Corporate travel industry faces upheaval as airline retailing advances - Timmo Rol

Key Ideas from Timmo Rol's presentation at the Australia Corporate Travel Summit (ACTS) in Sydney on 13 November 2024:

1. Why Airline Retailing? Airlines are driven by two main factors:

   • Control: Over offer presentation, distribution partners, demand data, and personalisation.

   • Commercial: Potential for cost reduction, increased revenue through ancillary sales, and new capabilities like continuous pricing.

2. Corporate Travel Challenges:

   • Fragmented content across different channels

   • Technical differences in NDC implementation

   • Operational inefficiencies in managing multiple tools

   • Changing commercial models, including new surcharges and fee structures

3. Vision for Airline Retailing: Aspiring to provide:

   • Rich, branded interfaces with clear options

   • Personalised recommendations and tailored offers

   • Flexibility for customisation

4. Corporate Travel Opportunities:

   This is what Corporates are increasingly seeking from their Travel program.

   • Modern technology experience

   • Access to best content

   • Tailored offers

   • Seamless servicing

5. Industry Trends:

   • Corporates accelerating adoption by piloting NDC outside of TMCs

   • Online Travel Agencies (OTAs) have higher adoption due to fewer complexities

   • TMCs owning their technology have higher adoption and benefits from NDC

6. Call to Action for Key Stakeholders:

   • Corporates: Seek clarity on your strategy and find partners that deliver. Travel distribution is becoming more complex.

   • TMCs: Be open-minded to commercial changes (e.g., ancillary commission over GDS segment rebates). Take control by defining a long-term view on content access and controlling your booking data. Do the numbers, including forecasting the cost of inaction. Define and own your story.

   • Airlines: Develop strong partnerships to create "perfect" use cases for NDC implementation.

Overview

The presentation dives into how airline retailing is changing the game for Corporate Travel Management Companies (TMCs) and Corporate Buyers. It looks at the challenges and opportunities that come with New Distribution Capability (NDC) and modern airline selling strategies.

For TMCs and Corporate Buyers, this shift is a mixed bag. On one hand, they're dealing with scattered content, tech differences in NDC, and new pricing models. TMCs are juggling multiple tools and new fees, while Corporate Buyers are trying to keep a handle on their travel spending.

But it's not all doom and gloom. Corporate travellers want cool tech, the best deals, personalised offers, and smooth service. Some big companies like Walmart and Meta are jumping on the NDC bandwagon, bypassing traditional TMC setups. For TMCs, it's a chance to shake things up by tweaking their business models, taking charge of content access, and owning their data strategy.

The key takeaway? Everyone needs to work together. Corporates should have a clear game plan, TMCs need to adapt, and airlines should team up to make NDC work smoothly. The end goal? To make corporate air travel feel as slick and personalised as other industries, while still meeting the unique needs of business travellers.

Challenges in Corporate Travel: The NDC Revolution

As the airline industry embraces New Distribution Capability (NDC), corporate travel faces four unique yet complex challenges:

1. Fragmented Content: A double-edged sword offering tailored deals but requiring strategic navigation through scattered information across multiple channels.

2. Technical Differences: The promise of enhanced capabilities comes with the exciting challenge of mastering varied NDC implementations, pushing the boundaries of travel program control.

3. Operational Efficiencies: While juggling multiple tools may seem daunting, it opens doors to unprecedented optimization in managing corporate travel workflows.

4. Changing Commercials: New surcharges and fee structures shake up the status quo, presenting both risks and opportunities for savvy travel managers to redefine value.

These challenges are not just hurdles but gateways to a more dynamic, personalised, and efficient corporate travel ecosystem. Embracing them could lead to significant competitive advantages in the evolving landscape of business travel.

Key Takeaways from Airline Retailing and NDC session

• NDC Momentum and Market Shifts

  • NDC enables personalised pricing and improved customer engagement for airlines.

  • Rapid adoption by technology first players: Navan achieved 51% NDC content with Iberia upon go-live; AMTRAV grew 70% in revenue in 2023.

  • Corporates accelerating NDC adoption; multiple large Corporates with a combined annual Air travel spend of over 500 million USD in annual travel spent is piloting NDC content outside of the incumbent TMC.

• Corporate Travel Landscape

  • Challenges: Fragmented content, technical differences, operational inefficiencies, and changing commercial models.

  • Opportunities: Modern tech experience, access to best content, tailored offers, and seamless servicing.

• Call to Action:

  • Corporates: Develop clear strategies and partner with innovative providers.

  • TMCs: Build compelling business cases, focus on content control and data ownership.

  • Airlines: Create strong partnerships to demonstrate NDC capabilities through use cases.