticated aggregation of data and integration of rich, new content into the offer process. It wants to take what the airline is wanting to sell, in the way it wants to sell it and integrate it into a comparison shopping environment, while maintaining current agency workflows around booking management and fulfillment. At Sabre, we want to resolve growing content complexity and provide consistent value to airlines, agencies, travel buyers and travelers.
What do TMCs want?
TMCs want to continue offering the broadest choice, most competitive fares and excellent service. They want to maintain content and price parity that their corporate clients expect. Although not immediately visible to their customers, TMCs also want to ensure that workflows are optimized and that the productivity of their agents – their most costly asset – is not adversely affected by changes in distribution models as this creates inefficiency for their corporate customers. Process consistency across all airlines and mid- and back-office processes (e.g., refunds, changes, invoicing) is essential for productivity and, of course, profitability.
How does NDC help TMCs?
One of the key value propositions of the TMC is comparison shopping. With the growing importance of traveler experience, TMCs are looking to benefit from new retailing models that will allow them to offer richer and personalized content while at the same time maintaining efficient booking management and seamless fulfillment. It remains incumbent on the TMC to ensure that their role as policy gatekeepers can continue and that price and content parity with airline direct channels is achieved. If NDC can truly provide that parity, or even better would be unique content not available direct, then TMCs stand to benefit as it would remove the accusation that cheaper fares or broader options can be found via airline websites and from online travel agencies.
If future releases of NDC can solve for work processes such as interlines, schedule changes and PNR (central booking record) synchronization, TMCs will get a clearer idea of how NDC can be implemented with no impact to customers. Further, TMCs need strong, sophisticated and scalable technology that provides end-to-end retailing, distribution and fulfillment solutions to continue to deliver excellent service.
What do Agencies and OTAs want?
Agencies and OTAs want to acquire, convert and retain more travelers. To achieve that goal, they want access to all available content through airlines, GDSs or other intermediaries in one single place, for easy shopping comparison and fulfilment. While finding the lowest fare is an important purchase-decision metric, travelers also weigh qualitative factors such as the brand perception of the service provider and overall traveler experience. Many agencies/OTAs invest in marketing channels such as TV and social media for customer acquisition and to increase their brand equity.
How does NDC help Agencies and OTAs?
Online and offline travel agencies are looking to benefit from new retailing models that will allow them to offer richer content with personalized shopping and seamless, omni-channel fulfillment. If NDC can facilitate more advanced and normalized air content, it will free up the agency/OTA’s time and resources needed to source and analyze myriad flight options. Instead, they can focus attention on other value-driving content such as lodging, cruise and ground-transportation services or in-trip experiences such as tours and activities.
What does an OBT want?
Similarly to TMCs, it wants to ensure comparison shopping to be able to bring the product attributes to life for the traveler and to apply the policy in a way that the corporation needs. It also needs to be able to provide online self-servicing of bookings, to allow changes and cancellations, and to make the whole experience as user friendly as possible so that adoption of its technology is high.
How does NDC help OBTs?
NDC is designed to provide rich content and personalization for the traveler, to create a better shopping experience. Given that the traveler uses the OBT directly themselves (or sometimes through their personal assistant/team members) the importance of being able to better display the product attributes of the airline offer in the context of the person that has made the shopping request, is a huge benefit. But the value provided in bringing better content to life at the shopping stage should not be at the cost of poorer integration with the TMC when it comes to data and payment or at the cost of being able to amend or cancel bookings – the self-service mantra is key.
What do Corporate Travel Managers want?
Most concerns of Corporate Travel Managers fall into one of three main buckets: cost, customer service and duty of care. Deciding which to prioritize is a delicate balance and will vary from one corporation to the next. While cost remains a key priority for most corporations, the user experience is becoming increasingly important, and many larger firms (particularly in professional services) are focusing heavily on the employee experience.
How does NDC help Corporate Travel Managers?
The way corporate travel managers negotiate with airlines has gone unchallenged for many years. Based either on volume or market share, corporate travel managers make commitments to the airline and, in return, get preferential rates that should beat the market. Yet, these rates are generally static and don’t always include ancillary services that are of value to the traveler. The addition of ancillaries can make a material impact to the overall cost; currently however, this is highly fragmented from the corporate travel manager’s point of view, and therein lies the immediate positive opportunity from new airline-retailing solutions. Taking a more holistic view, travel managers have the opportunity to identify the purposes for travel, the traveler and corporation need and engage in a broader, richer conversation with airlines to bring new products and services which cater to their need and bring increased value to all parties.
The Traveler Experience
Imagine the future: rather than negotiating on specific fare classes with specific discounts, consumers can expect to be offered a bundle of products and ancillaries…and (crucially), policy can be overlaid at the point of sale.
NDC: A win-win-win for the travel ecosystem
Airlines can maximize revenue and differentiate their brand and product offerings.
Agencies, OTAs, OBTs and TMCs get to provide comparison shopping with more contextually relevant offers.
Corporate travel managers get greater visibility into the true cost of travel, as they eliminate the purchase of additional ancillaries.
And travelers receive more personalized offers based on loyalty, purchase history and trip context.
All players in the travel ecosystem stand to benefit from advanced retailing methods like NDC. While airlines are moving at different speeds and retail maturity across the supply chain may vary, we are at a critical point in the evolution of airline retailing. Further proof points must still tested and delivered, but at Sabre, we believe that the time for NDC is now. We are committed to innovating beyond the standard of NDC to build an end-to-end retailing, distribution and fulfillment ecosystem.
The reality is that corporations are going to have to evolve their corporate travel policies. The notion that everything is based on the lowest logical fare isn’t relevant anymore. Quite often, the lowest logical fare isn’t the fare you want the traveler to book. By the end of the journey, they have spent more on ancillaries or their in-trip experience. Evolution from lowest fare to best fare is key and best becomes the definition of your travel program.Kathy Morgan, VP Channel Delivery for Sabre