Travel agent consulting clients using travel agency software with digital maps and booking tools.

How travel agency software can transform your business in 2022?

by with No Comment Travel Tech

The travel industry was one of the worst-hit during the COVID-19 pandemic. However, with cases waning, the industry looks for a significant rebound this year. 

The World Travel & Tourism Council has revealed that the travel industry will grow to $8.6 trillion in 2022, just 6.4% lower than the pre-pandemic stage. However, business travel, a crucial revenue driver for travel companies, will likely recover much more slowly.

So, to survive the next few years, travel agencies and tour operators must adapt quickly, boosting customer confidence and profitability.

Embracing new-age travel agency software is one of the most effective ways travel companies can strengthen their position during these challenging years.

Here, we break down the importance of leveraging technology to automate your travel agency functions and offer personalized and swift service to your customers. 

How can automation help a Travel agency?

Booking the tickets, enforcing the travel policies, managing the invoices are essential tasks that can be handled effectively with the help of automation. As a result, the travel agencies can provide an enhanced customer experience at the end of the day. Whether an online travel agency, travel management company, or any business operating in the travel industry, automation saves time, cost, and human resources.

Benefits of Travel agency software

Travel agency software is equipped with an online booking engine that enables agents to make ticket booking easier. This specialized travel booking system can be connected with multiple GDSs or NDC APIs for fetching worldwide content. So, the agents can make airline and hotel reservations(real-time) for clients within minutes.

Notably, travel agency software connects with multiple vendors to book flights, hotels, holidays, insurances, car rentals, airport transfers, etc. The agents can integrate the booking engine with their website and sell tickets with their branding. The key feature of the travel software is that it allows the agents and customers to transact with a wide selection of payment options and currencies.

Revenue maximization

Travel agency software helps the agents to charge their customers with different transaction/markup fees to maximize their revenue. In addition, the agents can cross-sell ancillary services, which not only maximize travel agents’ revenue but also delight their customers.

The travel agents can handle price setting, invoice management, booking of travel products from third-party suppliers and global distribution systems, promo code management, and communication with sub-agents with the help of travel ERP software. As a result, the agents can provide a smooth and personalized booking experience for sub-agents and their customers, leading to higher revenue.

Optimizing workflows

Travel agency software reduces operating costs and improves efficiency with workflow optimization. It helps the agents streamline mid and back-office processes to provide the customers with efficiency. Travel agents can seamlessly organize invoices and keep track of payments for multiple clients simultaneously. Managing invoices, sales commissions, and enforcing policy while booking can be effortlessly handled with the travel agency software’s automated workflow.

Complete software integration

Multiple GDS systems, accounting, and HRMS can be integrated with Travel agency ERP systems. As a result, agents and sub-agents can access, share, and coordinate pricing, product availability, etc. It allows the agents to provide the right offer to the right customers for driving sales and promoting robust growth.

Advanced reporting

Travel agency software offers reliable reporting tools to generate sales, financial data, inventory, vendor management, etc. These reports help agents estimate, forecast, and make decisions to increase revenue and elevate growth.

Conclusion

Specialized travel agency software gives businesses a holistic view and greater control of their entire business.

The travel ERP can further automate document generation, invoicing, finances, reporting, etc. This automation reduces the time spent on day-to-day activities and expenses.

To stay competitive in today’s market, travel agencies must adopt a travel ERP system like AgencyAuto for their businesses to improve productivity and drive agencies in the right direction.

Then, what are you waiting for? Hurry up and try a Demo to access the leading travel agency software

Travel agents discussing new year strategies to improve client service and agency growth.

Top travel agent resolutions for the New Year (2022)

by with No Comment Travel Tech

As we approach the end of what has been a slow year for travel, it is fair to say that global travel agencies have a long way to go before returning to profitability. Before that can happen, travel needs to hit pre-pandemic highs and stay there for a significant time. However, with new covid variants emerging every few months, travel agencies have no say over when the world will fully reopen, and corporates and tourists will line up to buy travel products.

But this doesn’t mean travel agents are powerless in the situation. As you steer your travel agency into the unknown waiting for you in 2022, here are a few essentials to make the year into one that you’re proud of.

