What is the vision of the travel agent of the future? How will they work? Will it always stay the same? You can argue that agents should sell anything that generates revenue meaning that they should retail. Has NDC and Direct Connect improved the airline content for agents?
I hear very little feedback from the agency community whether the new technology is enabling agents to sell better and more. Traditionally agents sell through GDS and most of the technology used is GDS technology and the rest is often GDS centric.
I keep hearing that mid and back-office systems are not compatible with NDC and require efforts to retrofit. Whether this applies to the majority of agents or not is not easy to actually get any visibility on. There seems to be a culture of silence in the agency world and a reluctance to openly talk about the issues agents face.
Need of new processes
I don’t see any forums where technology is discussed much other than the discussions on whether to sell non GDS content or not and discussions on passive, ghost or miscellaneous segments used to “fit” the sale into the downstream systems.Is it really worth the effort? Maybe it’s time to rethink the business process? Should the PNR in the GDS define the business process? Would it be unimaginable that agents could sell any content the buyer wants to buy?
There are airlines who only allow own website sales saying that they don’t allow travel agents to sell their content. Wouldn’t it be possible with today’s technology for an agent to purchase on the airline website on behalf of the customer i.e. acting as the customer in the eyes of the airline? Would that be the modern agent, a proxy for the traveller? That would be a service that I would pay for.
These bookings would have to be exported/imported into duty of care but do we really need for the booking to go to mid and back-office? I would say no. Couldn’t the agent just charge a service fee or subscription service? More like a concierge service.
Is what’s needed an Order Management System or Orchestration?
In a world of connected retail don’t you just need a platform integrating APIs? I’d argue that you need an Order Management System to handle content. And if you book most content direct you would make changes and refunds directly with the selling provider.
There is a huge potential in selling retail for the agent. The margins for cross-selling are greater than for airline tickets not to mention the loyalty and trust the partnerships build. To sell ground transportation, rail, tours, experiences, the list is endless and the list is also endless of potential new business partnerships. And in addition, the agent can offer services of push notifications, insurance personalized services and much more.
Using an Order Management System also enables the agent to book any service let’s say a ticket to the world cup two years from now and then book additional products at a later stage.
The Travel Agency advantage
We hear of airlines talking about becoming retailers and selling through a marketplace, the latest being Air Asia. This is a step in the right direction for airlines as they need to diversify and find new revenue streams. The advantage the travel agent has that most airlines haven’t, is selling all airlines and content i.e. combining easyJet outbound with a Lufthansa flight inbound or an SNCF train with a Deutsche Bahn.
I welcome feedback and thoughts. I would love for the discussion to take off.
The biggest factor that that airlines have over rail or sea travel is that you can book a client on various different airlines and then give the client one single ticket plated on one carrier document. And travel agents can do that.
Airlines can only do that to a certain degree and do not have the full flexibility like travel agents using any GDS do.
Selling online on the airline website is fine if the travel is only a point to point journey and it is not a multi point travel. Airline content online is only available on their own flights and if they do feature other airlines it could only supply code share or partner airlines as airline websites only cross sell if there is something in it for themselves too.
Regarding PNRs being a thing of the past. If the PNR is to be made redundant then something else have to be put in place of the PNR to differentiate between different trips for the same client as regular flying clients sometimes buy almost identical tickets but for different dates and something has to be put in place to differentiate them.
Budget carriers have slowly started to try and do away with depending on agents to sell them and would much prefer to sell their products directly on their websites. however this would leave out the cash paying clients. Many countries do not allow their citizens to use their credit cards online to buy foreign registered airline tickets as this would involve shelling out hard currency from their reserves. So basically most airlines selling online on their website would lose out on cash paying clients and also lose clients who do not have prior knowledge of their products and so would hesitate to put their money down on something they are not sure about. And so having a third party like a travel agent vouching for them would make a big difference.
In short sure the present system is.not without faults and needs some serious looking into but there is a long way to go before we can revamp the entire system of booking through agents- using the GDS – having a PNR to differentiate between different itineraries.
