Cornerstone Information Systems was proud to present an education session at our GBTA 2021 entitled: NDC: Hype or Disruption? A Reality Check.
Join Cornerstone CEO Mat Orrego and SVP of Business Development Kyle Moser as they discuss what the Travel Industry’s New Distribution Capability (NDC) is, how it’s set to disrupt the industry, and what you will need to do to prepare to handle bookings and PNRs that are taking advantage of this tech.
NDC: Hype Or Disruption? A Reality Check — Transcript
Welcome, everyone. My name is Mat Orrego, and I am here with my colleague, Kyle Moser. We’re from cornerstone information systems. It is absolutely wonderful, to be with all of you and start to get our community, our travel community back together again. So what a, what an incredible opportunity this is for us to be all here. in lovely Orlando. So today we’re here to talk about NDC hype or disruption. Really. We’re here to educate, provide you with a little bit of insight, from our perspective and others. So first of all, who are we and why are we sort of qualified to do this presentation? So cornerstone, we tend to live in the world of automation on the back end of the travel industry, so to speak. So we’re a transactional processor.
We do things like ticketing and schedule, change management and reissues and refunds, and ticket tracking. That’s our world. And so we sort of intersect in the middle, of a lot of relationships out there, we’re driven by a lot of relationships with technology companies and have significant experience in managing travel transactions. And NDC is all about a new travel transaction. That’s starting to appear out there. Okay. So why this presentation, today? So like, I, we find ourselves, in the middle of, of a lot, in an intersection of a lot of, of things, in the transactional process of travel, our tools tend to work with, a lot of buyers. , we work with a lot of suppliers out there, tech providers, and even travelers. Okay. So any, we acquire a transaction, we do a lot of things to it.
Okay. So more and more, we’re starting to see things like direct bookings coming from suppliers, through this NDC channel, along with the very traditional GDS channels that we work with. And over the years we’ve been around for like 30 years, we’ve had to do a ton of integration around this workflow. The mid-office has become this RPA robotic processing that we do, So from an industry position, we’re, we’re sort of in this middle world, where we hear a lot from different parties, different stakeholders, and they all have something where they’re a trusted family member of sorts. Okay. Because we handle different parts of the transaction. And so we hear a lot about things. We hear things that they say about the other. Okay. So for us, that’s golden because that gives us experience. It gives us the opportunity to automate.
It gives us experience, and the opportunity to do things to value, add that transaction, make it more effective, to make it more, of a quality transaction as it flows through the ecosystem of travel. Okay. So that what we hope today is that we’re able to get into this, discussion, and I want this to be a discussion. So if you have questions, please, bring them on. Um, but we were hoping that we’re able to gain insights, from your ideas, from the ideas we’re gonna be here presenting as well too. So because this is a new way of doing things. Okay. And we wanna learn, from that all of us here. So with that, I’m gonna turn it over to my colleague. Kyle, tell us a little bit about what NTC is all about and
Good. Good. Well, thank you, Mat. Appreciate that. And, again, add my welcome. It is really great to be back here. , what we’d like to do is start with just a bit of level setting on NDC. So, to go in that direction, I guess one thing that we would be interested to know is maybe a little bit of a show of hands in the room, uh, how many are travel managers, buyers, large percent. Small percent. Okay. Kind of all clustered around here somehow. , are any carriers in the room? Oh, all clustered over there. this next slide is gonna work really well. I will tell you, and then everybody else, tech providers, that kind of thing. Look all clustered over. Well, you got a little bit of in the background over there too. Okay, good. All right. So, a bit of a primer.
What is NDC? We really got into the idea of NDC, several years ago, as a result of a session we were doing at the, I don’t know if you, many of you have been there to TTE travel technology, Europe show in London, back in 2019, coupled with the business travel show, Matt was actually facilitating a panel discussion called operationalizing NDC. Right? A good salesperson that I am knowing I had a stand. If my CEO did a session on operationalizing NDC, there was a good chance someone would ask me, how do you operationalize it? Which meant we had to learn, right? What is it? So in other words, NDC sounds really, really nice, really, really aspirational, right? It’s a travel industry-supported program launched by iota, right? The launched by the carriers themselves right through their, their umbrella organization, a way to communicate, enhance the capability to communicate airlines and travel agents.
