AMANDA GREENWOOD: The content challenge
Comments at recent industry conferences indicate that it’s only going to get more complicated when it comes to what air and hotel content is available in corporate travel channels.
While keen to still work on a “symbiotic relationship” with GDSs and TMCs, Willie Walsh, chief executive of IAG told members of the GTMC that the airline group “can’t put all fares on the GDS because we can’t justify the cost”. “A lot of transactions are simple, point to point and chosen on price…if the customer doesn’t need an intermediary we’ll provide relevant fares,” he added.
This is likely to mean cheaper fares for the airline’s own channels. Several airlines have already added surcharge fees to GDS bookings.
Hotel chains work a little differently. Some have taken the route of loyalty programme discounts or cheaper rates which in turn entice some travellers to book direct.
“Distribution is not new in hotels either. We need to understand how to meld the two together; .com is profitable but we need to fill hotels [by other means],” said Gus Vonderheide, VP of global sales – Americas for Hyatt Hotels at ITM Conference last month. “There are fragmented systems and too many moving parts so we need to understand how that looks moving forward. We’re not ready to jump in yet but distribution is an area of concern and opportunity. Dynamic pricing is still new for hotels too and we have to figure out how to create the best dynamic model too. Does that mean evergreen contracts? Dynamic, static or both?”
Buyers at both events stressed a need for parity and openness.
“Rate parity is important; there’s the online offering and then through the agency,” explained Leila Dunphy, travel manager of AerCap. “The traveller will find [the travel element] cheaper and we have to go through the explanation of why it’s different, so we need to educate the travellers and travel companies…but it’s a frustration.”
As content distribution gets more complex many buyers will look to rely on suppliers to solve the challenge through technology. Dunphy is not concerned about the detail in advances such as NDC but says “it’s your [TMC] responsibility to have the full offering and presented in all the formats said.”
Agreeing that travel companies have to take the lead, Mike Potter, travel services director at JTI (Japan Tobacco International) added “I’m positioned in procurement and it’s a challenge to explain NDC to others [in the team].” Hinting at difficulty with display he added that “fare families are not clear to the traveller”.
Perhaps there’s more onus than ever on selecting the right travel partner to navigate and oversee these fast-moving changes (as well as helping out when things go wrong).
This article was first published on Business Travel iQ.