What Does NDC Mean for Travel Agents? Key Benefits & Challenges

The airline industry is taking off into new skies with New Distribution Capability (NDC) at the heart of this transformation. This fabulous development, initiated by the International Air Transport Association (IATA) is redefining how travel managers navigate the complexities of corporate travel, changing everything from pricing transparency, access to unique services and offers.

In this blog, we’ll explore what NDC really means for travel managers, the significant benefits it offers, and the potential challenges of integrating NDC into corporate travel strategies.

What Is NDC in the Travel Industry?

Before we discuss its benefits and challenges, let's first understand what NDC (New Distribution Capability) stands for in travel. Simply put, IATA developed this modern communication standard allowing airlines to distribute their offerings (fares, ancillary services and upgrades) in an easier and more flexible manner than before - without using traditional Global Distribution Systems (GDSs) like Sabre or Worldspan! By connecting directly with travel agencies or corporations directly using NDC they can now present more comprehensive product and service portfolios to potential clients.

Travel managers benefiting from NDC have access to more detailed airline content, tailored packages, and enhanced pricing options, which has significant implications for corporate travel programs and their management and optimization.

The evolution of NDC in the travel industry 

To grasp the significance of New Distribution Capabilities (NDC), it is essential to first consider the evolution of airline retailing and how distribution practices have transformed over the years. 

• 1950s–60s: Manual Systems Era

Initially, airlines and travel agencies managed reservations manually using paper-based records. This process was both time-consuming and labour-intensive.

• 1960s–70s: Computer Reservation Systems (CRS) Era

With the launch of computerised reservation systems (CRSs) like SABRE, travel agents gained electronic access to flight information and booking tools. However, each airline operated its own unique CRS, making cross-airline bookings cumbersome.

• 1980s–90s: Global Distribution Systems (GDS) Era

Deregulation of the airline industry in the U.S. led to the introduction of Global Distribution Systems (GDSs). These systems unified airline inventories, enabling travel agencies to access multiple airlines through a single platform—a game-changer for the travel industry.

• 1990s–2010s: Online Travel Agencies (OTA) Era

The Internet revolutionised airline distribution as consumers could book flights directly through airline websites or through online travel agencies (OTAs) like Expedia and Travelocity, vastly increasing access and convenience.

• 2010s–Present: New Distribution Capability (NDC) Era

The airline industry introduced the New Distribution Capability (NDC), a technology standard that allows airlines to share rich, personalised content and add-on services directly through websites and apps. NDC enables airlines to deliver customised offers and detailed flight information to travellers more efficiently, modernising airline distribution.

Key Benefits of NDC for Travel Agents in Booking Airline Tickets.

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As NDC technology gains traction, travel managers stand to benefit in multiple ways. Here are some of the key advantages:

1. Greater Access to Rich Airline Content

Travel managers using NDC gain access to an expanded library of airline content directly, from basic fares and in-flight Wi-Fi connectivity options, to lounge access and upgraded meal packages.

Why It Matters

NDC content in travel goes far beyond traditional GDS platforms' simple fare structures, giving travel managers access to customizable travel options tailored specifically to employees' needs and preferences. From extra legroom for long-haul flights to accommodating those with dietary restrictions - NDC adds another level of convenience. 

2. Enhanced Pricing Flexibility

One of the positive sides of NDC in travel includes its pricing flexibility. Airlines using this method have more freedom to adjust prices depending on real-time demand, seasonality or any other factor affecting traveller behaviour.

Travel Managers: With this flexibility comes better fares at more competitive rates, along with opportunities to take advantage of time-sensitive offers tailored specifically for corporate travel needs. Corporate travel managers can use this wiggle room to secure the best deals within budget while offering their travellers an enhanced travel experience.

3. Improved Transparency and Visibility

Transparency in travel pricing has always been a challenge. Hidden fees, inflexible fare structure, and limited visibility into what a ticket truly includes are common pain points in the industry. However, with NDC, travel managers now have a clear view of what fare includes and the other options available. 

‍Why Is It a Game-Changer?

NDC’s advanced transparency enables travel managers to make informed decisions while choosing fares that align with corporate travel policies and budgets. Instead of dealing with surprise costs, managers get full disclosure and reduced expenses along with a stronger grip for companies on their travel budgets.   

4. Direct Airline Relationships and More Tailored Offers

NDC connects travel managers with airlines to work directly, rather than going through GDS platforms. This direct connection often results in exclusive offers and loyalty perks for corporate travellers. 

How Does This Benefit Corporate Travel NDC Programs? 

Travel managers can negotiate more favourable terms, access perks like priority boarding and business class upgrades while presenting direct travel options that benefit their organisation’s frequent travellers. This direct line of communication opens doors to highly personalised service further strengthening the travel experience for employees. 

Key Challenges of NDC in Corporate Travel 

While its advantages are clear, integrating NDC content into corporate travel strategies does not come without obstacles for travel managers. Here are a few hurdles they might encounter:

1. Initial Integration Complexity

NDC is a new standard, and its implementation into existing corporate travel platforms and booking systems can be complex. Many organisations rely on legacy systems that may take time and resources to adapt so as to work seamlessly with NDC content.

Travel Manager's Dilemma: For organisations lacking resources for comprehensive integration, this challenge may impede the adoption of NDC benefits. Travel managers may need to work closely with IT teams or external vendors in order to access and manage NDC content effectively within their corporate travel systems.

2. Limited NDC Content Access across Airlines

While several major airlines have adopted NDC, not all airlines provide consistent access to NDC content across carriers - corporate travel managers may find varying access levels between them and different carriers.

Manage Mixed Content Sources: When managing a travel program that involves bookings with different airlines, inconsistency among content sources may present travel managers with difficulty. They may still rely on GDS for specific routes or carriers, which means that they may be limited in accessing NDC's customised offers and enhanced content.

3. Training Travel Agents and Employees

NDC booking interfaces and tools may differ significantly from what corporate travellers and travel agents are used to using, thus necessitating additional training sessions for all involved in transitioning to NDC-based platforms.

Why This Matters for Travel Managers: As National Distribution Centre adoption increases, travel managers may find themselves organising training programs to acclimate travel agents and employees with new booking tools and interfaces - this may present initial learning curves but is essential in realising all its advantages.

4. Fragmented Booking and Data Tracking

NDC's direct booking model forces travel managers to monitor bookings made across various channels, which may make data tracking and reporting a more complex task.

Corporate Travel NDC Data Management: For companies with rigorous compliance or reporting needs, managing NDC-based bookings alongside traditional GDS bookings may require additional processes and tools. Travel managers may need to partner with tech providers or invest in new tools in order to maintain an integrated approach towards tracking expenses and reporting travel-related data.

Conclusion 

The adoption of NDC in the travel industry signals a new era of corporate travel management. By offering greater transparency, pricing flexibility, and customizable options, NDC endorses travel managers to deliver a travel experience that feels personal to all the company goals. 

In short, NDC in travel is more than just a technological shift; it is a gateway to a smarter and more adaptive approach to corporate travel management. While internal challenges like integration complexities, limited content availability, and adaptation issues exist, these obstacles are here for a temporary basis. 

With the advancement in technologies, these challenges can easily be overcome. NDC represents a unique opportunity to redefine corporate travel and create a more satisfying and cost-effective experience for their organisations. 

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