The NDC standard enables the travel industry to transform the way air products are retailed by addressing the industry’s current distribution limitations, product differentiation, access, the full and rich content, transparent shopping experience, in a short little block of text. It’s amazing how much is buried in those words, right? Not many words, but a lot of meaning between them in pictures, it looks a little bit different, right. And here’s how we have everybody broken up. But, but the left side is really distributed today, right? So you have kind of, the airlines over here on the left with a whole bunch of content that they, they provide in, in siloed ways. Right. I give my fairs to, ATPCO my schedules to OAG, I’ve got a com an e-commerce engine down here. So I got a lot of different ways to give information, and this whole thing called the global distribution system popped up, which becomes the main aggregator of all that content.
Right. And now we have our travel agents, right. And finally connecting to the travelers and you see most of that conversation, or one way communication goes via those, those aggregators, right on the right, the, the vision of NDC, the airline controlling a significant piece of that front end, right. , putting all those boxes together, we’ve got this idea of an order or offer going to an aggregator, which doesn’t go right in the world of NDC. The aggregators are still there, through to what are now called sellers. So a little bit of different terminology and a lot of different people can be called sellers part of our effort, right? In, as, as we’ve gone through learning about NDC and starting to develop technologies to support it is to kind get around the terms, right. A TMC versus a cell or, and ultimately to the traveler.
But I think fundamentally what’s different in my mind here is really the, the notion of ownership of the offer, right? The left side is a bit like the magic eight ball. I put a bunch of content out, right. Somebody shakes it up, I don’t know who’s gonna be on the other end. Right. And hope my offer is good. The world of NDC promises a connection directly to the, the supplier. I know who they are. I know what they want. I know their characteristics. Therefore I can retail to them better. Now, granted, there’s a lot right. To, to go through that. , other thought, right. NDC is not necessarily so new. Right. It did come around in 2012, first set of standards. Right. There’s an interesting argument as to whether or not there really is a standard. We’ll talk about that a little bit later.
, 2015, March, 2019, according to a beat survey, nearly half of TMCs had processed a, an NDC booking. , and I sense, right. They reached their 20, 20, 20 goal, right. 20 carriers, 20% of their volume, by 2020. , and they reached that last year. So good news. Right? , from our perspective, if you distill it right, a couple of questions come up, right. Is ND C um, merchandising strategy, well, merchandising strategy in ownership of the traveler, knowing who they are, control of pricing and packaging, is it a distribution strategy, right. Direct content, or how do I get it out? Do I reduce my costs? My airline GDS cost, my GDS distribution costs, do I take more control of the relationship or is it it both? Right. And I think our sense is the answer is in a lot of ways that it’s both. Yep.
But we also spent some time talking to some folks out there because we wanted to over the, preparation for this presentation, we really wanted to get what was perspective today, about, NDC. And we had a lot of interviews, um, and they represented, in general, two areas, one which were very aspirational, about what distribution really meant, what working with airlines really met. The other one was quite functional, hands on kind of approach to it in conversations with Anne. If you look at her quote, you can see she very well represented that what she wanted was an outcome, that, aspired to having this thing work. Okay. She wanted you, NDC to work from the perspective that it was really about providing the great experience for the traveler, providing a great experience for the corporation.
And yes, they wanted also someone that, was a good supplier, an airline, and for them to be able to work well within this channel. But at the same time was a lot of trust, in how, these things had to work. Okay. From another perspective, we spoke to Diane son, um, who is global travel manager at Schroeder is a wealth management company. And her perspective was really more functional. And she’s, Anne is here in the United States and Diane is, is in, is in the UK. And NDC is sort of like ground zero over there for them. And so she’s had to do a lot of work to make it work okay. For her. She’s had to do a lot of integration of data, had to partner a lot with her TMC partner she’s been involved and invested in making sure that this channel actually works well for her.
