The leading global airline lobbying group is promoting a study that says corporate travel buyers will like its effort to change the technical standards for distributing airfare content if they are better educated about it.
The study confirms the suspicion that most travel managers have relatively low knowledge of what the New Distribution Capability (NDC) effort is all about. Their overall attitude toward it was neutral, on average.
The study, “Global Travel Manager Perspectives & NDC”, produced by Paul Tilstone at the consultancy Festive Road, and commissioned by International Air Transport Association (IATA), is based on interviews with 17 corporate travel buyers from five continents.
The study suggests that an education effort reaching corporate travel managers could win them over. That's a task that the just-formed IATA Travel Manager Advisory Group has taken on.
The study also suggests that the biggest hurdle the advisory group will have to overcome is a fear among some travel managers that NDC "will increase the practice of price and content variance by channel."
In the study's words:
"This single concern essentially underpins the majority of travel manager pain-points referred to earlier in the document – that programme management, data and procurement capability are all undermined by traveler access to content outside of preferred channels."
IATA has several responses to this concern, one of which is that "the NDC Standard will enable a more transparent shopping experience, without negatively impacting corporate travel policies and controls."
In IATA's words, "NDC is a travel industry-supported program launched by IATA for the development and market adoption of a new, XML-based data transmission standard that is intended to enhance communications between airlines and travel agents."
The report says that the travel managers they spoke to represented companies that do in excess of $3 billion a year in business travel expenditure and are thus representative of the industry as a whole.
Multiple views across the spectrum are shared in the report. Said one travel manager (made anonymous for the report):
"I consider NDC Negatively. I have a gut feeling that airlines are not being helpful in giving us transparency and IATA wasn’t open from the beginning – therefore hidden agenda. The need to change from 70’s GDS standard to a more modern standard is fully supported BUT NDC is the next revolution in enhancing yield management and revenue management and the benefit to the corporate is all to be determined."
Said another travel manager:
“I generally consider NDC positively. NDC is inevitable, but also a much needed update of present distribution formats. In other words – it is an opportunity, but should be monitored / influenced carefully in order for corporate needs not to be bypassed ...”
Another travel manager:
“Airlines will differentiate price by channel and no matter how hard we try to get the content we can never be sure. We will need to price audit constantly.”
A slim majority of travel managers that the study's authors spoke with thought travel management companies (TMCs) were threatened by NDC-style technological shifts if they didn't adapt. Here was one quote from the report, from an anonymous travel manager:
“To a certain extent, yes, the TMC is under threat. They seem to rely on the processing of the ticket and as this loosens up they need to demonstrate more value”
Three key travel manager concerns
The report summarizes the top travel manager concerns globally in the following way:
"First and foremost travel managers want to see “fare distribution equality” – i.e. the same fare regardless of channel. This was selected by 87.5% of participants and by 100% participants from LATAM, APAC and NORAM.
Secondly, travel managers wanted to see revised contracting practices with most of the comments surrounding the inclusion of ancillary services within contracts although other requirements in this area varied considerably, from more financial transparency through to challenges with data collection clauses.
The third priority was the loading and access to corporate specific fares although there is limited narrative around this subject and we would suggest that this was an area that IATA and the airlines could explore as it directly relates to the opportunity for NDC corporate specific fares."
Clearly, there remains a lot of education and persuasion ahead for IATA if it is to make NDC-style bookings widely accepted on its proposed timetable.
The full report is free and downloadable, here.
EARLIER: Is the travel industry ready to embrace NDC?
NOTE: Tnooz and IATA have partnered to encourage collaboration in the travel tech development community and will host THack @ Hamburg 2015 ahead of this year’s World Passenger Symposium (October 20-22). The purpose of this initiative is to bring NDC to the developer and start-up community.
THack @ Hamburg is a hackathon to focus on creating applications and tools to enhance airline passengers' travel experience and explore new airline merchandising opportunities.
THack will showcase IATA's NDC data transmission protocol through sandbox APIs, and will also feature sponsor APIs from the broader travel marketplace.
Developer teams from travel suppliers, technology solutions, mobile app builders and student developer communities are encouraged to register and create applications that enhance the traveller experience.
THack will be held Saturday and Sunday, October 17-18 at a location in Hamburg yet to be announced. The results of the hackathon will be shared as part of the World Passenger Symposium.
Click here for details on how to register for THack @ Hamburg 2015.
NB2: Image of travel manager courtesy Shutterstock.