Distribution 2020: A Big Change For Travel Agents

Photo: IATA

The year 2020 is less than four years away, but there will be at least one significant development on the travel distribution front, according to Henry Harteveldt, travel analyst with Atmosphere Research Group in San Francisco.

“The implementation of NDC (IATA’s New Distribution Capability technical standard) will have the most profound effect because of what it will enable,” Harteveldt said. “Travel agents will be able to sell relevant, personal offers to better serve their clients.”

The move to an NDC world will be an ongoing process rather than a “Hollywood-style miracle.” But that process is already under way. “NDC is now being used day in and day out in the real world,” Harteveldt said. “This is the first wave, and it’s nowhere near the finished state. It is an evolving set of standards and commands.”

Harteveldt believes that agents will appreciate the potential NDC offers to give clients what they really want. “That will be different things for different people,” he said. “Some people want cheap—they’re fine with a seat and a seatbelt, whether they’re on a domestic flight or flying to Asia or Africa. Others will want a mix of amenities.”

Ideally, he said, the system with which the agent is working will provide some offers to suggest to the client; if those don’t work, it will offer something else.

Still, Harteveldt has some concerns: “How will the process work so that productivity is not compromised?”  

Agency owners have told him that their front-line employees are spending a considerable amount of time processing sales of ancillary products, which at this point are mostly paid seats, and the agency is not being compensated for the extra time and work—“that’s not really a good situation, and I understand their concerns.”

Agents also wonder how they are supposed to compare offers from different airlines. “Will it be easy to understand what’s included? Will it be straightforward?”

But Harteveldt is encouraged on that front. He believes that IATA, the GDSs and the airlines understand that the shopping and purchase process has to be thought through extremely thoroughly—and that the airlines are very aware that agents have only so much time. ASTA has been helpful in making the need for balance clear to the airlines, he said.

Where he sees a need for more attention is in training. “Airlines and GDSs have not begun to have conversations with agents about NDC,” he cautioned. “Who will provide what kind of training? There are a lot of unknowns out there that have to be answered.”

IATA is working hard to minimize hiccups, but Harteveldt is concerned that there will be “things we didn’t know we didn’t know. 

Still, while the first wave of implementation may not be stellar, he is confident that subsequent waves will be “better, more useful and easier.”

Plus ca change
Despite the big changes on the horizon, many things will remain the same in the travel distribution channel over the next five years, Hartevedlt said. “Travel agencies will still be around,” he noted—though how they do business will differ. “There will probably be fewer of them, and more of them will be home-based.” 

More airlines are likely to embrace direct connections with travel management companies, and agencies may be moved to set up their own “switches” and business rules—thinking, “for this type of booking, I will use this GDS, and for that type, I will use another, and for a third type I will use a direct connection developed by Farelogix,” Harteveldt said. The important thing in such a regime is to maintain “a consolidated view.”

Harteveldt moderated a panel discussion titled “Travel Distribution 2020: Movers, Shakers and Upstarts” at the ASTA Global Convention in Reno on Tuesday. He was joined by David Friderici, vice president and head of product management and strategy at IBS Software Services; Gary Tofano, director of account management for Travelport’s Americas agency commerce business; and Stewart Alvarez, vice president of commercial development and industry affairs at Amadeus North America.