Automate, Automate, Automate

By investing in automation, you will be able to streamline processes, boost sales, bring down error and risk, and further make data-driven decisions throughout the year. It is also worth mentioning that you can save time with mass cancellations, changes, refunds, etc., which increases customer satisfaction drastically.

Travel agency software provides a major fillip to your back-end operations as well, as it helps manage business rules, revenue, accounting, and commissions, boosting efficiency greatly.

Apart from this, automation takes away the pain of preparing itineraries & quotes, looking up fares, setting up promotions & markups, tracking bookings, and configuring system-wide roles as well. 

Deliver immersive and pain-free travel experiences

In 2022, make it a point to deliver travel experiences that delight your customers. Make it your mission to know what the client needs at each point in their journey and ensure you are the one to provide it. This involves going above and beyond as Malaysian Airlines did with its Hajj passengers. The airline worked on every aspect of the journey to make sure the religious pilgrims got everything they needed, including the right food, greetings, prayer equipment, and vehicle rentals to the holy sites. 

As a travel agency, you can also delight customers with more offerings and add-ons, such as car rentals along with the standard flight and hotel bookings. Aside from this, you can offer travel insurance, which will build trust among travelers who are afraid of losing their luggage or getting sick.

Prioritize providing travelers a seamless booking experience, but don’t stop there. Give them a trip to remember by using AI-based recommendations based on their preferences. Also, invest in a platform that allows you to provide exceptional customer service through all possible channels. 

If you have corporate clients, remember that they value personalization and would enjoy your services infinitely more if you provided them customized packages as per their budgets, duration of travel, interests, holiday type, etc. 

Team up and scale your operations globally

2022 needs to be the year when you leave a mark on a global level. Team up with subagents by giving them a personalized user interface with private labeling or cobranding where they can sell to newer customers you weren’t able to reach. 

Managing such a vast network has also become quite simple, with the emergence of subagency management platforms that allow your travel company to closely track subagency performance.

Another way to leverage the power of partnerships is by teaming up with different travel product suppliers, such as car rentals, transfer companies, sightseeing providers, travel insurance companies, etc., and adding value to the customer while also making extra revenue. 

Partnering doesn’t have to be just with travel service providers. You can take full advantage of the resurgence of business travel and lock in corporate clients with personalized discounts.

Conclusion

The covid pandemic has reshaped travel, and as a result, travelers have come to expect hyper-personalization, a high degree of safety, and cost-effectiveness. You can ensure all of this and stand out from the competition by choosing the right travel agency solution.

The right solution will not just free you from manual, mindless tasks that don’t generate revenue, but it will also open new revenue streams and leave your customers wanting more. If you are interested in learning more, reach us at [email protected]. 

Business professional analyzing global ERP data on tablet with charts and market insights.

How a travel ERP can help you effectively manage subagents and expand globally

by with No Comment Travel Tech

Agencies, suppliers., and tour operators with ambitions to take their travel companies global all have one thing in common—an extensive network of resellers/ subagents who serve as B2B sales channels, bringing in business from diverse locations. In these cases, travel companies often must spend a lot of time and resources tracking subagency performance.

To mitigate this issue and maximize B2B revenue, travel companies need a powerful travel ERP solution with channel management capabilities.

Here, we look at the features that every good travel ERP has that allow you to easily manage your subagents and the respective sales channels in a hassle-free manner.

Comprehensive reporting and analytics capabilities

One of the biggest challenges of managing a subagent network is performance management. The subagents might be spread worldwide, leaving you with many sleepless nights figuring out how to objectively track their performance.

With the right travel ERP, report generation is automatic; track all the parameters you want and generate reports based on commissions, individual agents, branches, or suppliers.

Further, you can send the agents summaries of their sales for any period of choice, including day, week, month, financial quarter, and even year. It is worth mentioning that the transaction reports are pretty comprehensive and cover booking/ cancellation/ promotion details, failed transaction records, change requests, etc.

Easy management of pricing and revenue

  • If you are a large agency, you may find it tedious to set up markups, commissions, margins, exceptions in terms of percentages for each subagent. However, if you have a travel ERP, you can use it to set up exception criteria and business rules to govern each class of subagents to manage their revenue.

