Travel agents

Phocuswright 2018: Agents and consumers suffer impact of increasing air fare complexity

Posted by Lee Hayhurst on
Phocuswright 2018: Agents and consumers suffer impact of increasing air fare complexity

New ways of distributing airfares are making buying and selling flights more complex for retailers and travellers and even slowing down aircraft boarding times.

Speaking in a panel session on the impact of Iata’s new NDC standard at this week’s Phocuswright conference in Los Angeles, Simon Ferguson, the recently appointed Travelport managing director for agency commerce in the Americas called for collaboration between the airlines and distributors to make the experience of the end traveller frictionless.

He said the proliferation of fares and ancillaries now on offer is “adding huge amounts of time and complexity to travel sellers trying to cope with all the different options”.

“We understand why they are there but we hear some incredible stories of the amount of time travel sellers are taking to explain to the consumer the different options. The traveller does not care where they come from all they want is frictionless travel. The complexity of airline product is quite mesmerising and we all feel the impact of that. Even the amount of time it takes to board an aircraft has gone up 50% because of all the baggage rules. If you make the product more complex it can have an impact on the basic experience.”

United Airlines director of distribution Tye Radcliffe said its baggage rules have had a positive impact and added NDC has given sellers the tools to do “cool things” in terms of creating bundled offers tailored to the individual traveller.

But he said the airline requires the agent “to make it visible and clear to the consumer”. “We are working with all corporate booking tools to make that happen. I think it simplifies the job of the agent when I’m bringing the fare that the consumer wants right to them.”

Jim Davidson, president and chief executive of Farelogix, the technology firm that created the NDC standard and this week was sold to GDS Sabre, likened NDC to a river that was a flow of content. He said in the past entities involved in distribution have created technologies to damn the river.

“There’s enough technology out there. This is about re-establishing the relationship between the airline and the traveller. That includes on the corporate booking platform. That’s one of the challenges we have had.

“You can only damn the river so much with the proliferation of this technology and if you damn it too long they will find a way to go around the damn.

“Everyone is aligned, understanding that here is what we want to do. Everyone will have technology in place to make it happen. I think the days of the damn bring in place are gone.”

Frederic Lalonde, chief executive and founder of Hopper, a disruptive new app that enables travellers to shop for the best fare using artificial intelligence and predictive analytics about how prices change over time, said mobile is changing everything.

He said there remains too much focus on converting the customer immediately in the traditional screen display world and that as everything shifts further to mobile this will actually facilitate agents having a longer conversation with the client, slowing things down and taking them through the options.

Lalonde said the firm is seeing 70% take up rates of NDC offers it sends to its users, 25% attachment rate of ancillaries like baggage and 15% conversion rate on offers of cabin upgrades from economy to premium economy or premium economy to business.

“Display conversion is a little bit dated,” he said. “If you are thinking about the mobile world you can have. Conversation where you opt users in to these things. NDC will enable all the [distribution] pipes, all the channels in a way we cannot imagine right now.”

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