Modern Retailing And MACROSCOPE Trends 4,5 & 6

PAUL TILSTONE SHARES Insights From IATA World Passenger Symposium 2022 Part 2

In part 1 of my insights into the IATA World passenger Symposium I focused on the potential for “Accessibility” to change our wider perspective on corporate travel. But the primary reason for my attendance at the conference was to focus on modern retailing/NDC and facilitate dialogue across an industry stakeholder group representing the whole value chain.

So, what did I hear and learn from that event when it comes to modern airline retailing.

NDC Fatigue Gives Way to Modern Retailing Dialogue

The value chain appears more aligned than ever on driving airline retailing into a more modern era, but there are still challenges to overcome. And one of them is “NDC fatigue”.

With NDC launched more than a decade ago, the very topic seems to elicit groans and strong emotions because of the time it has taken for the industry to adopt.  Of course, NDC is just one aspect of modern retailing and in some ways, the poster child for change that’s been needed for a while.

Whilst now isn’t the time to switch off from NDC, moving the rhetoric to a dialogue of “modern retailing” seems to move us on and have everyone aligned, despite the challenges still faced by the sector.

And we should celebrate the progress that has been made, it just isn’t ubiquitous or always correctly identified.  Servicing has been cracked by some and there’s plenty of NDC content out there to consume.  It just hasn’t all made its way through the indirect, corporate channel yes.  But it’s coming.

NDC Approach Reflects Airlines’ Strategies

In the beginning, when NDC was first announced in 2012, it was framed as a mechanism to reduce distribution costs.  But whilst this was clearly part of the mix for some, as time went on it genuinely felt like most airlines were looking to use NDC as means to create a better experience and more value.  Maybe it was a convenient distraction, but our sense was that it was genuine and achievable.

Post pandemic, based on the rhetoric coming from main stage at the IATA conference, it’s fair to say that reducing distribution costs seems to have risen up the agenda for some, and I guess that’s not surprisingly.  So, does this mean we will not see industry-wide value development for some time as airlines push the same types of products through NDC pipes to take advantage of any cost savings?  Quite possibly.

This could be the story of 2023, and the products and services we are all hoping to come from NDC to reinforce the value of managed travel programmes may need to take a relative back seat for a short while.

Buyer Use Cases – Demonstrating Real Success

Buyer behaviour seems to be changing and some are looking for alternative paths, to bring content to their travellers.   It’s not just because they find the pace of the NDC content being delivered a little annoyingly slow, but because there’s more pressure on them to demonstrate the value of the travel programme than ever to their corporations.

And there are use cases of success out there, plenty if you look hard enough.  Some involve the TMC, OBT and GDS.  Some don’t.  But regardless of the chosen pathway, seeing and hearing these case studies is incredibly valuable to the corporate travel community as it illustrates progress.  Kim Hamer from Visa wasn’t at the IATA Conference, not in-person, but she was there in spirit as her recent achievements in building an NDC pathway to bring content to her travellers was referred to time and time again.

But “Be NDC Aware” was also a message that came through loud and clear.  Many seemed to be saying that NDC is beginning to become a competitive advantage for intermediaries in the business travel space, and that means that verifying the reality of your technology partner’s claims about the reality of their new distribution capabilities is key.

OBTs Are In Buyer Sight-Lines

Whilst a number of TMCs appear to be making good progress, and some have even secured aggregator acquisitions or long-term relationships to manage API connections for the future, it isn’t by any means fair to say that all TMCs are now rushing headlong into an NDC world.

And it certainly wouldn’t be fair to say that OBTs are too.  In fact, both the TMC and buyer representatives at the conference were aligned in their view that the OBTs need to make better progress, faster. The industry is relying on it as the OBT acts as the visual link between the airlines and the corporate travel programmes.

So, all in all, a sense of progress despite the challenges such a gigantic industry transformation that NDC presents. It was clear from this conference that alignment around the principle of modern retailing was greater than ever.  And it is clear that 2023 will see much more progress from everyone in the value chain.  But it was also clear that we shouldn’t underestimate the amount of work still to do and the implications on corporate travel programmes until that work is done. If you’re a buyer out there who doesn’t understand what NDC is and what it means for your programme, making sure you do and asking the right questions of your suppliers has never been more important.

For a little help, find out what NDC means to your travel programme in this NDC Readiness Guide which FESTIVE ROAD created for IATA