Related Article:

How Emulate Functionality Enhances Sub-Agent Assistance

High level of personalization

A travel ERP also comes in handy if you want your subagents to have their user interface with customized branding. As the master agency, you can allow your subagents to quickly set up a B2B login and a corresponding private label B2C portal. Using this browser & mobile-friendly portal, your subagents can have their end customers book directly from anywhere in the world at their convenience.

With this arrangement, your travel agency can tap into an additional distribution channel for enhanced revenue. The subagents can further set up their markups according to the customer and provide a secured payment gateway of their choice where customers can directly book their tickets.

The personalization doesn’t stop there; subagents can use travel ERP for sending branded emails, vouchers, and quotes to customers.

To fully optimize the revenue from one of your subagencies, you need to also ensure that the travel ERP automates their back and mid-office processes, including customer management, quality checks, vendor management, corporate policy enforcement, auto invoicing, and booking management.

Given the importance of data security, the master agency can also provide role-based access to sub-agents, corporates, branch operators, etc., with a private user interface.

Credit management

  • Since credit from master agencies is the lifeline of many subagencies that make bookings on their behalf, a good travel ERP needs to facilitate credit management. Notably, the master agency can set up reminders when the subagency’s credit dwindles beyond a preset point. Also, the travel ERP can be configured to allow the credit to be replenished by either the subagency or the master agency, based on the requirement.

Conclusion

If you have a network of subagents bringing in business, the need of the hour is a comprehensive online B2B agent management platform. Ensure that it allows you to track subagency performance closely, provide credit, offer private labeling or cobranding, set up commissions as needed, and handle payment reconciliation as well. With such a travel ERP system, you will find that maintaining subagents all over the world is a rewarding process. If you want to learn more, reach us at [email protected] for a consultation.

Business traveler using digital booking platform with virtual flights and destinations for corporate travel procurement.

Future role of Travel Management Company (TMC) – digitize travel procurement and travel consultancy to corporates

by with No Comment Travel Tech

The pandemic has wiped out most business travel and brought about profound changes to customer behavior, making it necessary for travel management companies to reinvent themselves going forward.

Most importantly, they need to digitize the process of travel procurement and focus exclusively on providing travel consultancy to corporates. This is because 52% of business travelers have already taken a trip in the new normal, according to a poll we conducted. 

Also, corporations happen to be high yield customers with frequent travel requirements and the willingness to pay extra for last-minute bookings. 

Here is how TMCs can go about digitizing travel procurement and catering to corporate travelers in a way that maximizes their revenue. 

Embracing technology for travel procurement 

One of the first things that corporate travel managers need to do is use a corporate booking platform that allows travelers to book tickets for themselves. In this way, you can avoid the countless emails from unsatisfied customers filled with travel requests, queries about itineraries, issues with flight bookings, cancellations, last-minute changes, etc. 

Digitizing the process is especially prudent if a group booking is involved, where a new variety of scheduling complications arise. 

Moreover, corporate travelers will appreciate it a lot if there is an automated system to check if the bookings align with company policy. Also, while catering to corporates, you can provide them with the flexibility to instantly access frequent flyer rewards and pick service providers of their choice, which would be challenging without a digital solution. 

Pain-free travel consultancy 

Companies, which are confused about whether or not to return to business travel will benefit from expert guidance. This makes travel consultancy an excellent way for TMCs to generate optimal amounts of revenue. Notably, travel management companies can help corporates optimize their travel expenditure with a variety of insightful reports.

Besides, TMCs can provide integrated expense management services that both corporates and travel agents benefit from. When there is an integrated solution in place, corporates and travel agents can have complete control and visibility over their expenses without spending too much of their time tracking paper receipts or updating excel sheets. 

Ensuring policy compliance is another excellent way to help corporates as they return to business travel. Depending on the employee level, various controls can be applied, such as pre-approvals for all trips, limitations on budget, etc.

TMCs are also responsible for ensuring that all the company’s needs are taken care of during the trip, meaning they need to provide corporates with hotel bookings, car rentals, etc. These services go a long way in boosting the revenue of a TMC. 

Other than this, the TMC of the future can play a remarkable role in providing CFOs and the management of the company with real-time data on their employee/ department-wise spending habits that will let them make substantial changes. It is worth mentioning that corporates can make use of information from TMCs to become aware of any KPI that is important to them.