WOW when I was hoping for feedback i am so impressed that I get so much so quickly. Thank you! Shows that there is passion out there. Here are my thoughts.
I think the PNR is here to stay for probably a long time but I don’t think that it can keep its dominance and control the whole process. I think e.g. that passive or miscellaneous segments are such a waste of time and money to feed downstream systems, this needs to change meaning that we need systems that can integrate any API content.
I fully agree that airlines mostly sell their own airline content BUT I think airlines are looking to diversify and try to position themselves as travel agents, take a look at some of the statements made by Air Asia how they want to become a market place and sell various content. Ryanair have also made similar statements becoming the Amazon of Travel. However, it will e a long time until they can reach that goal but again they will see benefits in becoming retailers and this business will grow when they understand how profitable it can be. They have already realized the impact of ancillary services , it is a natural step to expand the business.
As for revamping the whole system I think this has been a dilemma in travel for a log time, we always talk about changing the whole system which is not feasible and how other industries make change. You do it step by step and that can be baby steps. Perhaps a first step is to start integrating APIs and move away from GDC centric platforms?
And lastly financials, I agree that the travel agent has traditionally played an important role for payment in certain markets but I believe this will see many changes. There is no single area in travel that is moving so quickly as payments are, there are payment providers out there who can support local debit card and local market forms of payment in addition to traditional global payment. I am following tap payments for “digital” yuan in China closely, there is so much happening in this area and it is happening fast.
Hello,
I am trying to find all your positivity in the next scenery of our activity as travel agent that you have foresighted, but I can’t do it, sorry.
May be the reason is in my long term as travel agent, almost 40 years, and like the dying android in “Blade runner” I have seen and above all lived all the things that every time had shocked my business: wars, terrorism, global economic crisis, the arrival of the Internet as competitor and at last the global coronavirus outbreaks.
For now I think and hope to recover at least partially our daily business before it will be too late. That’s all.
Shouldn’t we welcome sites like this one, http://www.duffel.com?
Bye bye GDS!
Hi Petra, thank you for your comment.. Yes it is super interesting with the new types of aggregators that we see in the market, Duffel, Kyte, TPConnect and those who offer more of platforms like AirGateway, Atriis etc. There are quite a number of players out there and it must be challenging for the agent to figure out what best meets their needs. As for Duffel I have only seen one demo which hasn’t given me enough information. I don’t think Duffel can replace the GDS anytime soon and would see them rather as a helpful addition for the direct connects. If Duffel integrates easily, provides good content with full servicing capabilities and provides an added value to agents it is a step in the right direction for a seamless and frictionless API interaction. And yes we should welcome new technology and thinking differently.
Dear Elio, Thank you for your comment. I hear your pain, this is so unprecedented and like you say we have been through so much in this industry come to think iof it I thought after September 11th that it couldn’t possibly be any worse than what was happening to our industry. I never thought we would see a whole world shutting down.
I wish you all the best and for a recovery, I fully understand that your main focus is not and will not be for some time on technology change. 40 years of experience is remarkable and is priceless, that knowledge and expertise is still very valid. But it will take some time before you are able to address industry thought process change.
Despite aviation having the appearance of modern industry, it is still relaying on “old” tools, assumptions, regulations and bodies that benefits from the status quo
Some systems are regid and hard to change.
I can see a big opportunity for new companies with fresh ideas that could distribute the current model …. NDC was supposed to do this, before it was absorbed by current stakeholders who don’t want to change (and keep making money). I was hoping that Google will jump and change this … but so far not much change
One of the questions should be be do we need agents/agencies? With the proper settings and systems their role should change and be more on packages (vacations) and not direct flights/transports …and even that, with proper AI and IT applications this will change too
The change will arrive as I have seen small companies replacing big providers, who use modern tools and can quickly adapt to changes/clients requests … but again … have to comply to old standards/regulations and play with the big players
Who will the next Tesla or Apple for the aviation industry?
