Corporate travel content distribution is evolving at an accelerating pace. The industry hasn’t seen this pace of change since online travel booking started to take off in the late nineties. Air, hotel, and car distribution are all changing, but in this blog post I’d like to address the significant changes in air distribution, particularly the adoption of IATA’s New Distribution Capability (NDC).
- SAP Concur wants to ensure that our customers can access all the relevant travel content, regardless of booking channel.
- Concur Travel customers rely on their TMC (travel management company), and most prefer to wait for NDC to be available via the GDS (Global Distribution System).
- For customers who want NDC content prior to it being fully available in the GDS, SAP Concur has been piloting with early adopter TMCs and customers to leverage our existing Select Access infrastructure to deliver content from Lufthansa Group and British Airways. These pilots are close to completion and pilots with American Airlines and United Airlines are in the queue.
- Business Travel Direct, a UK-based TMC, is now providing multiple corporate clients with access to British Airways' NDC through Concur Travel. Travel & Transport Stateman, another UK-based TMC partner, also has been testing BA NDC successfully.
- The Concur Travel Select Access feature has allowed travel managers to enable content for more than 100 airlines and hotels for the past 15 years by updating their configuration settings in Concur Travel and leveraging our TravelFusion integration.
SAP Concur’s position on NDC (New Distribution Capability)
SAP Concur has always led the industry in offering relevant business travel content to our customers, regardless of the source of that content. Recently, some large airlines have been positioning NDC as their preferred connection source and have been adding GDS surcharges, removing some fares from the GDS, or making additional content only available via NDC. Customers have been telling us that they want to avoid any surcharges and/or access the additional content offered by Lufthansa, British Airways, American Airlines, and United Airlines. As a result, we have been working on ensuring that customers can obtain that content and view the bookings through both the Concur Travel online booking tool.
Concur Travel customers rely on TMCs to service their programs, including booking support, keeping track of unused tickets, providing management reports, and a variety of other functions. The TMCs have told us that their ideal solution is one where they can handle these NDC bookings in the same way that they handle their other travel bookings – namely via the GDS.
We are in constant communication with the GDS to understand their progress on making NDC content widely available at scale and ensure that the needs of corporate customers can be met. Given the complexities involved, it is becoming apparent that the GDS will not have the robust solution, with all the features needed by our customers, in the near future.
For customers that want NDC content sooner, or don’t require the process to be identical to the existing TMC/GDS process, SAP Concur has been piloting shopping and booking of NDC content with several early adopter TMCs and corporate customers that have requested the NDC content of the Lufthansa Group, British Airways, and American Airlines. SAP Concur has leveraged our existing Select Access infrastructure, and our long-standing relationship with TravelFusion, to enable this content.
How can I get NDC content NOW?
Promises that NDC content will eventually be fully integrated in the TMC/GDS infrastructure is of little comfort to clients wanting the benefits of NDC content today. Our customers have told us that they want an interim, even if not on par with their existing GDS practices. The SAP Concur Select Access feature, which leverages TravelFusion’s technology, allows travel managers to enable content that isn’t available in the GDS. The Select Access feature will now also allow clients to enable participating airlines’ NDC content in Concur Travel.
What is select access content?
Throughout the years, as SAP Concur has been asked by our customers for additional content that isn’t available in their GDS, we’ve obtained it via alternative channels. For example, in 2008, Concur Travel was the first booking tool to make the complete inventory of Southwest Airlines available in a corporate booking tool.
For the past 15 years, SAP Concur has partnered with TravelFusion, which has been an innovator in obtaining travel content and aggregating non-GDS content for 130+ airlines and hotels, such as easyjet, Flybe, Interjet, and Eurowings. TravelFusion has also been an early innovator in obtaining and normalizing NDC content.
Now, our Select Access feature allows clients to enable an airline’s NDC content within Concur Travel. As with Southwest or easyjet, enabling this feature moves all content shopping/booking for that airline out of the GDS. The fares and schedules for the Select Access-enabled airlines are offered to the traveler alongside the fares and schedules of other airlines sourced from the GDS.
How does select access work?
A travel manager simply needs to go into the configuration settings and choose which content they’d like to enable via Select Access. Enabling this feature moves ALL content shopping/booking for that particular airline out of the GDS. Some have criticized this approach, arguing that only the NDC content which is not available in the GDS should be booked outside of the GDS. SAP Concur believes that presenting the flights/fares from two content sources (like TravelFusion NDC content and traditional GDS content) for a single carrier creates a confusing service experience for the traveler, which may cause them to accept needlessly high fares. We believe that simplifying the traveler experience by keeping all of a supplier’s content in a single channel is the quickest and best possible approach for our corporate customers and therefore is the primary objective. Enabling non-GDS content in SAP Concur in this manner isn’t new and has been in use by thousands of customers for more than 10 years.
If I’m interested in NDC, what questions should I ask of my TMC or my preferred suppliers?
