This year,
we’ll see incentives for all! Ok, let’s be honest, I used that to grab your
attention, as that’s absolutely not a phrase you are going to hear much in
2018. In fact, the direct opposite will start to happen as suppliers will
become much more discerning.
In the past,
just having a business relationship with a supplier was likely to result in
incentives between agents, content aggregators and suppliers. But, as anyone
who has worked on agency incentives will attest, the grumblings about what they
got in return has always been there. More recently, suppliers have become more
discriminating in their financial relationships with the agency community, and
the trend is not limited to the airline sector.
The changing
perspectives on incentives are a bellwether for greater, underlying business
model changes that will evolve this year. We’ve already seen the introduction
of distribution fees, the waiving of these fees for some preferred agencies and
the introduction of special fares through a “private” channel. These largely
have been linked to the rollout of the New Distribution Capability standards by
most of the larger carriers, but let’s be clear: While they are connected to
NDC, it is only in as much as they are all part of a broader airline strategy
to develop a more efficient distribution chain for the future.
Changes to
distribution strategy will accompany greater differentiation in both the
products and services of the suppliers and across those delivering the
services—for simplicity, let’s call them the “resellers”. Suppliers are
building incentive programs based on demonstrable value and return relative to
the ability to sell these new products and services. As a supplier, why
wouldn’t you focus on rewarding those resellers who can help you achieve your
objectives. That’s just business.
We are likely
to see a variety of delivery models established during 2018 as the suppliers,
resellers and buyers weigh the new options available to them to distribute and
consume these differentiated products. Here lies the opportunity: As a
reseller, you get to sell why you’re different and how you’ll meet the
supplier’s business objectives—maybe even co-create new ways together,
ultimately becoming the “reinvented reseller.”
What this
means for the buyer this year is either a whole lot more pain or a glorious
future of exciting work to be done. The changes in distribution and business
models can’t be ignored. True understanding of the value chain, money flow and
impact on both the business traveler and company needs creates opportunity.
It’s all for the taking.
Disruption at
the most fundamental financial level to an industry provides the opportunity to
shape a new future. Now there’s an incentive for all.