COGNIZANT that there will be consolidation in the travel agency market and that airline distribution is shifting inexorably to direct as a result of the pandemic, Sabre is nevertheless focused on powering travel agents through the recovery with new solutions, including its new airline storefront unveiled last week.
Claiming it as an industry-first capability that makes it easier to comparison-shop increasingly complex airline offers in the indirect channel Todd Arthur, vice president, Asia Pacific, Travel Solutions Agency Sales, said, “We know that there will be some consolidation in the market as a result of the pandemic.
“However, we are finding that while our travel partners across all sectors have inevitably been impacted by Covid, they are planning for the future, and talking to us about how they can use our technological innovations to come out the other side of the pandemic in a position of strength.”
Available via Sabre’s shopping APIs, the storefront provides digital “shelves” that organise an airline’s offering in a side-by-side display. For airlines, the storefront supports differentiation and more merchandising opportunities in the indirect channel, with flight search results displaying several product offerings for an individual flight. For travel buyers, it allows for efficient comparison shopping across several flight options and helps travellers choose the right offer.
“Airlines have invested in differentiating their brand in a number of ways. While this creates greater choice for travellers, it also presents a challenge – it’s easy to understand the cost, but harder to understand what the experience will be,” said Wade Jones, chief product officer for Sabre Travel Solutions. “Sabre’s new airline storefront not only empowers airlines to effectively market their unique product in the indirect channel, it also helps travel buyers communicate the total offer value.”
The pandemic has radically changed customer behaviour in overall e-commerce, pushing them as well as retailers online. Airlines have been moving towards more direct channels in previous years, a trend that will certainly be accelerated by Covid. Some airlines, like Lufthansa, have introduced Distribution Cost Charges for agents booking through indirect channels.
A Phocuswire report this week shared findings from a survey, conducted by Atmosphere Research Group for Accelya. More than half of airline respondents interviewed for the report Airlines: A Path Back to Profitability, agree the crisis has created opportunities for “positive transformation of process and technology” and that in the next five years it will change both how the airline does business and the behaviors and expectations of passengers.
When asked about their distribution strategies, airline executives say they expect B2C digital direct channels, such as their brand’s website and app, to grow from current share of 40% to 47% by 2023. During the same period, respondents say they expect GDS channels to drop from the current level of 42% of share to 31%, while the scope of what the report calls “direct connect/GDS bypass tech aggregators” – is expected to grow from 4% to 9%.
The report states: “…The GDSs need to understand that if they aren’t more accommodating at working with airlines on NDC distribution commercial terms, they risk aggravating their distribution problems… The growing universe of NDC-based aggregators, such as Travelfusion, Duffel and Peakwork, enables airlines to sell their products through their third-party partners in a cost-effective, retailing-centric manner.”
Todd Arthur
Asked if this will be an accelerated trend going forward as airlines seek to incentivise direct booking behaviour, Arthur (pictured right) said, “Airlines are looking at a distribution mix rather than just at direct or indirect and they want to ensure they are distributing personalised offers to travellers no matter which channel they are using.
“Our recent announcement that we are distributing Qantas NDC content to our travel agency partners through our global travel marketplace our rolling out of Singapore Airlines NDC content to more markets, as well as the introduction of our new airline storefront are all important milestones in our journey towards our goal of creating a truly personalised marketplace for the travel industry.”
Through an API pilot programme to test the new airline storefront capabilities Sabre has partnered with multiple agencies including Fareportal, the travel technology company powering CheapOair.com and OneTravel.com and Espressamente Viaggi, part of TravelMatic, a leading travel technology company and consolidator network in Italy. Initial pilot results demonstrate the ability of the new airline storefront to deliver a broader set of upsell opportunities with more transparency into each fare.
With the recovery expected to happen online first, how should travel agents capitalise on this trend to capture the first of the rebound? Arthur said, “There’s no doubt that there is a high pent-up demand for travel, and many travellers will turn to online agents to make their first booking. However, whether online or offline, travel agents have the opportunity to position themselves as true travel experts for their customers.
“That expertise will be more important than ever to travellers who will have additional questions, needs and wants as a result of the pandemic, and that’s where new airline storefront can help travel agents of all sizes and types to ensure they have the right information at their fingertips to present the most relevant offers to travellers based on what value means to them. We’ve already had feedback from customers that new airline storefront significantly saves training and searching time, making it a valuable tool as they look to improve both efficiency and service as we look to recovery.
“New airline storefront is available now through Sabre’s APIs and will be available during Q2 through the Sabre Red 360 workflow so offline agents will also be able to ride on this accelerated change to build on the expertise they are able to pass on to travellers.”
• All images credit: Sabre