As travel consultants to corporates, TMCs can also eliminate other repetitive tasks that are time-consuming for the companies. For instance, the travel management company can enforce travel insurance requirements, provide guidance based on the destination, and even handle customer support requests. 

Related Article:

Top 5 challenges that barricades a corporate travel agency’s progress

Conclusion

Business travel has undoubtedly taken a massive hit in recent years, pushing many TMCs to the brink of closure. However, travel management companies can bounce back relatively soon if they can digitize travel procurement and make corporate travelers happy with cost-effective packages and excellent service. 

Travel agency team adopting digital tools to reinvent business model after the pandemic.

Pandemic – an opportunity for the travel agency to reinvent their business model through digitization.

by with No Comment Travel Tech

The covid pandemic forced the closure of countless travel agencies, tour operators, and travel management companies, as its effect echoed across the entire travel sector. The surviving travel companies are staring at huge losses and uncertainty over future revenue, thanks to the pandemic-induced paradigm shift in customer priorities and travel policies.

But all hope isn’t lost.

Even as the travel restrictions started kicking in around two years ago, many travel agents began experimenting with varying degrees of digitization and met with great success.

From the success of those agencies and our expertise on the matter, we have compiled a list of reasons why you should also consider embracing digitization and completely reinvent your business model.

Harness the power of NDC

By leveraging the New Distribution Capability from the IATA, travel agents can access new, rich, and creative content to provide travelers with tailor-made offers on their preferred channel.

Notably, it also presents travel agents with the ability to put forward detailed information to passengers in the form of images & videos alongside dynamic pricing and specially negotiated/ bundled offers.

Consequently, travel agents can sell more, bringing in optimal revenue from ancillaries as well

Eliminate unproductive tasks

With the power of digitization, your agency can get by even in the wake of the pandemic when you are short-staffed and low on funds. Robust technology, such as AI, can go a long way in eliminating tedious manual work, including creating offers, sending follow-up emails, providing customer support, etc.

Using a machine learning-based CRM, you also have the option of handling all your inquiries from a single platform. In this way, customers can reach you from the channel of choice, and you can still respond effortlessly with little response time.

Additionally, there are tools that will automatically notify your passengers about disrupted flights and keep you posted on which of them are yet to cancel/ rebook. With this information, you can reach them with a human agent and get them to cancel/ rebook, so they don’t lose their money due to the travel disruption and end up blaming you for their poor experience.

Enhanced customer experience

Nowadays, people no longer reach for a telephone directory to find a good travel agent or even search online. They may just be lounging on their couch and dreaming of a vacation when they command their virtual assistant (Alexa, Siri, etc.) to find them the cheapest possible flight to some place.

If you digitize your travel agency’s operations and ensure that you are reachable across all channels, you stand to gain thousands of potential customers.

Self-service portals for your customers are another great way to boost customer experience during the pandemic. If you take the initiative to provide customers with a hassle-free portal/ site/ support line for self-service, you will end up with delighted customers.

Through implementing digitization, you can even gather actionable insights on your customer interactions for making strategic business decisions or improving customer experience.

Cater to high yield corporates

Using digital solutions for your travel agency, you have the option of offering corporates the ability to book business trips conveniently and cost-effectively. You can provide easy bookings via apps or an online site along with a great source of information to compare and get the best prices on flights, hotels, car rentals, etc.

Another great benefit of implementing digitization is that you no longer have to deal manually with piles of invoices or expense reports. Customers, especially the corporate ones, will appreciate the quickness with which you can process payments, provide discounts, and ensure policy compliance and visibility with an automated expense management solution.

Cater to high yield corporates

Imagine that your travel agency’s operations are automated as much as possible. In that case, you can ensure that your employees are engaged only in productive, high-yielding tasks, such as closing huge deals, dealing with demanding customers on the phone, negotiating with vendors for lower prices, etc.

For simple requests/ inquiries, you now have the option of quickly and cost-effectively handling the customer with an AI-powered chatbot or an updated knowledge base for their reference.

