As the New Distribution Capability (NDC) is coming to life in European and Australian markets, North American travel managers need to understand and contemplate the opportunities and challenges that NDC and new content channels will bring.
Just as we are now weaving the sharing economy and consumer-driven tools emerging in the industry into travel programs of all sizes, travel managers must think ahead to be ready for the downstream implications of NDC.
So what is NDC? NDC will allow airlines to use technology to bundle fares and ancillary services and products to consumers. To provide increased personalization to the consumer, airlines seek to package the right offer for each traveler. Thus, NDC is also a way for airlines to package products and services to drive revenue based on travelers’ buying patterns, much like traditional consumer spending outlets.
As we head into new territory, here are 5 potential implications of NDC to consider as you review your travel program:
1. Airline Ancillaries: Review your approach to airline ancillaries. Begin collecting data on the most purchased airline ancillaries among your travelers (i.e. premium seating, meals, baggage fees). Are these purchases enabling travel basics, improving the traveler experience, reducing friction, or providing additional staff productivity on the road? Ancillary data is best collected today in expense systems, from which you can extract valuable data to inform policy choices and decisions.
2. Personalized Pricing: Understand the ramifications of personalized pricing and how it may provide opportunities during your airline negotiations. Based on your most purchased ancillary services, you can design procurement and contracting strategies to leverage or bundle baggage, premium seating upgrades, and more, in your corporate contracts. Use this as an opportunity to improve the traveler experience and reduce costs.
3. Online and Mobile Tools: Start now to close any gaps in your online booking tool and mobile tools. Ensure your travel partners and online booking systems are NDC-ready and have strategies in place to provide visibility to bookings from all available channels. Look to the current ease and approach to integrating non-Global Distribution System (GDS) content available today to weigh the readiness of your partnerships. Is your partner ahead of direct connect and aggregator content today to ensure all available fare and content visibility?
4. Data Collection: Evaluate trip disruption solutions that ensure data collection and traveler enablement. During disruption, there is greater risk for traveler choosing options outside of policy. This is when travelers receive the most direct communications and offers from airlines and many can be booked directly and thus fall out of reporting data streams. Ensure visibility by designing and communicating compliant channels that ensure traveler accessibility, compliant choices, and comprehensive data collection.
5 NDC Certified: Ensure your travel partners are NDC Certified. This will ensure total visibility to all booking channels’ data, include duty of care support regardless of the point of purchase, total volume collection for contract management and optimization, as well as the ability to incorporate emerging channels that may be to come. Check IATA’s NDC-certifications registry and engage your travel partners directly to understand their approach to NDC and how they can assist with program readiness.
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