Modern Retailing - Next Generation Partnerships

Over the past decade, the travel industry has been navigating the adoption of new technology in an attempt to standardize the distribution of airline content. Developed by the International Air Transport Association (IATA), New Distribution Capability (NDC) is a set of technology standards that modernize and standardize the way air travel products are distributed through various channels, including travel agents, travel management companies, and third-party platforms.

NDC enables airlines to provide more dynamic and richer content, facilitating a more personalized and seamless booking experience for travelers. The shift from Global Distribution Systems (GDS) allows airlines and travel sellers to communicate more directly, fostering innovation, flexibility, and improved customer service in the ever-evolving travel industry.

The Introduction of NDC

The introduction of New Distribution Capability (NDC) content forced a change in the dynamics between suppliers and travel managers, offering a transformative approach to how travel products are presented and managed. NDC promotes a new era of transparency and real-time communication. In theory this two-way exchange should enable travel managers to convey specific client needs and preferences more effectively, enabling suppliers to tailor their offers and ultimately increase sales and bookings. Both parties stand to gain from this collaboration but the introduction of NDC has not come without challenges.

While there are upsides for suppliers; better understanding of market demands, the opportunity to optimize product offerings and improve overall customer satisfaction, and for travel managers the chance to negotiate for more favorable terms and access a broader range of personalized operations for their clients, but access to NDC fares has been problematic.

TMC’s have accused airlines of moving too quickly, not allowing enough time for the development required to legacy systems and corporates are frustrated that they can’t always access NDC fares. Just this week, American Airlines, have backed down from their aggressive distribution strategy; an early adopter of NDC and modern retailing, the airline restricted content for third parties but have been forced to back down following industry pressure.

Data at the Center

At the center of the new relationship dynamic between supplier and travel manager is data and while NDC adoption is slower than many would like the opportunity for a modern, more personalized retailing experience will be worth it. The wealth of real-time and detailed information provided by NDC allows travel managers to gain deep insights into client preferences, booking behaviors, and travel patterns. Armed with this data, travel managers can engage in more strategic and informed negotiations with suppliers, tailoring offerings to meet the specific needs of their clients or business travelers.

On the supplier side, access to comprehensive data allows a more nuanced understanding of market demands, allowing for agile adjustments in product offerings and pricing strategies. The data-driven collaboration allows both parties to swiftly adapt to industry trends, optimize services and deliver a more personalized and satisfying experience for travelers. In the NDC era, data becomes the currency that fuels a dynamic and mutually beneficial partnership between suppliers and travel managers.

A Turning Point

The introduction of New Distribution Capability (NDC) marks a pivotal turning point in the airline industry, reshaping the dynamics between suppliers and travel managers. The collaborative and data-driven nature of NDC sets the stage for the industry’s next steps, where adaptability and shared insights become the cornerstone of successful partnerships. As we navigate this transformative era, it’s clear that the use of data as the new currency will propel the industry forward.

The focus now shifts to the strategic utilization of data for anticipating market trends, tailoring services, and enhancing the overall travel experience. Looking ahead, the industry’s trajectory lies in those who not only embrace NDC technology but also leverage data intelligently, paving the way for innovative and personalized solutions The NDC era serves as a catalyst for the next wave of industry advancements, where collaborative relationships and data-driven strategies will shape the future landscape of travel management.