There is a growing interest in NDC in travel industry, including the corporate travel sector. It assures greater pricing transparency and richer content for a better traveler experience besides improved cost savings. Travel managers may not have seamless access to the new Low-cost carriers (LCCs) as these may not be within the Global Distribution System (GDS). Low-cost carriers dominate some regions, like Asia Pacific, by controlling over fifty percent of air traffic. NDC standard allows corporate travelers, travel managers, travel agents, and travel management companies better access to these airlines.
Corporate travelers looking for improved traveler experience, access to better data, and better cost savings. The International Air Transportation Association (IATA) developed a unique standard to help airlines enhance content distribution across stakeholders in the travel industry. We know this XML-based data transfer standard as the New Distribution Capability or NDC. The new standard can effectively address the issues and shortcomings of the Global Distribution System (GDS).
What does NDC stand for in travel?
NDC in travel is the standard for data transfer to address the limitations of legacy distribution systems like GDS. In an increasingly competitive field of airlines, the providers need to differentiate services by presenting ancillary services and customizing offers.
Airlines can distribute rich content comprising images, texts, and videos by leveraging the XML-based data transfer standard of NDC. Delivering rich content is crucial for marketing and brand recognition for airlines.
Online travel agencies, travel management companies, and corporate travel management tools can reduce dependence on Global Distribution Systems by using NDC in travel supplies.
What exactly is New Distribution Capability?
New distribution capability or NDC is not an online program or platform for airline content distribution. It is an XML-based data transmission standard to connect travel suppliers and airlines. NDC boosts the marketability of airlines by allowing better positioning of their auxiliary services, special offers, and products.
Several airlines are developing custom NDCs to design offers for each customer by addressing their preferences. Airlines appreciate the role of NDC in travel industry and consider the new standard as a business enabler. It helps them distribute diverse content types and provide information on ancillaries like meals, Wi-Fi, and baggage booking.
NDCs help travel managers, online travel agencies, and travel management companies deliver a superior booking experience to business travelers.
Why was NDC created?
Global Distribution Systems cannot support the distribution of rich content because of its legacy protocol. Airlines struggled with inadequate support from Global Distribution Systems to share the rich content and ancillaries with OTAs and Travel Management Companies. The following issues with legacy solutions, like GDS, inspired the creation of New Distribution Capability (NDC).
1. Lack of personalization
Online travel agents and travel management companies cannot provide custom-recommendations relevant to the traveler’s preferences when using Global Distribution Systems. A traveler with a frequent flyer status can access more offers by booking directly from the airline than from a travel agency or TMC.
2. Delays in displaying new offers
It is easy for airlines to launch a new product or offer through their website within no time. However, travel agencies may take months to share these with their customers.
3. Lack of product differentiation
Legacy content-sharing platforms like GDS do not support the distributing rich content like videos and images. Airlines cannot differentiate their products to gain an edge over the competition. Differentiation also helps customers make informed decisions.
NDC in travel industry allows airlines to share content from their websites with customers and across the channels of online travel agents, travel management companies, and online travel management tools.
Benefits of NDC in travel
Instant replication of the website content of the airline’s website to the online travel agents’ channels helps customers access the latest product upgrades and special offers. Travel suppliers can provide updated information on the most recent products to customers.
These are a few main benefits of NDC in travel industry:
1. Enhanced shopping experience
The New Distribution Capability empowers airlines to create customized choices by knowing their personal data. Airlines can personalize the offers to corporate travelers by knowing the personal information of the customers.
2. Product positioning through distinction
NDC allows airlines to position their products and services by presenting value-addition benefits to stay ahead of the competition.
3. Enrichment of content
Airlines can include rich content comprising ancillaries and other special offers to improve their profitability.
4. Dynamic pricing
Airlines can personalize airfare and travel package through the dynamic pricing facility of NDC in travel. They can modify pricing for individual customers by building unique APIs.
Downsides of NDC in travel
Implementation of NDC is a costly process. Besides, there is no compulsion to become NDC compliant for airlines or online travel agents.
There is no specific standard for implementing NDC, as the airline’s IT provider can create a unique system for the client. It can lead to myriad connecting channels, impacting the ability to integrate at the level of travel management companies and online travel agents.
Travel agents and travel management companies are not ready to shift from the comfort zone of the present GDS platforms. Implementing an NDC will require additional expenditure for travel agencies. Most travel suppliers consider New Distribution Capability as a premium feature rather than a necessary requisite.
Conclusion
The growing relevance of NDC in travel sector and airline industry underlines the multiple benefits of the efficient system for customers, travel management companies, travel managers, and online management platforms. NDC ensures a seamless travel experience by individualizing offers and providing rich content experiences to corporate travelers.
SaaS-based online travel management solutions like Paxes enable travel managers and TMCs to plug in multiple GDS options. They can easily access real-time airfares for a smooth booking experience. Its hybrid inventory engine supports regional LCCs, SOTO airlines.
NDC in Travel FAQs
What are the main benefits of the NDC for corporate travelers?
NDC allows corporate travelers to save their travel preferences, ensuring customized search results. It helps them compare airline products for an informed booking experience. Business travelers can access Low-Cost Carriers that may not feature in GDS.
What are the factors impacting NDC implementation?
NDC is an expensive feature which is not a mandatory prerequisite for airlines or OTAs. Besides, multiple levels and versions are impacting the implementation of New Distribution Capability.
What is the main advantage of NDC for airlines over legacy distribution channels?
Airlines can develop personalized products for individual customers and achieve product differentiation by sharing rich content.
What is the New Distribution Capability?
NDC or New Distribution Capability is a standard of IATA to enhance communication between airlines and travel buyers. It improves access to rich content and enables informed booking.
How many companies are implementing NDC in travel?
Over 245 companies, including airlines, travel aggregators, and IT providers, adopted NDC, according to 2021 data.
