Insights, challenges, and opportunities
On 4th May 2023, Team TPConnects presented their thoughts on “Demystifying NDC for Travel Agents” at the Arabian Travel Market in Dubai. In their engaging and informative presentation, our CEO – Rakshit Desai, and VP-Sales George Rajan, shared their decade-long journey in implementing New Distribution Capability (NDC) and discussed key insights, challenges, and opportunities related to NDC adoption. Here is a brief summary of the important points highlighted by Rakshit and George during their presentation.
The importance of NDC:
Rakshit emphasized the significance of NDC, which has transitioned from a theoretical concept to a real and present force in the travel industry. The adoption and penetration of NDC are on the rise, with millions of seats distributed through NDC-assisted technology. Notably, IATA reported that 10% of travel agency sales are already attributed to NDC, representing a substantial shift in the industry.
Why is NDC important to travel agents? Interesting insights obtained from a live quiz
To personalize the conversation, George Rajan initiated a small quiz for the attendees. Participants were asked to scan a QR code and respond to the question: “Why is NDC important to you?” The multiple-choice options included cost/process efficiency, personalization, ancillary income, and all of the above. The quiz results indicated that cost/process efficiency was the primary interest for most attendees, followed by ancillary income and personalization.
Insights, challenges and opportunities of NDC
- Insights: Rakshit shared key insights derived from TPConnects’ experience in the NDC journey. The rising adoption and penetration of NDC suggest its permanence in the industry. Furthermore, airlines recognize the value creation potential of NDC, with McKinsey estimating a $15 billion opportunity for airlines, primarily driven by revenue generation, including ancillary revenue
- Challenges: Acknowledging the complexity of the NDC ecosystem, Rakshit highlighted the challenges faced by airlines, sellers (travel agencies), and technology providers. Airlines have different objectives and commitment levels towards NDC, while sellers have diverse requirements based on their business models. Technology providers like TPConnects navigate the complex landscape to make NDC technology more approachable and accessible.
- Opportunities: George Rajan, our VP of Sales, emphasized the significant investment and prioritization decisions that lie ahead. Despite the unclear business case for NDC adoption, the potential cost savings and revenue opportunities make it compelling for airlines. Millions of seats will be distributed through NDC-assisted technology in the next few years, presenting significant growth potential for industry stakeholders.
Friction and standardization challenges
To address the challenges, Rakshit emphasized the importance of standardization. While NDC aims to provide flexibility and customization, standardization is necessary to ensure seamless integration and interoperability among various stakeholders. TPConnects actively participates in industry forums and initiatives to contribute to the development of common standards and best practices.
Benefits of NDC adoption
Rakshit and George emphasized the benefits of NDC adoption for both airlines and travel agents. For airlines, NDC enables direct distribution, allowing them to gain better control over their product offerings and pricing. It also opens doors for personalized ancillary offerings, driving additional revenue streams. Travel agents, on the other hand, can leverage NDC to access richer and more diverse content, offer personalized travel experiences to their customers, and earn increased commissions through ancillary sales.
In summary, TPConnects’ CEO Rakshit Desai and VP Sales George Rajan shed light on the significance of NDC adoption for travel agents, airlines, and technology providers. They provided insights, highlighted the challenges and opportunities, and showcased TPConnects’ NDC solutions that address the industry’s needs. By demystifying NDC, TPConnects aims to empower travel agents to embrace this technology and unlock its potential for enhanced customer experiences and increased revenues.
