A new study reveals that the majority of travel managers believe there could be both benefits and potential challenges for corporate programmes stemming from New Distribution Capability (NDC).

The study, The Evolution of Air Distribution, was conducted by the Association of Corporate Travel Executives (ACTE Global) and American Express Global Business Travel (GBT). It explores travel managers’ experiences and attitudes toward changes in air distribution, including NDC.

The research shows travel managers do expect to see some benefit from NDC, with 64 per cent saying it could improve the booking experience and 56 per cent believing it could help contract negotiations with airlines.

However, an astounding 89 per cent of travel managers fear that fragmentation created by NDC could threaten cost control, as well as policy compliance (87 per cent) and duty of care (77 per cent).

According to respondents, fragmentation is already occurring because of airline ancillary purchasing, with 49 per cent of travel managers saying their travellers by out-of-policy ancillaries from airline websites ‘some of the time’.

ACTE says this leakage from corporate online booking tools (OBTs) is a direct consequence of the trend of airlines unbundling fares into paid-for components such as baggage fees and seat selection. This in turn ‘hinders’ the traveller booking experience and prevents travel managers from gaining full visibility on air spend.

To add to the confusion surrounding the future of airline distribution, 23 per cent of respondents said they are ‘not at all’ confident in their understanding of NDC and what it means for their programmes. A further 58 per cent are only ‘somewhat’ confident in their comprehension.

As a result, 63 per cent of travel managers said they are not exploring any new platforms beyond their OBT at the moment.

This lack of understanding has led to the majority (90 per cent) of travel managers saying they think NDC will lead to reduced functionality of their OBT if NDC content was incorporated into existing policies. Eighty-nine per cent believe the unbundling would lead to higher costs, while some say it could cause a lack of available data and reduced fare transparency (88 per cent each).

Greeley Koch, executive director of ACTE Global, warns that travel managers can’t afford to wait to address new models.

Koch said: “When it comes to NDC, the biggest unknown is whether travel managers will be able to maintain visibility into costs and traveller behaviour. But they cannot afford to wait to address the issue. Travel managers must evaluate their policies and technology now so that they’re prepared for the potential disruption. If caught on the back foot, they will be left grappling with a more fragmented, less safe and, ultimately less effective programme.”

Mike Qualantone, executive vice president of global supplier relations at American Express GBT, added: “We continue to advocate the greatest consolidation of content, across all booking channels, to best meet customer and traveller expectations, while controlling both programme management cost and booking processing fees. NDC has tremendous potential, and GDSs are moving towards readiness and NDC compliance, so it will be key to ensure airlines then fully utilise these comprehensive, efficient and NDC-ready channels.

“Travel managers should educate themselves on NDC, evaluate options with their TMCs, and ensure suppliers do not use NDC to add booking processing costs or limit access to content. Meanwhile, they should look at fortifying travel policies to control cost and compliance while striving to keep travellers productive, safe and happy.”

Read the full study here

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