Every industry tends to orbit around a narrow band of ever-evolving open technology standards. From automotive and insurance to telecoms and travel, “openness” helps players be efficient, transparent and flexible. Best case, it fuels innovation by diverse players across any given ecosystem. The intent is to not only spark invention but to accelerate getting to market with it. And doing so with reasonable investment and commercial benefit — like lower total cost of ownership and higher ROI for all players.
NDC is one such standard in our industry. With a clarion call of “Let’s build airline retailing,” IATA created NDC in 2012, received U.S. Department of Transportation approval two years later, and the first set of official standards hit the ground in 2015.
Adoption – leading to critical mass – can be a key indicator of the success of a standard. Today more than 55 airlines, 14 aggregators, 15 travel sellers – from travel management companies to online travel agencies — and over 50 IT providers have NDC certification. And they share the collective vision to enable airlines the ability to offer each individual traveler a branded, personalized retail experience consistently across both indirect and direct channels. And the ecosystem is growing.
In fact, we were just recognized on February 14th by IATA as NDC Level 3 capable as an I.T. provider, only two months after we announced Level 2 capability. And we are fully propelling toward Level 3 certification as an aggregator this year. Working one-on-one with partners around the world, our dedicated Innovation Team is not only incorporating NDC standards, but giving them broader application so that airlines, agencies and consumers will get the full benefit of what NDC intends to accomplish.
Another key predictor of the success of a standard is the likelihood of consumer demand once products become available. In the case of NDC-enabled products in the travel ecosystem, that demand is already here. Because the expectations for branded experiences characterized by personalization have already been set.
Each traveler around the world is a shopping consumer too. With the world’s largest store in every pocket, these are people who have experienced Amazon demonstrate, “we know a bit about you and based on that, here are some recommendations.” Which by the way, the Amazon recommendation engine is credited with generating more than 35% of their revenue.
Consumer appetite for an always-on (chatbot), instant (Venmo, crypto), personalized shopping experience characterized by agility + speed (Starbucks) is seemingly insatiable. In 200 countries, about 80% of everything people watch on Netflix is based on algorithmic recommendations – personalization that enables Netflix to create more than 250 million tailored experiences. In the personal-care space, German brand Nivea used tech giant Alibaba’s personalization platform to boost conversion rates by 70% and transactions by 150%.
Each of these consumers – who are also travelers – demand personalization from our industry too. And they’re willing to pay for it. This willingness is reflected in the growth of global air ancillary revenue which was US$82.2B in 2017. That is 3x growth since 2010 (US$22.6B). Airlines — not to mention hoteliers, cruise liners and ground transport providers — want to provide this kind of personalization to ensure increased sales and loyalty.
Around the world, carriers are making tremendous investments profitably using data and insights to deliver on such personalization strategies.
With NDC, our focus is on personalization of content in both airline direct and indirect channels. For airlines, it completely transforms their ability to merchandise their offers. Whether they are a low-cost carrier or a luxury experience airline, NDC lays the pipe for different carriers to articulate their unique value proposition their way. But it doesn’t stop there. Airlines will need an end-to-end retailing platform that allows them not only to dynamically bundle offers for different travelers, but to also service these offers with seamless fulfillment.
The value of NDC is fully beneficial to the travel agent and corporate travel manager as well. By leveraging a rich content view of travel options and greater transparency across carriers, travel agencies and travel managers can personalize the end-to-end experience – shopping inspiration, ticketing, fulfillment, duty of care — along with the ability to efficiently manage air bookings across the entire workflow.
Our job, as the world’s leading travel technology company, is to ensure we bring products to market that benefit partners throughout this ecosystem. Our goal? A win-win-win for airlines, agents and our customer’s consumer – the traveler who ultimately wants to do travel their way. Because at the end of the day, “personalization” means winning one traveler at a time.
Learn more about Sabre’s strategy and investments beyond NDC to deliver next-generation retailing and distribution solutions
 IATA NDC Registry
 McKinsey, Retail Insights
 MobileSyrup, Todd Yellin, Netflix vice president of product innovation
 Boston Consulting Group, Profiting from Personalization, May 8, 2017
 CarTrawler Worldwide Estimate of Ancillary Revenue