So very, very hands on having to be extremely functional. Okay. And so those two perspectives really have, generally are the two camps. , if I’m going to live in a world of NDC, then I want everything, the way that I’ve had it today to continue working the way that it is, ? And then the other side of it is, well, I have no choice, but to make these things work because all the content’s getting pulled out and I have to have this particular channel and I have to engage in it. And now I’m having to become very hands on as a buyer, as a travel manager, the next presenter,
And it’s heart ind it’s, it’s a
Hold on. How do we, how do we advance it to the next slide? Whoops. Nope. Back that actually needs to go back there. There you go. So then we
Spoke with, and it’s heart ind it’s, it’s a set of messages, it’s message, transaction modernization. We’re taking these messages that have been in the industry since the 1950s, the EDI fact and teletype messages. And we’re saying, they’re not good enough. They’re not fit for purpose for today’s world in a world where your customers are sitting on their phone, ordering dinner, ordering a car, ordering a coffee, expecting them to go through a laborious process to book shop for and book travel. It’s just not meeting their expectations, but in DC is the found that will allow them, allow all of us to build and use applications that really, enable that modern retailing experience allow airlines to enable that for their customers. And if you talk about what moves the needle here, in terms of modernization, it’s a traveler experience that is easy and intuitive and it’s access to content that the travel manager wants that traveler to see and consume. And if the airline working together with the travel manager, negotiates access to content that they want their travelers to see, and ind is the way that you can deliver it, that’s where you’re gonna see the adoption.
Wonderful. So Todd, you, it was now, he was with United airlines, as director of distribution now with Excel and product, strategy. Um, certainly, I think did a great job in, in bringing what, the suppliers, are having to deal with and we’ll hear more, from him later, but the whole, the whole idea of the cross section of the work that needs to get done to make this happen is, is still, is still needing to go on. Okay. So, so there’s a lot that needs to get done here. We’ll get into that more.
Okay. , and what’s interesting to me in that little video clip is he really did kind of capture both the aspirational, all this wonderful content and, and the functional right. That you want to actually deliver right. Through a travel program. , and that creates, for, for us, something of a, I don’t know now a challenge, right? How do, how do we help with that? Given where we live in the industry, right at this intersection of so many different conversations. So, once we started, back in 2019, looking deeper into NDC, we looked into our own experience, what we were doing. And we find that we do work with a lot of things that are not, GDS data sources, right. We do work with a lot of different types of formats that represent travel transactions. So since then we’ve been reading lot, lots of articles, attending lots of webinars, reading, lots of papers, going to meetings, watching the evolution of the conversation around NDC to the point where from our seat in the house, right.
It’s really no longer what and why. Right. That conversation has been had to a large degree, but now it goes back to, to really how right? How do I execute on NDC? And the parallel that came to mind, right, is I be given the gray hair, you might say, go way back to nine 11. Right. And in a way COVID is to NDC, what, what nine 11 was to online booking. I’m not suggesting NDC is a terrorist attack. Although some may see it that way, nor is it, , an aggression of some sort, but, back around nine 11, there was in fact, a big disruption, right there, there was a chain engine, the way business was done, there was a slow down in activity. , there was economic disruption, right in the travel business. At the same time, there was some evolving new technology, right?
There were these online booking tools that was starting to gain traction, starting to gain like, wow, this is really cool stuff, but all of a sudden, boom, and the towers come down, everything kind of slows down, but that innovation continued. Right. , coming out the other side, right. Talked to a lot of travel folks who’ve been around that long, all of a sudden, right? That, that disruptive event accelerated the adoption of this very promising new technology and low and behold, right. You online booking now is, is what it is. Right. We see in some ways COVID was the same, right? Over that time, go back to 2012 to 15 to 19, right. There’s evolution in the technology. , what I’m starting to hear in the conversations I participate and is more awareness that a, how has to come on the back of a what and why, and, and coming out of COVID that that effort continued.
And now the conversation is changing, right? The pressure is there to accelerate the adoption of NDC in carrot and stick format. Right. If you’re a carrier, particularly if you’re outside the United States, you get really nice things. You could like GDS surcharges, right. You can yank the content from the GDS, which is a great form of pressure, right. If you’re a buyer, right. The aspiration has been around for a long time, right. Like I really want it, I want those bundles. I want those offers. I want to be able to negotiate these things. But if you go back to somebody like a Diane, right. It’s well, guess what I rely heavily on BA to get from, into anywhere. And if that content’s not available U TMC, you gotta get it for me. Right. , so the pressure really is there. Right. Which creates for us, right.