Conclusion

Innovation is critical in times of crisis, especially when it is as devastating as the current one; travel sellers need to adapt to the new situation and rethink their strategy for addressing customer’s shifting concerns if they intend to emerge unscathed from the pandemic. By harnessing the power of digitization, travel agents can boost customer experience and consequently thrive in the coming years.  

Business professional analyzing global travel data and charts highlighting benefits of early NDC adoption.

The benefit of being an early adopter of the NDC platform

by with No Comment Travel Tech

As the travel industry limps back to normal after what has been its most significant setback since 9/11, several airlines have seemingly found the cure to their financial distress—deploying IATA’s XML-based distribution standard, the New Distribution Capability (NDC).  

Airlines and travel agents have primarily driven NDC adoption to optimize their revenue by providing personalized offers and packages to travelers. 

However, many players in the industry are yet to jump on the bandwagon and adopt NDC, meaning they are losing out on substantial revenue gains. 

As you read on, we make a case for why adopting NDC early on is an excellent idea for the entirety of the travel industry, including airlines and travel agents. 

Why reinventing distribution is the need of the hour.

For airlines across the world, cost reduction and profit enhancement are crucial for sustained operations. According to the International Air Transport Association (IATA) reports, airlines will end up with highly unhealthy returns on investment once they’ve paid off their debts. 

The critical factor that makes NDC adoption a necessity is that distribution is among the costliest expenses an airline takes on. The industry seeks to bring down distribution costs by paying roughly USD 4 in booking fees per flight to Global Distribution Systems (GDS) operators.

However, this has done little to alleviate airlines’ woes when it comes to their bottom line. 

Moreover, add-ons, such as in-flight Wi-Fi & meals, and premium seats that airlines depend on for enhanced revenue, are tough to sell through an indirect channel. 

How NDC will be a game-changer

By implementing the NDC standard early on, airlines will be equipped to capture a large percent of the market because they can serve customers better and operate effectively in the following ways:

  • Pricing and content autonomy Using the new XML standard, airlines can develop their own APIs to provide customers with dynamic pricing and customized travel packages based on individual preferences. Doing so is impossible when airlines depend on a third party to publish their pricing. Another aspect of NDC that allows airlines to personalize the shopping experience is the availability of comprehensive customer data, which was previously in the hands of OTAs and GDSs
  • Differentiation capabilities With the GDS, airlines can’t offer ancillaries, a key driver of their revenue. However, the NDC allows for rich content offers, discounts, and ancillaries that enhance the customer experience. 
  • Reduced dependence on outdated passenger service systems (PSS)By switching over to the NDC, airlines can cut down distribution costs substantially because they are no longer reliant on one of the legacy passenger service system monopolies that charge exorbitant rates. NDC further provides excellent value for money. It can allow airlines to bypass the GDSs and distribute directly via travel management companies, metasearch engines, and online travel agencies, all while delivering rich content.

What NDC adoption means for travel agencies

Without a doubt, adopting NDC will give travel agencies an edge over their competition because it provides them with rich content, including images and videos that allow for greater personalization and simplicity for travelers. Also, travel agents can benefit by offering dynamic pricing, ancillaries, bundled offers, and specially negotiated offers.

Besides, travel agents have the benefit of providing customers with an integrated platform for them to search, compare, and book their preferred travel services no matter how individual airlines implement NDC.

 Aside from this, travel sellers can provide exceptional customer support to travelers around the clock. A few of the notable services are notification for flight schedule changes, ancillary selection, etc.

Conclusion

NDC adoption will be the way forward for airlines that want to boost customer loyalty and distribute their offerings better. The enhanced retailing ability it provides will go a long way in helping airline companies and travel agencies end their streak of low profitability and emerge victoriously from the pandemic. 

To gain the full benefit of NDC adoption and outperform your competition, reach us at [email protected]

Stacked coins with financial charts showing revenue growth and shopping’s impact on airline revenue management.

The role of shopping in revenue management

by with No Comment Travel Tech

As airlines emerge from the pandemic, they are in a great state of turmoil. Given this scenario, there is a massive push from airlines to shift away from competing on the lowest prices and start competing on the best value they can provide for passengers by leveraging offer management and dynamic pricing.  

But how is this to be done?