Thank you so much for your feedback. I LOVE your comment “who will be the next Tesla or Apple for the aviation industry” and yes couldn’t agree more. In general people dislike change and feel comfortable if things stay the same and one theory that I hear is that airlines have to be risk averse with regards to their operational business, safety is priority one. But the safety first should not hinder innovation in the commercials. I think the time has come where we have to move forward, when rail companies and banks have sexier applications it is time to step up. We need better innovation and digitalization of the industry. I am a firm believer that customers will drive development. I just listened to Qantas speaking at CAPA making a statement about their NDC development and it is refreshing to hear them say that it serves little purpose unless you offer good servicing and take away the focus from NDC or not NDC and focus on processes that work in a direct channel that is a win win. .
I do believe that we need agencies as that independent marketplace that can sell anything but do they have to look the same? Do they need to issue tickets? Report through BSP? Do they have to change the ticket? Maybe it could be more profitable become more of a concierge service in retail. If we have so many process issues in the agency airline relationship isn’t it time do change or decommission some of those processes? There are so many ways to present offers to customer virtually that can change the way we sell and service products. Start small, an unused ticket should become a digital voucher or go back into a travel bank/wallet. I truly hope that the impact of Covid will lead to improving business processes. Let’s hope we get to see an Apple or Tesla out there.
Hi Ann. This is such a fascinating topic to take on for your first column. In short, I expect the PNR is here to stay and that the evolution of distribution systems will continue to move at a glacial pace. The first inhibitor is that most airlines still fulfil based on paper ticket systems introduced decades ago. Even though paper tickets were replaced by e-tickets and more recently EMD’s introduced to fulfil ancillary services, the old concepts and limitations of books of tickets and coupons remain. Adapting to any new system will require gaining critical mass from airlines and their supporting systems at the same time and that’s not a simple or inexpensive proposition. Interlining is another huge inhibitor since it is not just about selling and fulfilling carrier services, but also reporting, accounting, adjusting, and closing sales.
I was thinking in terms on Amazon and one could compare their website being the equivalent of a GDS and super-PNR. You have access to multiple products though a single screen (GDS) and a single order could involve multiple vendors (super-PNR). Amazon also acts as the clearing house (BSP/ARC). Unlike airlines, however, product fulfillment happens immediately (instead of up to 356 days in the future), and the sale of product from one vendor is not dependant on another vendor (interlining). So while airlines certainly wish they could retail like Amazon, there are many differences and obstacles.
Having now retired from the industry, I have not kept up with initiatives like IATA NDC and One Order. Back when I was involved with designing Air Canada’s direct connect API in the early 2000’s, we actually developed a compatible back-office link to several travel agency accounting systems rather than expect them to develop a link to us. Even still, travel agents still recorded passive or ghost segments to their GDS PNR since it is their primary source of customer data.
Congratulations on your new assignment. No doubt many future discussions on this topic will ensue as we have only scratched the surface.
Thank you so much David for your kind words. I do agree with you that the PNR is here to stay for what is probably a long time but I do believe that the dependency on the PNR has to become less and less. It was interesting that you mention the ticket and e-ticket, I think one of the biggest mistakes the industry made back then was to take the paper format and turn them into electronic processes without looking for innovation. A ticket should be able to hold as many coupons as you like really and you should have allowed for a ticketless concept. Oh well it is easy to look back at the mistakes but the problem is that we tend to go down the same route and try to fit our old concepts into new like what happened with NDC.. I’d like to address the interline topic as we always hear that it is the main obstacle and what requires complex revenue accounting etc. Wouldn’t virtual interlining solve most of the challenges? If each airline receives its money right away and you make it look like a journey with one price to the customer this would solve many complexities. A bit like working with SPAs directly.
I like your analogy with Amazon but there is an important difference, Amazon do not rely on receiving 3rd party data to construct availability and fares. Also I would say that their payment process is more efficient.
I know I have only scratched the surface but rather than trying to fit everything into a GDS format maybe some baby steps can be taken to change some business processes. Imagine if the focus of NDC could be on content being aggregated by the agent but booked, modified, cancelled with the provider of the service directly. And like I said fed into duty of care and a charge for booking the service. This would also allow providers to choose their partners to work with and vice versa of course.