This idea of, of kind of an expediter’s dilemma. Right. , my first job, back when I was a little teenager was in burger king, which is where I decided I did not want to do that for the rest of my life. Right. Hence some in travel, , never clean another hood. , but , the big issue for us was right. You got a bunch of customers over here, you got a bunch of product on that side. How do I get it out the door as efficiently cost effectively, profitably as possible. Right. And in this case, the real constant, right. That service provider is the T C I think most, everybody would probably agree. It wasn’t a bad thing to have a human being to call right. In the last couple of years. Right. So the TMC, the seller is not really going away and their task is really to assemble and deliver that trip.
Right. Liken burger king. Right. I got the burgers and the buns and all that kind of stuff. I’ve got all this content over here. Right. I got people on the other side who want it, buyers, travel managers, travelers. And the issue now is, is, look, this is what I want. Right. This is how I want it served up and make sure you give me an itemized receipt. Right. , so very, very challenging. So it really becomes all about operationalizing, NDC that to us. And that’s why we feel we’re reasonably well qualified to do this. Cause that’s what we do. We operationalize travel. So really to achieve the hope of the hype, right. NDCs gotta go from not so much a dis disruption, but to a sustainable way of actually doing business. Right. , which creates a learning curve, right? Mm-hmm , so servicing this idea is really starting to get traction.
I, I, the one I keep going back to is an iota webinar. I sat in back in June, right. And over and over and over again, I heard servicing servicing survey servicing. I’ve been to visit carriers. I’ve been to visit se suppliers who serve carriers, support carriers. And I’ve been very surprised to hear how little awareness there was about the way a travel agency actually works. , but that knowledge is starting to, to, to come to bear, I guess, , but what is servicing in a lot of ways, it’s still an unknown quantity. It brings me back to that famous quote by a Supreme court justice about a topic we probably are not supposed to talk about. , but I may not know what it is, but I certainly know what, when I see it or in the case of NDC, more likely when I don’t see it. So let’s play, let’s play tie, let’s play tie
From a purely technical perspective. NDC brings a lot more content and capabilities, not only to customers, but the TMCs themselves. And so there, there will be a learning curve for certain, what are these new products and services that the airlines are capable of putting out and how can I best guide my important corporate travel and customers, through that process to make sure that they can obtain it and, doing things like taking that, remember in the future, a PNR, we call it an order. So Vance, the view response that contains all the elements that you need to process them think through the mid-office system. And to be able to communicate with the airline systems using is new in DC messages. And of course the other side of that is the back office accounting system, the ability to take those transactions and account for them not only the ticket, but these, these bundles and EMDs that are coming through and make sure that you’ve got a full, um, understanding of what the customer bought. , the other thing that we’ve talked about in the past is a, a data from the airline into these applications so that, a hundred percent, oh, the customer bought from me in the corporate channel, in the, the agency channel, but then they made a change with the airline. Well, let’s marry data back together. So you, as the TMC always know, where the customer is, you’ve got the right duty of care information and you’ve got the right itinerary, et cetera, and NDC can make all of that happen.
Wonderful. So operationalizing NDC, it, it, it’s the reality really, and more, it’s not only operationalizing, it’s really orchestrating, that transaction again, we’ve been highly dependent on, on these wonderful technologies that have carried us over these years in bringing together, travel like a GDS. But , all of, now the changes that are occurring are really ones that are, are going to drive a better, product offering for the consumer out there. So things had to change. Distribution had to change. We all get that, but ultimately there’s a lot of things that we liked about how it works today and, and those kind of things need to continue to happen. So operationalizing and orchestrating, this is the next, sort of frontier. So what’s the bottom line. Um, it’s, it’s not as much, about the willingness, to adopt this.
I think the argument has been well made that, this could be better, that this is a better way of doing things. Um, but it’s really about being able to do it. And, and what does that take? Okay. And so, it’s about being able to it in a way, that doesn’t impact basic corporate managed trip requirements. It, it coexist with policy and policy management as it is today. So that requires that the same data sets and the same workflows are, are adhered to okay. And, and there’s a lot of ups there today because there’s a lot of understanding in these silos that sort of we’ve created between buyers and distributors and suppliers. That NDC is sort of forcing this understanding across that ecosystem as to what is it that you need from me now, because I was relying, for a long time on this system and this process to be there, the TMC itself, I mean, they are certainly an intermediary that lives there in the middle providing services.
