Is NDC ever going to be a viable reality?
If you’re like me your eyes have glazed over whenever NDC (New Distribution Capability) is mentioned. For years now we’ve been hearing about how this state-of-the-art platform for buying and selling will be a viable alternative to the GDS and will revolutionize business travel and is just around the corner, so….be prepared. Well, we’re still waiting and although there have been some modest developments, NDC is far from the ubiquitous solution we were told to expect.
Viktor Nekrylov, managing partner of DRCT, said it best in a recent article for Business Travel News:
To date, adopting the standard has not been easy for several reasons. Commercial agreements between airlines and travel management companies are a sticking point. TMCs are devoting time and effort in striking NDC agreements with each airline, leading them to question the value of the overall transformation. Travel buyers and retailers want to see bundled offers and be able to personalize content and access more elements, all integrated into their workflows. The current discounted and promo fares won’t cut it anymore.
TMCs and travel managers were scathing about NDC in a recent report from the Business Travel Association. Respondents to a study from the UK-based trade body felt “consistently penalized” by NDC and said promises from airlines had not been met. The travel management community also said the lack of functionality, which I mentioned above, is a barrier to working with the standard and they added that the online booking tools were unprepared to offer the content.
With so many downsides, you might ask why I’m optimistic.
Well, the industry needs to see progress. Airlines don’t want to lose high-value corporate customers. Many have made significant investments in NDC, although the financial benefit to partners is not obvious. While travel sellers receive incentives (read kickbacks from GDS partners), NDC does not imply such direct income. The lack of understanding in how to leverage NDC to increase sales and improve customer satisfaction has slowed adoption. However, I believe this is temporary. To date, several airlines have provided incentive programs for selling via NDC, which can counter the costs agencies incur to access this content and could potentially increase their incomes, even as travel sellers learn to optimize the real opportunities.
Leveraging NDC for Travel Programs
Implementing NDC content into TMC workflows presents a minefield for corporate travel managers, but wider adoption of the standard across the airline industry will mean that travel managers not working with NDC-enabled providers will increasingly find they are not offering full content to their end-users. With all major airlines providing discounted NDC fares, there needs to be a more efficient way for these savings to be passed on for business travel bookings. If a current provider isn’t offering NDC content, it may be time for the corporate travel buyer to look elsewhere. TMCs have their own role to play in encouraging the adoption of the NDC standard and driving change.
A hybrid world of traditional airline distribution methods and NDC-driven channels is likely to exist for some time. But there has been much talk recently of greater collaboration in the travel industry as we work toward post-Covid recovery. In 2022 we will see whether that is just hot air or demonstrates a real desire to work smarter. It’s time to move on from talking about industry nuts and bolts to offering and selling content to business travelers, in an efficient and profitable way that best fits their needs.
Forte Business Travel Services has been keeping its thumb on the pulse of NDC on behalf of our member agencies and we are prepared to be the consultative source for those members to ensure that they remain competitive.
Mark Altman
Forte Business Travel Solutions
516-624-0500 x5072
maltman@travelsavers.com
Source: Click here to read the entire BTN article from Mr. Viktor Nekrylov, managing partner, DRCT
