The future of business travel booking and management arrived today. But there’s still plenty of room to question whether business travelers will use it, let alone prefer it over their current, free-lancing, do-it-yourself methods.
Four years ago TripActions a start-up tech firm in Palo Alto, Calif., switched its focus to creating a brand new tech-driven travel booking company unencumbered by 40 or 50 years of old industry approaches and huge sunken costs in old technology and processes. Today it unveiled a new travel shopping and booking method based on “New Distribution Capability,” or “NDC,” in partnership with United Airlines.
NDC is a set of new technical standards developed by airline industry’s global trade group, the International Air Transport Association, to provide the technology backbone necessary to create one-stop travel shopping opportunities for those tired of having to visit multiple airline, travel agency, hotel, rental car and even retain websites plan even a simple trip and to make multiple pricing and purchasing decisions instead of one all-encompassing decision.
The introduction of new NDC technology is, in some ways, analogous to the shift made in the late 2000s from conventional analogue television broadcasting to digital high definition TV. But, unlike the shift in broadcast TV delivery formats a decade ago, the shift to NDC travel shopping and booking technology is not, and won’t be mandated by government or industry rules. Airlines, online and storefront travel agencies, business travel management consultants, and other travel sellers will switch to NDC technology only when – or even if – they want to, based on how strong they perceive consumer demand for the new technology and capabilities to be over time.
TripActions is gambling that by becoming one of the first adopters of NDC booking technology that its already fast-growing business will shift into an even higher growth gear. Beginning today people working for corporations that use TripActions’ travel management services will be able see “bundled” fares for trips on United that will include not only the price of their seat but other services they’ve made know via their past travel purchases that they might want, like particular seat locations, inflight wi-fi service, upgrades to a higher class of services, particular inflight meals or beverages, and even hotel and/or ground transportation arrangements. All of that will be bundled into one all-in price and sold as one transaction in a fraction of the time it would take to make all of those arrangements individually.
Doing all that travel shopping and purchasing under the long-existing methodology would require travelers – or their travel agent or corporate travel manager – to make many inquiries and transactions over the internet (or phone) and complete transactions with each individual service provider one at a time. Even claiming or purchasing an upgrade on an airline requires two transactions: the initial purchase and then the purchase or claim for the upgrade.
But travel industry leaders think that switching to the new NDC methodology will make the travel shopping and purchasing experience so much easier and faster – and eliminate the need to make multiple calls and contacts with vendors when travel plans change – that travelers, especially busy business travelers, gladly will switch to the new approach. Skeptics, however, suggest that lots of travelers – particularly leisure travelers and small business people travel on very tight budgets – will resist making such a switch because they’ll perceive it as a way for airlines and other travel service providers to increase their revenue without drawing the attention and ire of travelers.
Those skeptics, in short, see NDC as a way for travel service providers to take back control of the pricing equation from thrifty travelers who are willing to put in the extra effort and time it takes to shop for the lowest prices in each travel category like flights, hotels and ground transportation. They also expect particularly price-focused travelers to continue making visits to multiple travel service providers’ websites to shop for and, eventually, buy services one-at-a-time rather than bundled. While shopping for and buying travel that way takes more time and effort, many travelers are likely to believe – maybe correctly – that piecing together a trip that way will net them the lowest total travel cost.
Not surprisingly, NDC backers are focused on time-crunched business travelers who are likely to give much greater value to the time the NDCV approach will save them when shopping for and booking travel – and in resolving the problems created by travel disruptions and changing schedules – than to the relatively small amount of money they could save by shopping for travel services in a piecemeal fashion. TripAction officials also see selling via the NDC platform as a way of keeping business travelers’ focused mentally and physically on their business itself rather than on the details of managing their travels.
“We think about corporate travel as a long journey to a face-to-face meeting,” said Ilan Twig, TripAction’s co-founder and chief technology officer, explaining why the NDC approach should appeal to time-crunched business travelers who don’t want the stress that accompanies making travel arrangements. “We see our job as trying to take the stress out of that long journey so that you are best during that face-to-face meeting.”
Shopping for and booking an entire trip the conventional way can take a business traveler, or their representative, an hour or more. “It takes 6 minutes to book a whole trip through TripActions,” he said. “Actually, a little less than that.”
Twig also says that adoption of the NDC approach to managing business travel through companies like TripAction will dramatically increase the number of company employees who regularly comply with their company’s stated travel policy. Half or more of corporate travelers currently don’t follow their company’s rules and policies for booking traveler for a variety of reasons, he noted. Their preferred airline, where they run up their frequent flier points, isn’t the company’s preferred airline. The schedule of the company’s preferred airline isn’t favorable. The company’s preferred hotel in a certain destination is quite distant from their client’s offices. Those and other excuses are used often to justify employees not complying with their company’s travel policy.
But AirTrip’s NDC approach could push compliance levels to 90% or higher, Twig says, because company travel policies will be built into NDC technology and because “machine learning” or artificial intelligence will anticipate individuals’ specific preferences and needs and provide all-in pricing options that meet those preferences and needs without going outside corporate policy.
Twig says TripActions has been able to move more quickly to launch services using the new NDC platform than most older, more established business travel management companies because it did not begin life as a travel-focused company and therefore was not encumbered by old ways of thinking about the technical details of booking travel. Instead, he said, TripAction was able to make decisions regarding NDC technology use without concerning itself with how the new technology and approach would fit in with the old approach and technology.
Over the next few months TripActions plans to add the flights and services of both American and Delta airlines to its NDC selling menu. Those carriers and United were central players in the development of a new online travel “store,” called the Next Generation Developed by ATPCO, introduced earlier this year by TripActions to give individual travelers access to some NDC-enabled bundled pricing options. ATPCO is a technology company jointly owned jointly by major airlines. It serves as the central distributor of all information about airlines’ routes, prices, flight times and seat availabilities and facilitates transactions between the various airlines and other travel service providers. Over time TripActions also expects other airlines, foreign and domestic, to make their offerings available via the NDC selling platform.