Navigating NDC Fares For Tour Operators
As if the travel industry wasn’t already complicated enough, multi-day tour operators are now faced with the task of navigating New Distribution Capability (NDC) fares. While not new, NDC technology has recently become a hot point of conversation for travel professionals, as it is not only transforming the way airlines distribute their products but also has a great impact on multi-day tour operators. Navigating NDC fares for tour operators is quickly becoming a have-to, not a want-to.
Let’s start with the basics…NDC is a set of standards developed by the International Air Transport Association (IATA) to modernize and enhance the airline distribution landscape. It enables airlines to provide richer, more detailed content to travel agents and other distribution partners like tour operators. NDC fares go beyond traditional fare classes, offering a more granular and personalized view of available products and services.
Softrip customer Vacation Express has been experiencing the effects of NDC fares in their own business over the past year. The Atlanta-based tour operator company had to quickly adjust their business with the advent of NDC fares. Gantt Cookson, VP of Operations at Vacation Express had this to say: “The biggest thing for us was staying competitive. Passengers are willing to put up with extra steps to save money, and with NDC fares the difference in price can be significant.”
Though this caused some initial work, because Vacation Express uses Softrip, they were able to work out a solution. Together with the Softrip team, Cookson and the rest of the team were able to develop a solution that helped them adjust to these new updates. When American Airlines announced that they were moving fares that you used to be able to sell normally through these GDS systems, Amadeus and Sabre, they were moving to this new technology of NDC. In just a few weeks after the announcement, approximately 25 percent of the fares that they used to be able to book – and some of these were the cheapest, best fares- were no longer bookable. Together, Vacation Express and Softrip had to develop the technology into the NDC to maintain competitive fares.
Displaying and Booking NDC fares into PNRs was just the first step. There are challenges around PNR changes, ticketing, and schedule changes that must be sorted due to airline restrictions and the readiness of the GDS capabilities. Vacation Express also had to identify how to educate the customer about the fare. So additional content in the fare/booking display as well as customer documentation had to be considered.
Vacation Express uses NDC fares for United Airlines and American Airlines but recognizes that each airline will have its own system and process for NDC tickets. So NDC has an impact on both a carrier and their specific destinations. Since they use a comprehensive travel booking solution with Softrip, adding NDC fares for tour operators using other airlines will be a simpler process. Cookson went on to say, “now that we’re over the big hurdle, I think we can tweak whatever we need for any individual airline.”
NDC Fares: Benefits For Tour Operators
For multi-day tour operators that offer air, NDC fares can be a double-edged sword. While they certainly can complicate matters for both operators and passengers, they exist for a reason. Understanding the effects that NDC fares can have on tour operations is important to adjusting to this new standard.
First, a look at some of the benefits:
Granular Fare Information: NDC fares provide tour operators with access to more detailed and granular information about airline products. Instead of traditional fare classes, NDC enables operators to access data on specific amenities, seat features, and ancillary services.
Enhanced Customization Options: NDC technology opens up a new realm of possibilities for tour operators when customizing travel packages. The ability to access rich content allows operators to offer personalized choices for flights, accommodations, and additional services.
Efficient Booking Processes: NDC streamlines the booking process by providing real-time information and the ability to book flights and services seamlessly. The traditional challenges associated with navigating through multiple fare classes and restrictions are minimized, leading to a more efficient and user-friendly experience for both tour operators and their clients.
Direct Connectivity with Airlines: NDC allows tour operators to establish direct connections with airlines, bypassing the limitations of traditional distribution channels. This direct connectivity facilitates smoother communication and collaboration between operators and airlines, leading to faster response times, better coordination, and the potential for negotiated deals.
Competitive Advantage in the Market: Embracing NDC fares provides tour operators with a significant competitive advantage in the market. Those who adopt this technology are better positioned to offer superior and more personalized services compared to competitors who rely on traditional distribution methods.
NDC Fares: Challenges For Tour Operators
While New Distribution Capability (NDC) fares offer numerous advantages for the travel industry, there are also challenges and concerns that some tour operators may have, leading to reservations or reluctance to fully embrace this technology. Here are some reasons why tour operators might be hesitant or cautious about NDC fares:
Integration Complexity: Implementing NDC technology may require significant changes to existing booking and management systems. Tour operators may find the integration process complex and time-consuming, especially if their current systems are not compatible with NDC standards. The initial investment in technology upgrades and staff training can be a barrier for some operators.
Costs and Resources: Adopting NDC may involve substantial costs related to technology upgrades, staff training, and ongoing maintenance. Smaller tour operators with limited financial resources may be concerned about the affordability of implementing NDC, especially if the return on investment is not immediately apparent.
Dependency on Airlines: NDC introduces a more direct relationship between tour operators and airlines, but this also means a higher level of dependency on airlines for content and updates. Operators may be concerned about relying on airlines for accurate and timely information, and any disruptions in the relationship with airlines could impact the availability of data and services.
Transition Period Challenges: Moving from traditional distribution channels to NDC may involve a transition period where both systems need to coexist. This dual operation can be challenging and may lead to operational inefficiencies and potential confusion for staff. Operators may be hesitant to navigate this transitional phase.
Lack of Standardization: The travel industry has experienced challenges related to the lack of standardization across different NDC implementations. Inconsistent standards can make it difficult for tour operators to seamlessly integrate with multiple airlines, leading to additional complexities and potential inefficiencies in managing diverse NDC systems.
Data Security and Privacy Concerns: With the increased use of technology and data sharing, tour operators may have concerns about data security and privacy. NDC involves the exchange of detailed customer information, and operators may need reassurance regarding the secure handling of sensitive data in compliance with privacy regulations.
Limited Content for Smaller Airlines: While major airlines may offer extensive content through NDC, smaller airlines might not have the same capabilities. This limitation could restrict the range of options available to tour operators, particularly if they work with a diverse portfolio of carriers.
Resistance to Change: Resistance to change is a common factor in any industry. Some tour operators may be accustomed to traditional distribution methods and may be hesitant to embrace a new technological paradigm, fearing disruptions to their established workflows and business processes.
While NDC fares for multi-day tour operators might (understandably) bring about mixed feelings, there’s no getting around the inevitable. NDC fares are quickly going to become standard for all airlines, and if tour operators offer air with their travel packages, this is something that won’t be going away. The smart thing to do is learn the best ways to deal with the changes that NDC fares might bring to the travel business, at the industry level and the individual operator level.
One certain thing about the travel industry is that change is going to happen. As NDC fares for tour operators become industry standard for those offering air, it will be more important than ever to have a software solution that can integrate and adjust to help manage.
