During a June Business Travel Executive Town Hall conducted via LinkedIn Audio, three veteran travel managers – Richard Clowes, Director of Travel Operations at SAS, Dorian Stonie, Senior Director of Global Travel at Salesforce, and Anna Kershaw, UCB Pharmaceuticals Senior Manager for Global Sourcing – offered lessons learned from the episode.
Despite American Airlines’ decision not to go forward – for now – with channel-based prohibitions on loyalty program accruals and more content differentiation favoring newer distribution protocols, NDC is happening.
"But let's do it right," said Richard Clowes. His organization, SAS, is a $3 billion tech company that runs an ARC-accredited Corporate Travel Department for its US travel, with the global distribution system at the center as the "source of truth." However, NDC "forced us to reevaluate," Clowes said. This year, the company began piloting Spotnana, which promises to reinvent travel management infrastructure and handle NDC bookings better than legacy platforms.
"That American has rescinded their approach is not going to alter the path that we're looking into going down," Clowes said. He pointed to growing portions of NDC-based sales at Emirates, Lufthansa, Qantas and Singapore.
Solutions in Sync
The Salesforce travel team has had an omnichannel orientation for years. In 2023, the company piloted offline access to AA's NDC fares with American Express Global Business Travel. By October, it had moved all offline AA bookings to NDC. In November, the company began installing the newest version of the SAP Concur Travel tool for online bookings. According to Dorian Stonie, that was a "foundation" for bringing NDC into the program. "We are now on the cusp of getting NDC turned on for all of our American content here in the US," he said.
When UCB Pharmaceuticals conducted its most recent RFP for TMC services and booking tech, it was important to consider how the expected experience for travelers would mesh with their encounters on airline websites.
"We are trying to make sure it doesn't look completely different," said Anna Kershaw. "We don't want to lose anybody else. We need that duty of care." The $5.7 billion Brussels-based company operating in nearly 40 global markets also wanted a tool that helps travelers compare the carbon output of itinerary options.
Kershaw found that the RFP was more in-depth, took more time and involved more players than previous TMC/booking tech sourcing projects. "We had to involve our IT department very early," she said. "We really needed a solution to get everybody on the same system, including our agents. Our current TMC did propose a solution to that."
Kershaw didn't identify the winning bidder for the company's transient business but shared her view that newer, smaller agencies moved more quickly than large legacy TMCs in incorporating NDC. She learned that some TMCs had separate online booking fees for NDC while others did not differentiate. Travel arrangers, about 100 of whom helped UCB make the selection after three vendor demos, appreciate simplified fee structures, according to Kershaw.
NDC: A Two-way Street
Airline pricing, though, is becoming more complicated as carriers apply NDC capabilities, including real-time personalized offers.
All three speakers urged peers to keep an open mind. They overcame initial skepticism and saw airline continuous pricing – used by United Airlines and some non-US carriers – as a positive for travel programs.
"I figured NDC would just allow airlines to increase the fares, but I learned that it really can work both ways, and it's to a company's advantage to capture the NDC rates," Kershaw said. "If a competitor is lowering their fares, then an airline can adjust their fares much easier than through the EDIFACT GDS. That's an advantage that I think a lot of us may have missed as travel managers."
Salesforce watches live booking data. According to Stonie, it calculated a 5 percent to 8 percent savings – equating to perhaps $1 million last year – by using continuously priced fares. "That helped provide a business justification for accelerating our integration of NDC," he said.
Bundles are another content flavor airlines want to promulgate through direct and NDC-enabled channels. Clowes said he was "a bit concerned" that bundles would include components that many flyers already get via loyalty program status. Salesforce wasn't using bundles, but Stonie saw opportunities beyond club passes, seat assignments and inflight WiFi. He suggested a bundle with a status accelerator on a given route to shift share.
Calmer Skies Ahead
Yes, corporates can shift share – another lesson learned – but that depends on program and policy variables, traveler compliance, company culture and travel patterns.
For UCB, a Oneworld alliance deal maintained AA's contractual benefits this year. It did not ask employees to book away from AA, but took other measures, according to Kershaw. It signed a new agreement with Southwest Airlines, highlighted Delta as "most preferred" in Concur Travel booking displays and got many travelers with status on AA to enroll in Delta's loyalty program by providing status there, too.
"That moved business away from AA," she said. "We will have to be very reflective when our ’24 contract expires with them. We don’t want to exclude American if they have important routes."
SAS also did not take a negative stance toward AA. "Everyone on my team had a sour taste in their mouth about American, though, and that certainly was an influencer with decisions about booking," Clowes said. "The whole angle that American was betting on, that the travelers are going to make the decision regardless – and it doesn't matter what a travel manager says and does – I dispute that. But there is some truth to it at the same time."
Employees won't always favor company interests over their own, and "OBTs are very limited with functionality around being able to hide and show. We can demote them, but is that all we can really do? Shouldn't we be able to do more?"
Stonie said migration from AA happened naturally as the airline "lost traction and momentum" in corporate travel, opening the door for competitors to entice travelers. "That's an area that they're going to have to focus on rebuilding, at the corporate level as well as our traveler base," he said.
To stop and reverse the share shift, the three buyers saw lessons for AA that should be instructive for all airlines. For starters, account management is critical – and not just for everyday waivers and favors. Losing it brought future development and innovation to a standstill, according to Stonie. "We have our account manager back, and we have re-initiated these discussions, but not to the degree we had a year or two ago."
Kershaw emphasized the importance of special support desks for corporate agencies. Robust soft-dollar programs also would help AA win back business customers. Everyone appreciates seat and status upgrades.
Clowes and Stonie said they expected a calmer industry as AA re-engages the corporate community and more TMCs and intermediaries improve NDC connectivity.
"We will move towards better with NDC, so embrace it, move forward and just be patient for the next year," Clowes said. "I think we'll all forget about this."
"There's a world of other opportunities in front of us," added Stonie. He mentioned artificial intelligence in travel programs, blockchain, new industry KPIs and better connections between travel, expense, HR and CRM systems. "Hopefully," he said, "we get through the next 12 to 18 months, and then we can move on to bigger and better things."
Visit businesstravelexecutive.com to listen to this complete LinkedIn Audio session and find details about the next BTE Town Hall.
