The corporate travel sector today is changing, but what are the key drivers of change across the business travel industry? The evolving role of the TMC and the potential changes and opportunities created by of IATA’s New Distribution Capability (NDC) are among the factors providing a major influence on decision making.
One of the biggest decisions a buyer has to make is whether to partner with a TMC, and like any big decision there are many different factors to consider. Once considered a central pillar of the industry, the role of the TMC has evolved as more and more clients move towards direct supplier negotiations.
TMCs have the knowledge, contacts and back office systems that can prove invaluable in assisting buyers with the management and planning of their programmes but may show disposition to certain suppliers and impose expensive transaction fees. Being confined to one provider also means there’s an inherent lack of choice and flexibility with the kinds of booking tools on offer.
Meanwhile, the industry is on the cusp of changes that will help facilitate greater transparency – but this may require buyers to “knit together” their travel programmes in ways they have not had to previously. For example, the buyer may need an agreement with several airlines, a TMC, a reporting company, an online booking tool, potentially a GDS … and others. While those separate relationships bring the transparency some buyers have been asking for, they are not as easy as having a centralised service offering via the TMC.
As these models evolve, do buyers still want transparency if it also means greater complexity, or are they happy to keep paying TMC transaction fees – even if those costs may need to change as the industry commercial models change?
NDC will change the airline distribution model, but what will this mean for the customer? NDC has promised to deliver a seamless booking experience for the customer by allowing airlines to provide an enhanced retail offering through indirect distribution channels. This means third parties like agents/TMCs have full access to all of an airline’s product, including ancillaries, and can book non ticket items in one transaction.
LEARN MORE on this important subject in our exclusive CAPA TV interview from a panel discussion recorded at CAPA-ACTE Global Summit & Corporate Lodging Forum, in Sydney, Australia in Dec-2018. It includes exper observations from Festive Road, AFTA, American Airlines, ATMC, Amadeus IT Pacific, Corporate Travel Management and IATA.