They’re also in a technology enabler and one that, stands up technology for buyers, as well too, those, are the points of service right there. Um, are they sellers well, selling now has to take place together with the suppliers more than ever, with NDC, but the servicing side of it there that has to scale well, in order for this to happen and for the TMC to really do their best possible job for, for the buyers. Um, and it also needs to drive to the objectives of the supplier, the airlines out there and what they’re trying to do in being able to sell their product and how they want to sell it and offer it in a competitive way through these new distribution capabilities. So it is a systems integration is issue. It is that of orchestration. So if that’s the case, Kyle’s gonna share it with us a little bit. Now mm-hmm, about what is it going to take? What are the mechanics of that?
Yep. And I’m gonna leave it on this slide for just a second, thinking about in, in going into this systems, integration exercise, the question is really, what does it mean? What are we trying to get to in that servicing? So if I’m, if I’m a buyer, right, it it’s essentially table stakes, right? And this, this where again, I continue to, to be a little bit surprised, how much we’ve got to go, on this. But, if I’m a corporate, right, I expect certain things, right. I expect to be able to, to do fair comparisons, right. I expect to be able to get information out on used tickets, right. I expect to be able to, to integrate with my duty of care system. Right. I expect to be able to put this transaction into what has been for quite a long time, a well developed set of travel practices.
Right. So that’s what we’ve gotta drive to if I’m a TMC, right. As that service provider, right. This, this is a real significant challenge right. In that the TMC now has, well, again, a lot of talk about content, right. But put yourself in that position. Right. And again, I think some good examples do come out of the UK, probably out of, continental Europe, it may be Singapore and growing Hong Kong, right. Because if I’m a TMC and I’ve got to integrate this content in, that means I need a new way of booking it. Right. We talked before about online booking tools, becoming a dominant way for travel, to be booked, right. It lowered a lot of costs with the corporate, right? Because your service fee for an online booking is considerably lower than the, the service fee for, for traditional booking.
So if I’m that TMC some way, now I’ve gotta introduce a new thing, right. That reaches into all these different sources and pulls it into my system right now, interestingly, well, maybe not interestingly, but by over time, that system really has, has become the GDS. Right? So it, liked it like them or not. Right. They have, have built an ecosystem that really does enable and support a lot of workflow. So if I’m that TMC, now I gotta start to think about, well, what new tools do I need on the front end to be able to capture this data? How do I get it? , from this source into my servicing systems, which in large, large part is the GDS, but the carriers in a lot of ways have taking that off the table, right? You can’t put this booking right in the GDS because you would have to do it in the form of a passive segment.
And if you’re gonna do do it in the form of a passive segment, I’m gonna charge you nine pounds of shot. Right. , and so, okay. I guess that’s right. , I’m not even gonna give you the option to see the content. So you’re going to have to go pay for some other tool. , that’s servicing hub. Now problem is a real issue. Right? I gotta take that booking. I gotta get it into what now becomes my servicing hub, which is probably my back office system. I gotta do it without the tried and true a as an IUR as an MI, right. Those interface records. I gotta get it in it another way. So now I can push it out, use it elsewhere, in my processes to do what I do best. Right. Which is serve my customers. Right. And then of course, as the, the carrier, the things you gotta start to think about, to drive toward those aspirations of owning the relationship is well, but, dog Chase’s car, well, what happens if you get it right?
, a, a good exchange I heard in, in an iota webinar between a carrier and a TMC, right? This particular TMC, again, based, in the UK, their niche was moving travelers, semen, right? From ship to ship, to ship, to oil rigs and that kind of thing, right. They made big investments online technology to bring NDC content in. But guess what, you’re gonna make a booking somewhere. Somehow a schedule change is gonna occur, right? There’s a very well developed set of processes now to handle that kind of stuff. And we do a lot of it, right? For Expedia, we handle somewhere, I don’t know, 10 to 15 million scale edge will change transactions a month. Right. It works pretty well. But if I’m a carrier, all of a sudden, I own a relationship, I’ve got a TMC who has an SLA to serve their customer.
One of which is if the guy can’t get from the ship, to another ship, because if a schedule change, what am I left with? Right. I gotta pick up the phone, I gotta call a carrier. And how many customer service reps are now on the other end of the carrier’s phone line. So in a way, do I wind up as the buyer, in that case, trading one cost for another, right. Maybe I got, a better fair, but what happens on the other side with the TMC? And then as a carrier, how do I actually own this thing? Right. How do I handle schedule changes for how many thousands of people, and do it without adding extra head count? So for us, it kind of boils down to four things, right? One is data capture, right? The first barrier, if you will, maybe barriers, not the right word hurdle to be overcome challenge, to be raced, right?
