I published a blog called The Big Story for 2023 last November on a corporate travel technology site that has a strategic partnership with Kesselrun.  I chose an image of a gorilla to attach to the article to signify how “big” of a topic airline content would become for corporate travel programs in the coming year and as a metaphor for the menace the resulting fragmentation would pose to the industry. 

The elephant in this post is simply an evolved gorilla, a menace that is no longer forecast to impact the industry next year; rather, sits next to us now.  

What’s Happening with Corporate Travel and Airline Content

Airline content and distribution strategy has always been a sticky industry subject that relies on two key factors – money and owning the customer.  A historically regulated industry brought both airline pricing parity and a level playing field with the Global Distribution System (GDS), which effectively commoditized travel suppliers and gave pricing leverage to corporate clients.  

By the time “web only” fares caused corporate travelers to complain that they “could find it cheaper online” versus the Travel Management Company’s (TMC) online booking system, a level of distrust between TMC/GDS/airline/client was sown, shrouded behind opaque airline distribution contracts with the GDS.  Put simply, travelers knew that they could see fares on suppliers’ websites that they couldn’t find through their TMC and corporate travel program, however given the fast, but sometimes uneven cadence of fare filing and supplier double-speak, it was difficult to prove and typically ignored.  That was 20 years ago, and client options were limited. 

Times Have Changed for Corporate Travel

New Distribution Capability (NDC) set the stage for a transparent change to airline content distribution.  The transparency in the change is what’s significant here.  Without the same specific faring and operational capabilities found in the GDS, NDC has provided airlines with the first steps to a fundamental economic reset and an approach to own the customer.  

The strategy and communications around these changes have been unabashed.  Unlike web fares from the old days, we can identify NDC fares.  We know they exist.  We know the technology limitations of legacy booking tools and that some don’t even show these fares.  We know that travelers can find cheaper fares for certain fare classes on supplier websites.  There is a growing acknowledgement that NDC is here to stay and little substantive clarity on how legacy systems will adapt or if they even can.  Of note, each airline is approaching NDC differently both in terms of use and accessibility in varying point of sale systems and the serviceability of reservations.  Corporate clients have largely found their travel programs flat-footed, trying to ensure a seamless traveler experience while struggling to interpret and establish operating procedures for these changes.

As a result, corporate clients and TMC’s are either trying to find workarounds or have adopted open-booking policies which enable travelers to book these fares directly on supplier websites. 

Meanwhile, some in the industry hold their breath and pray that this too shall pass.  Others have recognized the new reality of content distribution with quiet consternation, only to acquiesce and embrace NDC as a far-fetched competitive advantage.  Realists, entrepreneurs, and forward-thinking organizations are considering how and why NDC plays a role in corporate travel and how to leverage it. 

How Does Technology Support NDC

Technologies like CapTrav are front and center in this thinking and close to a billion dollars in new technology investment over the past 3 years among dozens of start-ups all take a slightly different approach to solve the same problem.  If we assume that the financial success found by airlines in support of NDC is a good indication that the airlines will double-down, then it’s probably a good bet that the industry will continue to see significant change in the way it does business as the naysayers fall by the wayside and new thinking/strategy takes over.

How KesselRun Can Help

While NDC poses a transparent move to disintermediate the GDS from the airlines, continuous pricing strategies may be an even smarter play for the airlines.  At KesselRun, we do not view NDC and continuous pricing as mutually exclusive strategies.  If cost control and brand loyalty is the goal, both NDC and continuous pricing are opposite sides of the same coin.  

At its very core, a supplier strategy that mitigates price comparison shopping is the essence of brand building.  Content fragmentation, shifting service, and cutting out the middleman may create confusion in the marketplace but these are traits that are proving to drive brand success.  For continuous sourcing, airlines can laud the benefits of expanding from 26 basic fare buckets available in the GDS to a potentially unlimited pool of faring options that the GDS cannot accommodate as a flexible solution for business travelers on the go.  But for the traveler or category owner, she must contend with constant fare changes coupled with trying to figure out where to find the fares initially. 

With fast-changing fare options, GDS companies seeking their own unique competitive advantage, and fast evolving technology that enables travelers access to both NDC and continuous pricing options, we’d expect even more from the airlines in the coming months and even more industry confusion.  Content strategy has been our number one priority over the past year as we help our clients think through the best path.

Content was the big story for 2023 and I think it will probably also be the big story for 2024. Contact the corporate travel consultants at KesselRun today.