Why the travel industry needs to embrace NDC together
At Amadeus, we think NDC has the potential to deliver new benefits for all players if implemented in a standard manner that truly takes the needs of all players into consideration.
NDC is today in a very different place than a few years ago. We believe that only now we can start talking about industrialization of NDC for three reasons: the maturity and stability of the standard has evolved, there is a critical mass of airlines making serious investments, and there is an increased awareness and engagement from the travel agency community.
For Amadeus, we see that industry collaboration is key to unlocking the potential of NDC. If the industry is to deliver new services, an improved travel experience for consumers, and greater efficiencies, then the entire travel industry needs to collaborate and NDC will become a success. This is why we are co-creating with travel seller customers like Flight Centre and working with several airlines to deliver innovative NDC-enabled solutions that deliver consistency, transparency and choice to the traveler.
Making the journey together
At Amadeus, we think NDC has the potential to deliver new benefits for all players if implemented in a standard manner that truly takes the needs of all players into consideration. Since its inception, we have been very active in the NDC standard. We were the first company to implement NDC v1.0 in production with United Airlines back in 2014 and are very active contributors in the IATA work streams. Since then, we have achieved dual IATA Level 3 NDC certification as an aggregator and an IT provider.
This is why Amadeus has created NDC-X, a dedicated program to drive the industrialization of NDC and ensure it is successful for all travel players. It will focus on practical use cases of IATA’s NDC standard, in a test and learn approach, in order to deliver improved capabilities for the industry. Including solving technology challenges of our airline customers in areas such as merchandizing, dynamic pricing and cloud servicing, which we see as an important foundation layer that will make NDC adoption more successful.
For NDC to truly take off, we need to create a real standard not only for the protocol itself, but also for the way it’s implemented. We also need to ensure that it responds to travel seller requirements, such as servicing needs. Of course, NDC needs to be supported by the right economics to drive investment and adoption.
This isn’t something that Amadeus can do on its own. The entire travel industry will need to work collaboratively if NDC is to deliver on the promise. We already know that airlines and travel agents rely on each other for revenues. Half of all flights sold worldwide are booked by a travel agent, and travel agency bookings generate an average of 34 percent more yield than airline direct bookings. By working closely together, the industry can unlock new value for travelers and corporations, and in so doing, generate more business for all players.
Another important aspect that will assist NDC to become a truly global standard is its adoption in China. Over the years, China has transformed into one of the world's most-watched travel markets with truly phenomenal growth. 2017 was the year when China became the world's largest travel market with 129 million outbound trips . What’s equally interesting is that the same year, the revenue from online travel agents (OTAs) in China hit 40.0 Billion RMB (5.8B USD), rising 34.0% from 2016 . In such a fast-paced environment, with large population of first time travelers that are buying travel products on mobile and online, NDC can really unlock many opportunities for both Airlines and Travel Agencies.
A travel platform now, for the future
As the industry moves to embrace new approaches to merchandizing and technology standards such as NDC, we must make sure we keep our ultimate customer, the traveler, in mind. They want the additional service levels that rich, personalized offers represent but they also want to compare and shop for those offers in the channel of their choosing.
As such, we are also evolving our travel platform to offer better value to our customers. It is a robust platform built on open systems, harnessing intelligent use of data and integrating new interfaces, front-end solutions and architectures. It brings together all relevant content – including air, hotel, car, and insurance – from any source (EDIFACT, NDC, APIs and other aggregated content) to be distributed via any channel or device, allowing comparisons and bookings to happen in a uniform and transparent way through Amadeus.
The first evolution of our platform is underway, with further updates being delivered on a regular basis. Airlines will be able to personalize and distribute their products and offers however they desire, be that using NDC, or existing standards. Thanks to our continuously evolving travel platform, travel sellers will have access to more content via more channels and devices, helping them to remain competitive whilst making it easier for them to sell travel in a more efficient and personalized way.
We are confident that our technology will allow all players to merchandize effectively and nimbly in all channels, and serve travelers simply, quickly and accurately – which is in the interest of all industry players.