This is where the analysis of customer behavior comes in. Airlines can benefit immensely by learning from past customer behavior; they can understand their passengers’ propensity to buy various ancillaries, their most-profitable segment, periods with the highest demand, etc.

Making use of this data to meet the needs of customers while deriving optimal profits, or presenting the right offer, to the right person, at the right time is the vision of NDC offer management.

How NDC offer management is making airline offers smarter and more personalized

The customers of today look for more than the ticket’s price, as their needs are evolving.

According to a statement from Elliott Advocacy, a nonprofit customer advocacy group, 77% of passengers view ticket fare as the most important factor. However, 48% take into account flight schedules, and 47% consider the availability of direct flights. Also, 36% of air travelers take into account whether they have to pay extra for their luggage and other ancillaries 

Taking all this into consideration, both airlines and travel agencies are in a scramble to personalize their offers and stand out from the competition, all while maximizing their returns.

Just like Spotify and Netflix, which leverage powerful machine learning algorithms to suggest personalized content for their users that they couldn’t have found on their own, airlines are attempting to learn from their customer’s behavior to tailor offers to their satisfaction.

This is mainly done through an NDC-certified offer management platform.

The offers that are delivered are dynamically priced, meaning they are priced based on the customer segment and the prevalent market realities. For instance, a passenger may be willing to take an indirect flight while on a vacation to save money but may be unwilling to do the same while on a business trip.

Across the world, NDC-certified offer management platforms are helping airlines to make use of real-time market information to optimize seat prices and provide personalized bundles for passengers that include trip insurance, extra baggage allowance, extra legroom across all channels.

 It is worth noting that even something as simple as identifying when your passengers travel for business and offering them Wi-Fi on that flight will go a long way in optimizing revenue.

 However, finding the sweet spot between what customers want, when they want it, and what they are willing to pay for it, is the name of the game when it comes to effective offer management.

Conclusion

By pushing dynamic offers including flights, air ancillaries, and non-air ancillaries, such as cars, hotels, etc., airlines can see up to a 2.7% increase in revenue, as per the findings of the Massachusetts Institute of Technology’s Passenger Origin-Destination Simulator.

With Infiniti’s full offer and order management capabilities, your airline can achieve the NDC vision of personalizing offers based on customer type and value irrespective of the chancel and emerge out of the pandemic-induced dip in revenue in no time.

Airline executives in boardroom discussing NDC aggregator partnerships and distribution strategy.

How many NDC aggregators should an airline sign-up with?

by with No Comment Travel Tech

When Oliver Wyman, a management consulting company, began their Airline Economic Analysis, they saw it as a way to investigate what was driving airline profits. 

In 2020, however, everything changed, and their efforts turned into an investigation of what factors were causing airline industry profits to nosedive. A huge problem was the suspension of domestic and international travel by most companies when the covid-19 pandemic hit.

Even a spike in leisure travel towards the end of 2020 didn’t give the airlines any respite because of the low-yield nature of the segment.

Things have gotten so bad that the International Air Transport Association (IATA) has predicted that the global aviation industry will lose up to 38.7 billion USD in 2021 and become cash positive only by 2022. 

Has the New Distribution Capability (NDC) failed?

Given the present scenario, airlines are desperately trying to fill their flights but to no avail. Even though vaccines have rolled out successfully in most major travel destinations and cases are dropping, large sections of business travelers have expressed a lack of interest in traveling for the next few months.

As a result, airlines have seen a major uptrend in their distribution costs, which is something the NDC was brought in to reduce.

Considering that distribution costs are among the biggest expenses of an airline, an important question emerges—Has the NDC initiative of the IATA failed?

To answer this, we need to look at what the NDC is and where it has fallen short.

Reimagining airline merchandizing with NDC

When the NDC was introduced, it was touted as an XML-based data transmission standard that could redefine the way airlines sold tickets. 

Further, it was supposed to be a replacement for the GDS, which was the sole gateway for travel agents & their clients to make bookings after comparing their options.

 This was especially significant given that the three main companies offering GDS services could charge exorbitant fees to the airlines/ other listed vendors. 

 With the introduction of the NDC, airlines and other service providers, such as hotels could now directly or indirectly (through an IT partner) get around the GDS costs and even deliver rich content in the form of baggage allowances, seat/room upgrades, food & drinks, etc.—all at a substantially lesser cost.

