Steve Solomon, CCO & VP Global Customers and Data Products, ARC
NDC adoption is on the rise in 2023. More than one in 10
travel agent sales are coming from NDC interfaces. Many airlines have recently
implemented content through NDC, and a growing number of global suppliers are
offering direct connect options to agencies. American Airlines also recently
informed travel agencies that they will need to be connected to NDC by April to
receive full access to the airline’s third-party content. Providing the
enriched experience of NDC requires significant investment from airlines and
agencies, with numerous supporting technologies knitting a travel journey
together. As NDC continues to grow, corporate buyers deserve full visibility
into the economics and how money flows between their program partners to
measure the value their organization and travelers are deriving.
Many travel stakeholders have been reluctant to embrace NDC
because they have not seen the efficiencies and savings immediately. There
remains some confusion in pockets of the agency and travel manager communities about
what it is, and the benefits to both suppliers and buyers. But NDC investments
will pay off, and travel managers should expect lower costs over time as
solutions move from introductory stages to maturity.
Setting some cost questions aside—and I’ll get back to those
in a minute—NDC has more to deliver for travel programs. Travel managers should
realize more transparency and control as they harness NDC-derived data in 2023
to inform their travel policies and programs. They will need this as travel becomes
a more integrated piece of workforce engagement and management this year.
Connecting the Dots
Many organizations are working to define what the “next
normal” is—whether it’s mandating a certain number of days in the office or
determining the frequency of bringing together teams that are now more
physically distributed. It is clear, however, that business travel will be a
key component of organizations’ strategies in 2023.
Corporations should realize there’s an opportunity to
leverage business travel policies to significantly influence employee
recruitment and retention, and to shape a new employee experience, especially
for those who work remotely. And the travel experience itself matters.
According to a
study by GBTA and Sabre in 2022, 84 percent of North American workers said
the quality of their work-related travel influences their business results.
This is where NDC will begin to come into play, empowering
travel managers with better offerings, new pricing strategies and better data
and insights to design and manage programs as they gain more influence within
their organizations.
NDC will allow corporations and airlines to work together to
design customized solutions and content for employees, including bundled offers
tailored to a travel program or traveler, or options that make booking and
expensing travel easier. Employees who can tailor their travel comfort and
expense their travel easily will be more efficient, more loyal to their company
and less likely to burn out over the repetitive tasks of managing travel.
As suppliers introduce increasingly dynamic and continuous
pricing, which they have said will be powered by NDC, travel managers also have
an opportunity to ensure they are getting the best prices possible. United
Airlines has indicated
that they have lower price points they are willing to sell, but until recently,
their technology has limited the ability to offer those prices. With NDC
technology supporting new ways of doing business, travel managers should engage
their suppliers about their pricing and technology strategies and capabilities
to understand how they can take advantage of all available content and at what
price.
Additional transparency around pricing is needed so employees
and corporate leaders understand the true costs of their travel, giving them confidence
that their business travel decisions drive a significant return on investment. Suppliers
will need to create offers through NDC that benefit both their business and
their corporate travelers. To adapt an
example from Duffel: If a customer flies from Chicago to New York every
month and regularly pays for business class when the price difference from
economy is less than $200, the airline can consistently offer the traveler a
business class upgrade for under $200.
In all of this, the broader sharing of data—including
current and forward-looking data—is key. TMCs and technology partners will need
to help corporations manage employee travel duty of care, ensuring that travel
managers can locate their travelers at any moment, and have full visibility
into upcoming travel, regardless of the booking channel. Suppliers and travel
managers need the complete picture of their travel transactions to drive
decisions, and NDC helps provide the travel ecosystem with a less fragmented
view.
Travel managers have an opportunity to seize the
moment. Those who build programs on a principle of transparency and seek
trusted data to derive insights will be well-positioned to drive more value for
their organization and elevate the importance of their role. And traveler
managers’ increased influence has the potential to accelerate positive change
in the broader travel ecosystem, driving more collaboration across the industry.