It’s about data capture, right? There’s a lot of great innovation going on in the booking tools. We see it all over the place. There’s probably people out in the, the exhibit area, who can show you how they can bring a lot of that content in. But the fundamental challenge is to take that NDC order, right? Get it into a back office, do it without passive segments. Right. But do it with the same degree of consistency, completeness, as exists today. Mm-hmm right. You hear about standards, IA 17.2 IA 21.3. Right. All those standards do exist, but there’s a lot of variation in what comes through those standards. So just capturing it, right. Being able to tell, did this book come from a GDS or did it come from NDC is really hard, right. For a lot of TMCs, which ultimately impacts right.
The buyers. Right. So first challenge, right? How do I capture that information? So I can get it into this visiting system and continually capture it, continually it, the changes are continuous. And so you always have to maintain state. Yep. Yep. Exactly. Exactly. And I reference that right in his comment. Mm-hmm the next is quality, right? TMCs have made an awful lot of investments over the years. You walk around the floor and they’ll tell you all about it. And they’re right. They’ve made a lot of investments in data, quality tools and technologies. Very much like the types of things we do. Some have built themselves, our competitors do, right. To be able to take that captured data and make sure it’s up to snuff, right. Usable, right. By, by the buyer, by the traveler, by all of the associated, people who live adjacent right.
To that transaction due to your care is like any easy, an easy and obvious one, but, but in the GDS have become, some really, really powerful tools around things like profile data, right. , an NDC booking comes through. I can tell you pretty much for certain in an iota standard, right. You’re not gonna find a lot of fields for cost centers, project codes, this, that, and the next thing, and guess what you need. Right. So how do you get that information in to make sure the quality is there the basics of file finishing, making sure all your reporting fields are there, you have set in your negotiations, right. With your TMCs standards, for quality, right. I want you to run these 10 checks. Right. Well, how do I apply that right. To a booking that it doesn’t come through the conventional model.
Right? So that’s where, where we live. A lot of that innovation starts to happen. Now, how do I actually start to do that? , workflow management, right? Workflow management is, is an area that really is important to you as a buyer, right? You may not think about it. You rightly put a lot of reliance on your TMCs because they are experts right. In the facilitation of a transaction. But this disruption right. Has created a big gap, right. In the ability to integrate this NDC order into the ordinary workflow of the TMC goes back to that point, are you gonna trade one cost for another? Hopefully the answer there is no, but while all that innovation has happened on the front end and booking tools, now it’s gotta happen on the idea of workflow management, right. , and again, depending on whether you’re more in the aspirational camp or in the functional camp, to some degree, you’re gonna live with that in the hope of that innovation, you’re in a market like the UK where you simply don’t have content, you’re gonna have to probably get a little bit more hands on.
Right. And how does that workflow actually occur? , and I would say, I think the carriers are starting to develop some awareness. I’ve again, I’ve been on various different, webinars. We’re starting to talk about the mid and the back office, but at the moment there is, I think still a fairly significant gap, right. To be closed there. , the last barrier is probably the one that’s the most easy to, easy to see. Right. And that is that whole idea of reporting and analytics. Right. , the reporting needs are evolving and to be determined. Right. Oh, good, great. Thanks a lot. Right. In other words, I don’t know. Well, the fact is we do know what kind of basic table stakes travel management or reports are required, but the question becomes, how do I bring that information together? , once you start doing your first bookings in NDC, guess what, you’re not gonna be able to go onto your reporting tool and find a quote standard report that provides right.
That type of detail. So ultimately it does again, become all about the data, right? As NDC adoption accelerates, you will need to be aware that the, as reporting tools and capabilities are going to have to follow along, there may be an entire, set of rework that has to happen right. To, to give you what you need to understand about how those programs are working. Are you getting to the aspiration, the idea of how do bundles affect my budget, right? How do I adjust my travel paw to reflect the reality that someone is now merchandising to my traveler? The other question you might want to ask is, would the carrier even, merchandise to that traveler, if you weren’t paying for it. Right. I do wonder about that myself. , but , that’s another question for the industry as a whole, in the end.
