Emirates recently announced that it is applying a fee of between $ 14 and $ 25 per ticket for bookings made through GDS by July 2021. Emirates’ announcement will be a further blow to travel agents who need to still adapt to New Distribution Capability (NDC) technology. . Most agencies still use the traditional Global Distribution System (GDS) platform – a central global reservation system that allows agents to search and book flights in one place. Emirates is one of several major carriers to impose GDS fees such as British Airways, Lufthansa and Air France-KLM.
NDC – A painful headache for travel agencies or an opportunity to become market leaders?
The concept behind NDC undoubtedly offers a myriad of benefits, but the processes and costs associated with its implementation have so far been a barrier to mass adoption. Airlines are open to working with agencies to use their platforms. Examples include Emirates Gateway, British Airways NDC, and the Lufthansa NDC Partner Program. Agencies can connect to these platforms and directly access tailored pricing, dynamic pricing, and rich complementary content. However, this is not an efficient way to book as the travel agency no longer uses a central reservation system. This results in an uneven and lengthy booking process as the agent has to use multiple booking tools to compare quotes, confirm flights, cancel and modify bookings. It doesn’t help the consumer – according to a 2019 GlobalData tourism consumer survey, 91% of respondents said they were interested in purchasing products that save them time and effort.
There is a workaround for this problem because NDC technology provides an API link. Agencies can then build online applications and reservation systems that extract the content, allowing customers to shop online with the same flexibility as the airline’s website. Unfortunately, the implementation costs are significant and require in-depth knowledge of XML on the part of IT development teams.
NDC is a material change management process. Adoption by travel agencies has been slow, given that NDC has been around for nine years. In many cases, the back office solutions of travel agencies and travel management companies are developed around GDS technology and processes. Thus, only 12 sellers have achieved level 4 certification (the highest a seller can achieve) according to IATA. Adapting to this change in the short term may be unfavorable, as switching to NDC is not cheap and agencies are cutting budgets due to the Covid-19 pandemic. With agencies unable to offer consumers the best price or ancillary options, customers will inevitably book directly through the airline’s website.
What is NDC?
NDC is an XML program supported by the travel industry and developed by IATA. It improves the communication capacity between airlines and other intermediaries. As a result, agencies and airlines can sell more diverse and richer products. NDC will give travel agencies better access to ancillary and personalized services for their clients, such as dynamic pricing and special offers based on research and past bookings. As many carriers (especially full-service carriers in recent years) have started unbundling fares, consumers will have more options to personalize their booking experience through a travel agent.
There is no doubt that the industry can benefit from NDC – it is a consumer-centric platform that enhances the retail experience. Agencies that can quickly adapt to NDC technology will provide improved service to their clients. The problem lies with the agencies that fall behind on this issue, particularly in these unstable times. Travel agencies that can’t keep up with the trend risk losing their customers because they can’t give them the same shopping experience directly with the airline or another competitor.
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