When a business traveler books an airline ticket, they often face a tradeoff between status and service.
Most business travelers have a preferred airline and enjoy status perks such as complimentary upgrades and loyalty incentives, which can only be accessed through the airline website or app. However, most business travelers are encouraged to book through their corporation’s online booking tool (OBT) or travel management company (TMC) for better duty of care, high-quality service and simplified reporting.
Today, the traveler’s chosen booking channel dictates the options they have on their trip. If the traveler books direct, they don’t get access to the VIP service their TMC provides, which is a pain point when a quarter of all business trips change prior to the day of travel. But if the traveler books through their OBT or TMC, they don’t have access to the same range of offers and loyalty perks that they get in the direct channel. Regardless of what issues may arise while they travel, they’re locked into the offerings of their chosen booking channel.
But why should the traveler have to make that tradeoff? What if they could have both status and service, no matter where they bought their ticket? Bridging the gap between the direct and indirect channels would ease friction for the traveler. In the future, the indirect channel needs access to travelers’ status benefits, and the direct channel needs to open up TMC servicing options.
Rich Content and Channel-Agnostic Service
NDC promises to deliver more robust content to travel agencies and TMCs. As NDC development continues to unfold, the industry aims to provide more status-oriented content and benefits to the indirect channel. As airlines, technology providers and TMCs invest in NDC implementations, greater content selections and loyalty options will become available to business travelers through their TMCs and OBTs.
As this development is underway, it’s also important to examine how to bring greater service options to the direct channel. Channel-agnostic service would enable TMCs to service all client tickets, regardless of purchase channel. Not only would this create more opportunities for TMCs to provide exceptional service, but it would also provide them with more comprehensive data for reporting and duty of care, enabling them to deliver greater value to their clients.
ARC is exploring ways to bridge the gap between the direct and indirect channels. To bring more content to the indirect channel, ARC is partnering with airlines, agencies and GDSs to implement NDC. ARC modernized its settlement platform in February 2018 to support a wide range of distribution strategies and relationships, and it is working with several airlines to bring NDC implementations online.
To provide greater servicing and transparency in the direct channel, ARC is working with TMCs, airlines and corporate travel managers to increase visibility and servicing options for direct airline bookings. ARC recently announced a partnership with, and investment in, Traxo to help corporate travel managers gain more visibility into bookings in the direct channel. ARC’s blockchain proof of concept with United Airlines, Blockskye and a top corporate client is examining how blockchain technology could facilitate faster and more transparent settlement and reporting for direct corporate bookings.
Ultimately, the goal is to create an omnichannel shopping, booking and servicing experience, providing consistently positive brand experiences for these high-value travelers.
Investing in the Traveler Experience
In B2C retailing environments, consumers can have it all: a sleek e-commerce platform, flexible payment options, customizable orders, and the ability to redeem their rewards however they choose. They have the same expectation when shopping for business travel, and today, the reality doesn’t match the expectation.
This mismatch is magnified by the fact that B2C platforms get a lot of external investment — so they often get flashy upgrades. Road warriors see those B2C platforms and expect the same sleek, seamless buying experiences from their business travel, but B2B processes are vastly more complicated. For a B2B marketplace, there’s far more work to do behind the scenes to create a sleek experience. It doesn’t make sense to put a nice-looking wrapper on antiquated infrastructure: It would be like disguising a 1993 station wagon as a sleek, high-end electric car. Road warriors don’t want the ‘93 station wagon experience, no matter how nice it looks. They expect the best: Functionality. Efficiency. Speed.
The travel industry is making progress in its effort to provide that modern experience corporate travelers expect. According to SITA’s 2018 Air Transport IT Insights, airlines spent $21.9 billion on IT in 2016, $24.8 billion in 2017 and a projected $30.6 billion in 2018. Those investments are paying off: According to J.D. Power, consumer satisfaction with airlines in the U.S. is at an all-time high. J.D. Power’s 2019 North America Airline Satisfaction Study puts the major U.S. airlines at 773 out of 1,000 — 11 points higher than 2018 and the eighth year of consecutive improvement.
According to Michael Taylor, Travel Intelligence Lead at J.D. Power, IT investment is a leading driver of this shift: “New technology investments have dramatically improved the reservation and check-in process. Fleets are newer and travelers generally feel that they are getting great value for their money."
TMCs are also investing in business technology. According to The Beat’s TMC NDC Adoption Barometer research study, sponsored by ARC, 83% of TMCs have invested in technology to book, manage and/or service NDC-based airline content. Airports are also investing significantly. The same 2018 SITA study cites airport IT spending as having risen from an estimated $7 billion in 2016 to $10 billion in 2018.
While we still have a long way to go, these investments demonstrate that the travel industry is committed to enhancing the traveler experience — and progress is fully underway. As new capabilities for omnichannel content and channel-agnostic servicing start to come online, the business traveler’s dilemma will dissipate: Today’s status versus service environment will transform to both status and service in every channel, creating even more seamless, positive experiences for high-value road warriors.