Right. , what we would suggest really is that as a buyer, it’s important for you to be aware of those barriers through, to integration, right. So it’s not, so it is good to rely on your TMC. It is good to trust that they are working toward these because I can tell you very much that they are aware of it. Right. , but, but they will have to overcome these barriers and you’re gonna have to either live with them or support them right. In that. So advice, right. What would our advice be? Right. , understand your priorities, pick your path. Right. And as we see it, they’re really two, two paths to pick, right. One is the op the aspirational, and one is the functional, right. From an aspirational perspective, essentially it’s probably a bit of, do what you’re doing now.
Right. , it’s take advantage of the industry innovation as it develops. Right. Keep abreast of the trends. Right. It’s really good to attend these webinars to read, to, to participate, in focus groups where you can right. Ask a lot of questions, right. , select your opportunities, right. Because the TMCs themselves, the sellers in NDC speak, are looking for things like MVP, right. Pilot projects. Right. , our suggestion, is support that, right. Because that’s the way the, the innovation will occur and that’s the way it will, it will become much more solidified like the, the processes we have today. Right. And ultimately, if you do that, right, you’ll reap the rewards, as they become available. Right. If you’re on the other side of it though, you’re sitting over in London, you’re sitting over in Frankfurt, and you have to take a more hands on approach.
, what we’re suggesting is that, that you’ve got to get engaged and you’ve got to stay engaged, right? The one customer, well, Diane, who we referenced before uses an application of ours called a policy compliance manager. It, it takes a reservation, it assesses it against a bunch of policy rules. Right. And then it, it helps facilitate a decision, right. For her, NDC and the journey into it began with understanding. What’s actually coming out of the TMC system and into the policy engine, because now it allowed her to get much more intimate and transparent with the data. So understand and how data impacts you understand how it impacts your markets. Right. Set your expectations accordingly. , I think something you’ve gotta do is go back to your TMCs and insist on some transparency as it relates to the data. All right, show me, what is it that’s actually coming in so that you can then start asking the right questions. And ultimately, we think there’s a benefit. , our customers would suggest that there is some benefit in that functional camp of having a bit of a direct relationship with the technology.
Whew. Good job. That’s it wonderful. So that is NDC and in the, in the evolving, process of it and it truly is evolving. Okay. We, thank you. Thanks for attending. We’re open for questions. I think we’ve got some folks here with, with Mike. So anybody have a question out there? Come on. We’ve been shut in for 17 months. I don’t have a little square box around my head.
So something that’s not talked about is from, I guess, the supplier side, the pricing and the customized pricing and what that could look like and just kind of anecdotally thinking of I’m sure we’ve all Googled something. And then the next thing you’re on a site and you’re seeing ads and 10% discount. And I, I, I mean, I get where one of the great positives is that can be this very customized pricing. Mm-hmm , but one of the big challenges we all face, regardless of if you’re a supplier or a buyer, is this, Hey, I’m seeing a different fair than my neighbor, but we’re creating an environment where all this made data, your age, where you live with the company you work for, could put potentially be in a place where there’s highly customized pricing and how’s the industry gonna address that atmosphere.
Right. And from, and from a, from a buyer contracting perspective as well too, I mean, that, that hasn’t changed. I mean, you’re, you’re out there to develop a supplier relationship, with, with an airline. And how do you manage that? Those things haven’t changed. NDC has the potential to provide, more dynamic pricing, dynamic packaging, all of that. It facilitates all those things, but those, those are good questions. I mean, that is, that is the discussion that needs to take place because in, in full transparency, there is a lot more information that you’re giving up in the process of, of, of, of transacting with, with an airline through
NDC. Yeah. The other comment I might add to that right. Is in my, kind of on the ground discussions, we’ve asked that the, essentially that same question, right. And what I am not seeing at this point is, essentially the sales team for the carriers broaching that conversation and contract negotiations yet, I, I myself have not seen it now. It doesn’t mean it’s not happening, but I, I haven’t seen it happen at this point, but, and then a question comes back to, you go back to some of these standards, right? 17.1 21.3. Well, I know some carriers can split out things like seats and this and that other carriers can just give you a number. Right. So even if they do negotiate it, part of that whole issue of, reporting an analytics is how do I split it out? So I can actually determine, did that merchandising have a good effect? That’s not there yet, from what we’re seeing,
The, the only, the, the, where it’s starting is definitely a distribution. , the new part we’re waiting for. I mean, in some cases, the packaging, how everything comes together, that, so, but it started with distribution and just changing, the plumbing. Yes.
