Brands can’t afford to prioritise one distribution channel. NDC will only work if key players collaborate, says Amadeus’ David Doctor
We live in a time when the boundaries between the digital world and our physical experiences blend like never before.
If you walk into the Burberry store on Regent Street, London, and place your favourite wallet on a special surface, a video showing you how it was made and the details of its craftsmanship will automatically play. Whether you’re shopping for that wallet on Burberry’s website, on the high street, or at a department store, you can be confident that you will receive the same quality service and product.
Like the fashion industry, travel is aspirational, too. Travel retailers have a unique opportunity to create customised retail experiences that inspire customers across all touchpoints. A fashion company would never penalise its customers with inflated prices for walking into a flagship or retail store, and the same should hold true for travel sellers wanting to build brand loyalty with their customers.
Consistency is key
At Amadeus, we see the next generation of retail as being all about delivering a personalised and consistent experience across all channels and all touchpoints, and along the whole journey. Like Burberry, travel brands need to reach customers whenever and wherever they’re feeling inspired to make the purchase – be that via the travel seller’s ‘flagship store’ (its own website), with their favourite online or offline travel agent, or with their travel management company (TMC).
Improved merchandising options through distribution channels and new developments using NDC (New Distribution Capability) will make consistent retail offers easier to create than ever before. However, it is only through collaboration across the industry that these offers will successfully be delivered to travellers demanding consistency, transparency and choice.
A solution that works for airlines but not for TMCs or travel agents will penalise travellers, and that’s not in anyone’s interest. As NDC was created by IATA (International Air Transport Association) to address indirect distribution, it stands to reason that it should address the needs of TMCs and travel agencies.
That’s why Amadeus is working closely with airlines and our travel agency partners to find a solution to the distribution needs of today and tomorrow. Within the context of NDC, our vision is to develop an integrated solution that can be widely adopted by TMCs, travel agencies and airlines to deliver sustainable results on a scale that matters.
The objective is to ensure easy adoption in the marketplace with minimal disruption and to meet the business objectives of all parties. This requires a stable standard that is implemented in a uniform manner by airlines and the industry.
Collaboration across the industry matters, because travel agents and TMCs continue to play a critical role in airline sales, and this shows no sign of slowing down. Amadeus estimates that travel agents and TMCs channel some 50 per cent of all global air bookings (including low-cost carriers).
They also represent an even higher yield per passenger (we estimate approximately 34 per cent higher on average) because many indirect bookings represent corporate travel, complex itineraries and long-haul travel. Over the last year, the relevance of indirect distribution is visible in everything from sales growth through to the number of airlines signing new distribution agreements.
And the reason for this is quite simple: the global distribution system gives airlines and other travel providers the ability to display their flights and get bookings in real time, 24 hours a day, seven days a week, at an estimated average cost of 2 per cent of sales.
Those are levels that even Burberry might envy. Regardless of the changes in technology that may be coming, the business model is independent. We continue to believe that the GDS commercial model is the most beneficial for the whole industry.
What’s more, customers expect the same quality of service whether they’re shopping for holidays or wallets, be it online and offline. Travellers don’t care what connection is used to sell them a seat.
They care about the services, the user experience and integration provided with that technology, such as their ability to easily change a ticket, add an extra bag or get lounge access.
Fortunately, the travel industry is expanding: travel and tourism is expected to grow by 4 per cent annually over the next ten years, according to the World Travel & Tourism Council. We believe that all players can benefit from that growth.
As the industry evolves, it’s a natural consequence that there are new requirements from airlines, travel agents and travellers. We aim to serve the best outcome for the traveller, the industry’s customer.
David Doctor is vice-president of provider offer management for Amadeus Travel Channels. Since joining Amadeus in 1999, Doctor has held roles including head of distribution marketing and director of airline marketing & sales. Prior to joining Amadeus, Doctor worked in sales consultancy in Spain and sports goods distribution in France.