Over the past 12 months, we have had time to reflect and think about inefficiency within current travel platforms and consider how we might do things differently to deliver solutions for the betterment of consumers of travel products and services.
This includes more emphasis for suppliers to deploy new technologies such as the New Distribution Capability (NDC). The NDC, launched in 2012, is an XML data transmission standard that allows airlines to distribute and sell a wider variety of products and services more efficiently using APIs.
The NDC has been first and foremost designed to reduce the costs (for the airlines). This often drives new ideas and the NDC is no exception. The NDC also gives airlines the option to allow third parties, including traditional and online travel agents, access to a lot more saleable content such as preferred seating, additional luggage allowances, upgrades, lounge access, carbon offsets and insurance etc. If done properly, the NDC has the potential to dramatically increase revenues for the airlines through the sale of these additional services.
Airlines want to deal directly with their customers and the NDC gives them the opportunity to do this, therefore gaining a deeper understanding of their customers’ appetite for the services they provide. This will enable airlines to create targeted marketing campaigns offering personalised services which will be designed to increase their customer loyalty and add to their bottom line.
With these changes already upon us, what should we be thinking?
Suppliers — Consumers
With the direct to customer model through the NDC and similar technologies, travel suppliers have the opportunity to cut costs and increase their revenues and customer loyalty. To guarantee this outcome, suppliers need to ensure they are providing great products and memorable experiences for their target customers.
What does this mean? Speaking as a 21st-century consumer, all suppliers should have great websites and processes that make it easy for customers to book directly with them through their websites. Additionally, they should endeavour to have great after-sales service in case the customer needs to make a change or they want to upgrade their product by adding additional services. That could mean having an online option for self-service and a person-to-person support system to provide additional customer support as required.
With these new systems, travel suppliers have the unique opportunity to develop a relationship with the traveller for a prolonged time leading up to, and during their travels. This means that the travel experience, whether it’s flying, cruising or staying at a hotel, should emulate the core values and unique selling points of the suppliers brand. They can enhance their luxury, their liveliness or their cosiness to ensure the customers are having a unique experience and coming back for more.
Travel agents — Consumers (individuals)
So where does that leave the travel agents if travel suppliers pull out all stops to get their customers to book directly with them?
Travel agents traditionally have been the go-between the consumer and travel suppliers. There is a lot of specific knowledge and expertise required to book travel using the GDS. But with the rise of the internet, metasearch engines, online travel agents (OTA’s) and direct booking services, travel agents are struggling to remain relevant.
So where do travel agents fit in?
There will always be people that want to use a travel agent to book their travel. Either because they don’t have a computer, don’t know how to use the internet or simply just prefer to deal with a person. But my prediction is that there will be less and less of these people as younger and more tech-enabled generations enter the market. That said, I believe the number of travel agents will drop but those that remain will be an integral part of the travel industry.
Hear me out. A good travel agent doesn’t just book your travel, they do far more than that. They can advise you on the best deals, help you change or cancel your plans easily and in unpredictable and uncertain situations, they can help take the pain out of dealing with the growing number of regulations, restrictions and procedures concerning travel.
Good travel agents add tremendous value in the sales and after-sale process, and that’s never going to change. So travel agents need to diversify their offerings and charge for the services and information they provide. Or in other words, charge where they add the most value. For example booking complex multi-stop itineraries, group movements, travel to destinations where specialist information is required and helping travellers out in unique and uncertain circumstances.
With this model, they will continue to excel in the areas where there is a demand for their services or where suppliers are willing to pay them a commission to get their products in front of potential customers. I predict consumers will appreciate and be ready to pay for that extra service if they need it, rather than expecting it for free because it’s hidden in the price of a ticket.
The other option is travel suppliers employ travel agents to service their customers. As I mentioned, it’s the consumers who value great customer service and the suppliers who care about making their customer happy. So instead of hiring overseas call centres, travel suppliers can employ travel agents to support their customers throughout the sales and after-sale process. As a consumer myself, I always prefer when I can ring up, have someone answer the phone and help me out instantly and effectively. It’s definitely a selling point for the brand. It was Steve Job’s strategy for achieving world domination with Apple products — to control every part of the customer journey to ensure excellence throughout and unrivalled customer loyalty.
Leisure travellers have already shown an affinity for booking online and it’s the suppliers and travel agents that need to adapt to ensure they are meeting the demands of the customer.
But what of business travel?
Previously, the default for businesses was to appoint a travel management company to manage their business travel. In a nutshell, travel management companies are employed to ensure business trips are booked according to policy and booking data is relayed back to the organisation to assist with governance, compliance and tracking purposes. They also act as a conduit between suppliers and organisations so corporates can access their negotiated discounts which save them money on their preferred suppliers. However, the status quo is under threat as business travellers seeking greater flexibility and more personalised experiences are starting to drift online just as leisure travellers have been doing for years.
In my experience consulting for universities, governments and large organisations, a growing number of flights are being booked outside preferred corporate travel arrangements and this is even more pronounced with accommodation. The issue with this is that travel management companies are unable to manage or report on travel that is booked outside their systems. This leaves a big gap in an organisation’s ability to govern compliance and track its people.
So how can businesses ensure that all travel bookings are made according to policy? How can they access the best deals for cost savings on every trip? How can large organisations track all the travel data for expense management, governance and compliance if the travel management company isn’t doing it?
The industry has changed
The industry has changed and it’s time for new solutions. It all started from the internet, then leisure travellers began a trend and now business travellers are jumping on board. As an industry, we need to adapt our methods to ensure we continue to provide travellers and organisations innovation that allows them to travel better and more efficiently than before. We have done this through the development of our new product TripApprove.
How will you adapt?