SAP Concur advises customers who are interested in accessing NDC content from one of the airlines that Concur Travel supports to discuss the topic with your preferred suppliers and your TMC. Customers need to understand the impact that NDC bookings will have on the TMC’s ability to process bookings, and support travelers, as well as any economic implications. Some TMCs may charge additional fees for supporting non-GDS bookings. There may be additional GDS fees as well depending on which TMC and/or GDS is involved and there will also be a Select Access fee for accessing the NDC content.
How else can I get NDC content and still receive the benefits of managed travel?
For customers who want another option to access NDC content, SAP Concur reminds them that all the content and benefits of NDC are generally available through airline websites. Further, since the NDC content that SAP Concur will offer, in the near future, is from TripLink partner airlines, instructing travelers to book on those airline websites, can be an easy and inexpensive way to get the benefit of lower cost NDC content, without complicating TMC service arrangements or increasing complexity. TripLink ensures that customers who need to book on the airline websites can obtain their corporate negotiated rates when doing so, and travel policy is applied to those bookings as soon as they made on the supplier sites. They can then have that data available for duty of care, reporting and procurement.
Other common questions:
Why do the TMCs prefer the GDS?
Over forty years of development, GDS have built a vast amount of agent functionality into their systems. Thus, TMCs have built most of their infrastructure and processes to be reliant on GDS PNRs (passenger name records). The most seamless and cost-effective way for most TMCs to integrate these NDC bookings into their business processes is for them to obtain the NDC content via the GDS. The TMCs continued preference for the GDS as the source of travel content reflects the operating efficiency provided by the features, functionality, and content of the GDS along with TMCs’ reliance on GDS segment fee revenue.
In the past year, the enthusiasm with which airlines have promoted NDC has resulted in commitments from the GDS to support NDC content. The glow of the upbeat GDS announcements and promises of pilots, has overshadowed the magnitude and timeline of the development work required by other industry facilitators, including booking tools, TMCs and other technology providers. Integrating NDC processes and protocols into the GDS/TMC infrastructure will require each GDS to introduce new NDC shopping and booking APIs. Although this plumbing work will be largely invisible to most customer/travelers, it is extremely complex and will require a significant investment of time, teams, and resources by each party (including SAP Concur).
The GDS are working on building, iterating, updating, and documenting their processes, and developer kits. For the most part, participating industry facilitators, who are downline users of the GDS NDC offering can't even begin their work until the developer kits are fully available. The bottom line is that making modifications to the GDS, the TMC infrastructure and OBTs will take hundreds of millions of dollars of investment and many months/years of efforts.
If Select Access has been around with many airlines and hotels, what exactly is being piloted with NDC?
Since the advent of managed business travel, most air bookings have been made via a TMC’s GDS connection. The quality control, ticketing, and reporting functions, profiles, file finishing, payment, compliance checks, and billing functions that TMCs perform for commercial customers are all based on GDS functionality.
As low-cost carriers (LCCs) entered the market, they usually did not participate in the GDS and required booking on their website or connecting directly to their inventory systems through APIs. TMCs built side processes to deal with these bookings. These side processes created inefficiencies, but TMC adapted to satisfy their customers, especially since LCCs historically were simpler to support than legacy network carriers. Most LCCs typically don’t have codeshare flights, multiple cabins, or corporate discounts, and tickets are typically non-refundable and non-changeable, and they are ticketed by the airline without BSP/ARC settlement.
NDC is like the LCC model in that customers need to connect directly to carrier inventories through APIs. However, the traditional "full-service carriers" also want to offer all the services, bells and whistles that have traditionally been available exclusively through the GDS. As a result, the NDC API connections required are much more complex than historical LCC APIs.
TMCs and online booking tools that want to connect to this new content and use all the features that it offers, have a much more complicated task. In addition to shopping, booking and payment, TMCs and SAP Concur need to support options like corporate discounts; multiple and mixed classes of service; multi-segment, code-share itineraries changes; refunds; cancellations; hold – while still maintaining their efficiencies. To add to the complexity, each airline’s NDC API connections, functionality and processes can all be different.
The current pilots are ensuring that the correct content is available for shopping and booking, and that all the critical functionality which is needed by the airlines, travelers, travel managers and TMCs, is visible and working as designed in Concur Travel.
If NDC is a standard, why is SAP Concur only enabling certain airlines now?
Once NDC content and functionality is fully available via the GDS, SAP Concur will be making the NDC content of all relevant and necessary airlines available via the GDS in the booking tool. In the interim period, for our corporate customers who do not want to wait for the full GDS functionality, we will be doing a special integration for selected airlines.
Despite the fact that IATA has helped to create common definitions of what fields and functions must be available and in what order for their NDC schemas, each carrier has much discretion on how their processes work and which fields actually get populated (such as forms of payment, CVV code requirements, multi-segments, codeshare flights, sum of locals pricing, who does the ticketing and using what technology, etc.) In short, each airline’s NDC API connections, functionality and processes are all different. Having standards certainly makes many attributes more common, but there are enough differences from airline to airline, that iterative testing is still needed to ensure that everything works as expected.
SAP Concur is currently piloting the NDC connections of American Airlines, British Airways, and the Lufthansa Group (LH, Austrian, Brussels, and Swiss). Once we validate that the necessary elements of the process are suitable for corporate travel needs, we will begin testing and enabling the NDC connections of United Airlines.
