Author: Adrian Roodt, Travelport, country manager for Southern Africa
2019 has been an amazing year for travel technology, from big data and experience-led design to NDC (New Distribution Capability) and content retailing. There have been a range of new concepts and exciting steps pushing us forward into the next era of travel, which has left me with a lot to think about as we near the end of the year.
Drive the experience economy, before it drives you
While the experience economy is not new, its impact on the US$9 trn global travel and tourism sector has never been greater. The Experience Economy is being driven by two converging trends: escalating demand for memorable and personalised experiences, and rapid advances in technology. Today, global expenditure on experiences is already greater than on goods and services, and demand transcends generations. Technology holds the key to unlocking the significant potential here for the travel industry. And every day, new advances are presenting new opportunities to deliver new value.
Examples of how the experience economy is shaping the travel and tourism industry today are everywhere. Singapore Tourism Board has created a simulation that allows travellers in transit at Changi Airport to take a seat on a traditional trishaw, put on a VR headset and go on a virtual tour of Singapore – complete with 4D elements like smell and mist – all without leaving the airport. Which allows travellers to dine with locals in their homes in countries like Kenya. And Airbnb Experiences lets tourists book and experience everything from whale watching in Hermanus to playing football with locals in Hanoi. The experience economy is very much here to stay, and the opportunities for those who drive it are endless. But so too are the challenges for companies that fail to respond and evolve.
NDC picking up pace
It may feel like IATA’s New Distribution Capability (NDC) is taking a long time to arrive but progress is starting to gather momentum. We expect 2020 to be a year where more of the technical plumbing is completed, when more airlines outline their ambitions and make content available, and when more NDC technical solutions from companies like Travelport enter the marketplace. We also expect it to be a year when agents start playing a more active role in shaping NDC decisions, as more start to determine how new NDC sales capabilities can be used to benefit their customers.
Interestingly, a common question industry audiences ask is what the biggest misconception surrounding NDC is. And in response, more than a few of our airline and agency customers have pointed to the idea that NDC is a means of bypassing the GDS. To the contrary, they argued travel commerce platforms will play a critical role in ensuring value is unlocked for all parties. It won’t surprise you to hear that I agree.
But it’s not all about NDC
NDC might dominate the headlines, but there is also a lot going on in the content retailing world, especially when it comes to aviation. Air content, for example, is getting more dynamic – dynamically sourced, dynamically bundled and dynamically priced. Merchandising is moving from an art to a science, thanks to big data. Automation is allowing products to be personalised more than they ever have been before. Even subscription-based models are being investigated and tested.
Airlines are also now considering how every seat on the aircraft has a different value and can be part of different bundles. When you add in offers for corporates, loyalty and personalisation, there are potentially hundreds of products on every flight. This has the potential to be overwhelming for customers, but airlines know this too. Delta Airlines has already initiated a concept called Next-Generation Storefront to cut through the complexity in competing products and sell on value not price. As a travel commerce platform, we need to respond to all of this to ensure we continue to support all parties, no matter which model they decide is best for them.
To conclude…
The pace of change today is both frightening and exciting. Standing still is not an option, especially for companies like Travelport that sit at the heart of the travel ecosystem and need to support all partners, no matter how big or small, how innovative or conservative. Times of great change require great agility, and I for one am glad to be on the edge of a new year in my new role at Travelport and with ambitious new owners and an ambitious new CEO who all recognise this.
