New research American Express GBT and ACTE has found that, despite the promise of an established distribution standard and personalized options for travelers, a majority of travel managers are confused and concerned about the impact of the New Distribution Capability (NDC) on their travel programs.
The study, developed by ACTE Global (Association of Corporate Travel Executives) in collaboration with American Express Global Business Travel (GBT), found that only 19 percent of travel managers are fully confident in their understanding of NDC. Additionally, nine out of 10 travel managers fear NDC will increase costs, reduce fare and data transparency and negatively impact policy compliance.
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The study, The Evolution of Air Distribution, explores travel managers’ experiences and attitudes toward changes in air distribution, including NDC – a technology program developed to standardize API (application programming interface) distribution. Travel managers expect some benefit from NDC, with 64 percent saying it could improve the booking experience and 56 percent believing it could help contract negotiations with airlines. However, the majority of travel managers fear that fragmentation created by NDC could threaten cost control (89%), policy compliance (87%) and duty of care (77%).
Fragmentation is already occurring because of airline ancillary purchasing, according to the report, with almost half of travel managers (49%) saying travelers buy out-of-policy ancillaries from airline websites “some of the time.” This leakage from corporate online booking tools (OBTs) is a direct consequence of airlines unbundling fares into paid-for components such as baggage fees and seat selection, hindering the traveler booking experience and preventing travel managers from gaining full visibility on air spend.
Knowledge Gap May Be Driving Concerns and Resistance to Change
Although NDC has been widely discussed since the International Air Transport Association (IATA) introduced the concept, uncertainty about what exactly it is remains pervasive. Almost a quarter (23%) of travel managers say they are “not at all” confident in their understanding of NDC and what it means for their programs, and a further 58 percent say they are only “somewhat” confident in their understanding. As a result, few travel managers are ready to incorporate NDC-enabled tools into their travel programs, with 63 percent saying they are not exploring any new platforms beyond their OBT at this time.
Travel Managers Worry That NDC Will Undermine Their Program
Travel managers remain wary of NDC and fear that it may impinge upon key pillars of travel programs, according to the study. Top concerns about incorporating NDC-enabled content into existing policies include: reduced functionality of the OBT (90% of travel managers expressing concerns); unbundling leading to higher costs (89%); lack of availability of data (88%); and reduced fare transparency (88%). Travel managers are also concerned that NDC will negatively impact policy compliance (87%).