Where airlines are going wrong with NDC

Even though NDC is a more streamlined way for airlines to distribute tickets and ancillaries, the key promise of NDC—bringing down distribution costs—hasn’t been fulfilled entirely. Still, airlines end up paying $14 – $25 per ticket as distribution fees. 

This is largely because an issue that plagued the GDS—the dominance of three main GDS companies—had come to haunt the NDC as well.

Airlines that had eagerly adopted the NDC are now staring at the same problem that had gotten them off the GDS; a monopoly is making distribution costs skyrocket, and they are left with no choice but compliance.

The miracle fix

Airlines have a real opportunity here, to democratize the process and bring down the cost of distribution substantially. Rather than partnering with 1-2 aggregators, they have the option of partnering with around 40-50 aggregators globally, which is the surefire way to get the most out of NDC.

When this is done, the competition among the aggregators will benefit the airline in two ways; the price of distribution will go down to 2 to 4 USD, and the customer experience will be made better. 

If you are interested in partnering with Infiniti to make your distribution cost-effective, reach us at [email protected]. 

Team discussing NDC use cases in travel distribution during a business meeting with planning charts.

How can airlines make better use of NDC to reduce distribution costs

by with No Comment Travel Tech

Airlines across the world are going through the biggest crisis they have ever had. Survey after survey finds that only about half the potential passengers are comfortable with the prospect of flying even 60 days after worldwide travel has resumed.

Given this scenario, airlines are in a rush to find any means to stop the massive bleeding of resources they are facing. Consequently, many of them have come to realize they need to cut back on their largest expense—distribution costs.

But didn’t the International Air Transport Association (IATA) bring out the New Distribution Capability (NDC) for the express purpose of cutting distribution costs?

Why hasn’t that had an impact and shielded the airline sector from the ravages of the coronavirus pandemic?

Notably, the airlines could get around the costly GDS platforms by taking control of their content distribution; either directly or through an intermediary IT provider, airlines could deliver rich content and ancillaries (lounge access, pre-check bags, seat upgrades, on-board drinks &  food, and baggage allowances, etc.) to their passengers at a minimal cost.

The major NDC limitation

NDC is promising in a multitude of ways, but there is a glaring issue that has been a pain point for airlines for many decades now—the cost of distribution has not changed by much. Why?

Even though NDC was brought in to replace the monopoly of the GDS, it has not succeeded in doing that because GDS has come to dominate most of the distribution through NDC.

That is, the same three large GDS players have gained a near-monopoly in the NDC platform, leaving airlines with distribution costs as high as $14 – $25 per ticket.

All is not lost with NDC

Despite all of this, NDC provides a better way for airlines, GDS, and online travel agencies to connect, paving the way for streamlined distribution of tickets and ancillaries.

However, with the current way that NDC is implemented, airlines can’t keep improving their customer experience and get around the monopoly of the three big players in the NDC space. This is where an IT partner comes in.

Across the world, airlines have been launching multiple distribution channels, each in collaboration with an IT partner who helps the airline provide travel agents in their region with rich content.

Because of having hundreds of medium-sized players that airlines can work with in a region-specific manner, ticket distribution costs per unit can go down to as low as 2 to 4 USD. Competition among the various IT partners of the airline will further go a long way in bolstering customer experience.

Conclusion

Airlines are already beginning to implement this strategy to massively cut down on distribution costs. Already, Infiniti’s NDC level 4 capabilities have helped Emirates achieve the benefits of direct distribution at minimal cost. Given our full offer and order management capabilities, Infiniti can be a valuable partner for your airline as well. If you are interested in knowing more about how we can help you, don’t hesitate to reach us at  [email protected].

Airline executives reviewing NDC dashboards with booking data, distribution analytics, and sales performance reports.

How can airlines reduce their distribution cost through NDC?

by with One Comment Travel Tech

“I have been banging the drum about the way we are – an industry constrained by the legacy distribution systems. I am not satisfied that the GDS systems of distribution on offer are fit for purpose in the next five or ten years, particularly in light of what has been going on in the digital world.” — Tim Clark, President of Emirates.