How can I get started with NDC content now?
As of June 1, SAP Concur is supporting six pilot programs with TMCs testing our NDC offering for all three announced carriers. Customers that have conferred with their TMCs and want to request access, should make sure their TMC has relevant credentials from the airlines. If the travel manager or TMC has access to Concur Travel Solutions, they can file a ticket requesting access and share the credentials with us.
Business Travel Direct, a UK-based TMC, is now providing multiple corporate clients with access to British Airways NDC through Concur Travel. Travel & Transport Stateman, another UK-based TMC partner, also has been testing BA NDC successfully.
Are there other implications to travel management and online booking tools once NDC has widespread adoption?
NDC will greatly expand the airlines’ ability to add, bundle and price new services in creative new ways designed to attract customers. NDC will also allow the airlines to create personalization (potentially by company, level in the company, traveler savviness, airline status, etc.). All these new options will require significant new traveler facing development in Concur Travel to normalize shopping across disparate content offers and display the product offerings.
Additional work will be needed to give travel managers the ability to offer much more granular policy guidance. First, travel managers will have to ensure that their policies provide guidance to help travelers shop/purchase and then the TMCs and OBT will have to evolve to support these more granular policies throughout the shopping, booking, approval, and expense workflows.
The concept of lowest logical fare will certainly evolve over time since it will be harder to discern which products to compare. For example, we may need to figure out how to compare a $300 economy fare that is non refundable, but includes priority boarding, extra leg room and a free meal with a $350 fare that includes expedited security, a normal seat, but is changeable within seven days.
Like NDC content itself, these challenges will take time to identify and solve. SAP Concur is actively examining them and committed to creating solutions that prioritize the needs of our corporate customers and their travelers.
What issues are you seeing from the current discussions and pilots?
As we’ve progressed with these NDC pilot customers and airlines, we’ve identified a few common threads:
- Some TMCs would prefer that we not source the entirety of an airlines fare, schedule and product content from the airline NDC pipes, as we have historically done with the LCCs. Those TMC would generally prefer for SAP Concur Travel to source some of the airline fares from the GDS and other fares from our NDC connections. Presumably this will allow them to maintain their current processes and current GDS inducements for some portion of that airlines’ bookings while still allowing them to pull in any incremental content that isn’t in the GDS.
- Passive Segments: Most TMCs want to add them to a PNR to be able to utilize their existing processes after the booking is made, and SAP Concur has learned that not all the data needed by some TMCs is passed through to the TMC. However, some TMCs have created processes to add the needed data to the passive segments, and others are working to support NDC bookings without passive segments. It’s also important to understand that some airlines do not want or, in some cases, will not allow passive segments to be created.
- BSP (billing and settlement plan): Some TMCs, mostly outside the U.S., manage billing for corporate customers by paying airlines directly for tickets in cash using their applicable bank settlement plan. This service reduces fees charged by credit cards. Concur’s Select Access to NDC does not support BSP Settlement, since most of our corporate customers use a credit card that includes important accounting and expense management benefits.
- Book and hold are a much more common requirement outside the U.S., where many companies require travelers to have the actual cost of airplane tickets approved before they can be purchased. Concur Travel supports customer '"pre-trip approval" policies with book and hold functionality in the GDS environment and we will be adding this to the Select Access environment.
- Exchanges are another feature that Concur Travel supports in the GDS environment but not for NDC. Very few customers enable this feature in the GDS today.
Once the GDS have NDC Content available, will it just show up in Concur?
Once NDC content is available in the GDS, it will not just appear one day through existing integrations. The GDS are spending a tremendous amount of time and effort to be thoughtful of what needs to be built to accommodate the plethora of carriers that will have NDC content via their new Order Management System and aggregate them with airlines that will still be filing fares via the legacy ATPCO (Airline Tariff Publishing Corporation) methods, while still ensuring that existing TMC processes can work with both. This will require the creation of new connections, new formats and new processes on the back end. Once these new connections, commands and APIs are ready, SAP Concur can start identifying how to integrate them and how those new formats will impact all of the downline systems, including the TMCs systems.
Why is introducing NDC content so time-consuming?
Since TMC systems and process are not easily able to manage anything but an active or passive GDS segment, these alternate sources pose a challenge. The need for the TMC systems to have NDC bookings look identical to GDS bookings is time consuming. In practice, this means adding "hold" functionality to a TravelFusion reservation, enabling settlement through BSP, having TMCs manage bookings without passive segments or understanding the need for creating passive segments that are unique to each TMC (frequently unique to each client.) In addition, many TMCs are being cautious about enabling these connections due to added process costs and the potential loss of GDS inducements.
How does SAP Concur prioritize content?
We’re continuously speaking to our customers to understand their needs. As enough customers and their TMCs communicate their desires for a particular airlines NDC content, we’ll evaluate the availability and feasibility of making that content available prior to be it being ready in the GDS. Thus far, we’ve had many discussions with customers and TMCs who want us to enable Lufthansa, American, British Airways, and United Airlines.