Okay. Um, this may be an unfair question for you, and I’m not sure I really understand NDC completely, but, how is this gonna impact the negotiation process that the, that the buyer has with the airlines?
Yeah. That, well, it’s kind of the, the same comment, the, the truth be told it will ill. Right. , but I have not seen any evidence in any of the conversations that I’ve had with, with buyers. And there’s been quite a lot of them, that, that suggests that the carriers actually know how to do that yet.
I mean, as I understand it, it’s kinda like customized pricing for every traveler. Yeah. , so you have a thousand travelers in your, and everybody’s getting different prices. Well, yeah. I,
I agree with you
Outta of the airlines, negotiate with us anymore. Yeah. And
That’s more, that’s definitely more on the consumer side, I think on the corporate side, I think it’ll, it’ll have, it’ll, it’ll have more of that traditional, framework. It’ll be more about that packaging and the consistency ability to get that particular packaging offered up to you. I don’t know if it’ll be as dynamic as it would be if you were, a leisure traveler or consumer, out there, but, but it could be, I mean, there, there’s the opportunity, if who the traveler is, mm-hmm to, because of their status, on that airline to, to treat them a little bit better, than maybe someone else in the organization that doesn’t have that status, but those are discussions that you need to have because it just opens up more questions. Right. In other words, if that’s the capability then, is that the fair way to treat, all of my employees, just because one has status and , and some don’t, I don’t know, big questions to ask other big questions. All right. Oh, yes. How’s the TMC going one second. We,
Yeah, they’re recording the session. So you gotta have the mic. Yeah. But we’re all waiting with Beed
so how’s the TMC gonna replace the revenue that they get from GDSs. If we’re going directly into airlines, what they cause that’s gonna affect me as a buyer, I’m gonna have to pay for that. Probably.
Yeah. Yeah. The economics, at the moment, all I’ve heard is, is it’s kind of like you go back a couple of years, and, and it was vague reference to, to operationalization, generally right now, I still hear kind of that same reference to, and the commercial model. Right. And then let’s change the topic and let’s move along really fast. , but go back to like the conversations I’ve had with the, the guys in the UK. Right. , all of a sudden now, like he makes like seven pounds for an booking, right. To add on this NDC content, he’s gotta get another tool. That’s gonna add another two pounds to it. Right. He can’t put it in the GDS or he gets whacked for nine. Right. So now I gotta figure out how do I pay my back office vendor, right. To take something that looked like an a I R and get it into here. , yeah. The short answer is, I don’t know, but, well, but you can speculate,
But you can speculate. I mean, you can speculate, I mean, this, look at Amazon, this is the, the creation MDC is the creation of an Amazon, like environment, for the airlines. So we know very well that there’s a single platform in there, but there’s a ton of eco and economics, that are shared and, and commercialized because that platform, I is so dynamic, so we came from commissions and, segment subsidies, from the GDSs, all of these kind of things. And so, Hey, if we’re creating this new distribution platform, these capabilities, then perhaps some of these things are built in, to it too. But, but we don’t know. I mean, we really don’t know, what gets packaged in at this point. Right. But, but we know that people gotta get paid for what they do. Yeah. , and they’re used to certain economic streams, that have allowed them to do that. And that’s kind of unique in this travel industry is that you get many strange revenue sources, a lot of them opaque, and not understood. Yeah. But that,
That’s a breakdown. Yeah. I will give the carriers credit though. Cause like I said, I, I, I have heard more substantive conversations coming outta their teams about an understanding of the mid in the back office. Right. So I think they’re getting it right. So, and that’s, it’s different conversations than they were,
A year and a half ago. But yeah, you gotta capture the data. You gotta know where it came from. You gotta understand, you gotta have your service level agreements tied to all of those kind of things and then figure out how people get paid that’s of questions. Wonderful. Look at that. Hey, we’re down to 7, 7, 7 seconds. 5 4, 3, 3, 2, 1, 1. Happy GBTA. Everyone. Thank you. Thanks for coming. Appreciate it.