This quote is emblematic of the problem that the airline industry faces when it comes to ticket distribution. Airlines sell most of their tickets through indirect channels, which costs the airline 20-times more than the money required to sell tickets through direct channels. A large part of this cost comes from the exorbitant rates charged by GDS companies that are near monopolies on the market.

Given this grim reality, airlines are constantly seeking ways to optimize their revenue. Enter the International Air Transport Association or IATA, the trade association for the airlines of the world, with the New Distribution Capability (NDC) that sought to revolutionize the industry.

Why NDC for travel agencies?

  • What is the NDC? 
  • Why was NDC needed in the first place?  
  • How have airlines implemented it and with what level of success? 
  • Has it been successful in achieving its objective of making more money for airlines? 
  • Can airlines leverage NDC in a way that is more advantageous to them?  

Why was the NDC needed?

Before the NDC, there was the Global Distribution System (GDS) that served as an intermediary platform between travel agents and various travel service providers, such as airlines, hotels, cruise ships, etc.

Agents and OTAs could select and book these services based on the inventory, fares, and schedules provided by the GDS.

However, this convenience came at a huge price. Airlines have been complaining since the inception of GDS that the fees were unreasonable. In 2011, American Airlines sued Travelport, and US Airways took Sabre to court, claiming that the GDSs were acting as a monopoly on the business travel sector.

This was not the least of the airlines’ concerns; they were actively looking for ways to differentiate their products, which was impossible on the GDS that allowed only for the sharing of prices and schedules.

The dawn of the NDC

Eventually, the IATA came up with a solution to the problems airlines were facing with legacy distribution systems.

They launched the NDC, an XML-based data transmission standard that sought to disrupt how the travel industry was selling its products.

A customer-focused platform, NDC could be counted on to enhance the retail booking experience and let airlines bundle ancillary services, stand out from their competition with personalized offers, and consequently boost their revenue with dynamic pricing.

What is more, the airlines could bypass the unreasonably priced GDSs and make their content available directly to travel management companies and agents. Given how much reach NDC is starting to have, GDS companies have also begun adapting and offering NDC content on their platforms.

Challenges with implementing NDC

While all its features sound delightful, the airlines have not been benefitting much from it, thanks largely to the way NDC is implemented. Generally, the airlines pick an IT partner, implement NDC, and distribute their services only through their NDC portal, leading to several challenges.

For instance, airlines fled GDSs because a handful of companies were monopolizing the market and charging unreasonable prices. The NDC scenario has turned out to be no different; the few companies offering the service have ensured that airlines still have sky-high distribution costs.

This dependency on a single storefront has further led airlines to lose out on potential customers in areas where their brand is not recognized. The use of a single portal for travel agents around the world to book tickets has also put immense pressure on the IT teams of airlines.

This is not a positive development given that airlines are already short-staffed due to the pandemic. Even without the pandemic, airlines would be reluctant to bring on a whole army of IT professionals for something that can be dealt with more cost-effectively, as we shall soon see.

Making NDC work for you, the Emirates way

Emirates, one of the biggest airline companies in the world has come up with a fascinating way to cut down on distribution costs and increase demand for its tickets. As a step in that direction, they have partnered with multiple NDC companies, including Infiniti Software Solutions, to offer bespoke services, unbundle their offerings, and have dynamic pricing as well.

So, it turns out there is a better way to offer bespoke services to customers without paying high prices.

In essence, Emirates through its collaboration with IT partners that offer NDC content around the globe has found a way to promote their NDC content to travel agents and travel management companies with rich content and differentiated pricing.

In India, Emirates has partnered with Infiniti to create a unique storefront through which travel agents can access NDC connectivity to shop, order, pay and service airline travel offers.

Through these partnerships, Emirates has seen massive drops in distribution costs. Besides, the fact that IT companies are competing to provide the best customer experience possible is another win for the airlines. 

Conclusion

As the first travel technology company to have acquired NDC Level 4 certification with extensive order and offer management capabilities, Infiniti has an edge when it comes to enabling your airline to create a unique storefront that provides differentiated offers and rich NDC content that is easy to adopt. 

If you want your airline to have access to our NDC-enabled retailing and distribution technology that will elevate your customer experience in an everchanging environment, reach us at  [email protected].