Intelligent retail promises a future of predictive and customised bookings, changing the ways that travellers shop and buy their trips and holidays. But that also means big changes are necessary for travel agencies in their thinking and strategy to remain relevant and survive an ever-evolving wave of technological disruption.
At the Sabre Technology Exchange in Las Vegas in July, Sabre unveiled a brand-new solution that promises to catapult the hospitality industry into an age of advanced retailing. The SynXis Intelligent Retailing tool, slated for an early-2020 launch, will enable hotels to sell not just room ancillaries, but also present a guest with highly targeted travel products in real time during the booking process.
These recommended products are determined through machine learning, based on a customer’s own preferences and the purchasing patterns of similar users. The menu is all-encompassing, ranging from couples’ massages and celebratory champagne to family ticket bundles and, notably, day tours and activities.
The result is a shopping and booking process that is personalised, dynamic and instantaneous. This development opens up possibilities for more players along the travel booking chain, but it also poses the uncomfortable implication that machines will soon know what tours and products a traveller will likely buy – faster and with more accuracy than a travel agent.
Sundar Narasimhan, senior vice president, Sabre Labs and Product Strategy Vision, declared that Sabre is casting a heavy focus on intelligent advanced retailing, and that SynXis Intelligent Retailing is one of the first concrete steps towards the goal of making it an industry-wide mainstay by 2025.
Time is running out
While the industry makes a gradual march towards intelligent retailing, the level of awareness among the travel agency community about its impact and the available digital strategies is still at a worrying low, expressed travel technology providers.
Solutions centred on IATA’s New Distribution Capability (NDC) standards and the Airline Tariff Publishing Company’s (ATPCO’s) New Generation Storefont (NGS) capability can allow agencies to sell unbundled air fares, products and ancillaries, thus enabling them to provide customers with a more customisable and flexible booking experience.
However, the magnitude of these benefits is lost on a concerning portion of agents. Rakesh Narayanan, Sabre’s vice president, regional general manager, South Asia and Pacific, travel solutions airline sales, stressed: “While Sabre is investing heavily in training and education for its community of agents, a lot of work still needs to be done to ensure that all industry players are up to date on NDC. At this stage, both travel suppliers and travel agencies have to become better acquainted with the complete benefits brought on by NDC, and how to make these opportunities a part of their strategy.”
Similarly, Rob Brown, global vice president and managing director of OTA business, Travelport, observed that although travel agencies have “strong motivations” to provide a smarter and faster retail experience, “the primary focus of many is still solely on converting website visitors to bookers, which already makes them fall behind the competition”.
And while airlines have been eager to board the NDC train, their efforts are still not being sufficiently matched by distributors. Jeff Lobl, managing director of global distribution for Delta Air Lines, lamented: “There are customers who prefer premium products – we see overwhelming numbers on our direct channels – but 99 per cent of agencies are dominated by the practice of showing the lowest fare first.
“But customers don’t always want that. The lowest fare is no longer as attractive a product as before, and offers can now be personalised and exciting. But if these cannot be displayed properly and customers can’t see it, then they’re not buying.”
In Asia, the chief reasons for slow industry take-up are a lack of Asia-specific outreach and the high cost of adopting such technology. General manager of Brunei-based Century Travel Centre, Foo CP, said that the degree of engagement between technology providers and travel agents leaves much to be desired, resulting in little awareness of options in the market.
He noted: “Attending more events (with technology providers) would be good to help us see what solutions there are (in the market).”
The benefits of NDC application programming interfaces (APIs) and NGS capabilities are still sinking in, but with the advent of intelligent retail, the agency community may no longer have the luxury of time. The ability to provide smart and dynamic travel retailing will soon be bestowed to hospitality players – and they may be quicker to the draw.
Already Langham Hotels in Hong Kong is working with Sabre to pilot the SynXis Intelligent Retailing tool this year, after which it will run on a test-and-learn phase for the next two quarters. By 2020, the solution will be released to the market, helping more hospitality players achieve “retailing beyond the room, or even without the room”, described Jeff Henley, manager, solutions consulting, Americas at Sabre Hospitality Solutions.
And even before hotels begin to roll out smarter in-destination offerings, the role of the travel agent – whether a travel designer, consultant, specialist or destination expert – has already come under threat. More OTAs now enable travellers to easily shop, plan and book innumerable permutations of transport and itinerary options with several clicks of the mouse.
“At the stage of booking, a new and growing OTA model is to deliver a competitive search response that includes multimodal itinerary combinations and connection points for one-way, roundtrip or multi-leg travel. The booking may consist of tickets from multiple suppliers and is a good way of increasing conversion among price-conscious travellers,” described Brown.
With such extensively autonomous travel planning available at their fingertips, customers would soon be increasingly inclined to skip the middleman altogether.
NDC, NGS critical lifelines
As more retailing solutions come online, NDC-enabled tools and NGS capabilities are fast becoming a critical lifebuoy for agencies to stay afloat. Mid-2019 has seen the tech juggernauts roll out a wave of NDC-enabled and NGS developments in attempts to ‘future-proof’ travel distributors.
In April, Sabre launched its first set of NDC APIs with United Airlines’ global flight network, which has been made available to its Beyond NDC agency partners via Sabre Red 360. Soon to follow in 2H2019 are scaled-up additional APIs that support voluntary and involuntary flight changes, refunds and voids.
Meanwhile, a month after the July launch of the Amadeus Travel API for travel agencies, Amadeus announced a retailing partnership with American Airlines and American Express Global Business Travel. The companies shared that American Express Global Business Travel has successfully processed live bookings of American Airlines’ NDC-enabled content by leveraging the new Amadeus Travel API, and the partnership aims to execute the API’s full functionality of end-to-end booking flow and servicing, which includes cancellations, exchanges and ancillaries.
Travelport has also pushed out the first phase of ATPCO’s NGS capability with multiple airlines and partners, including online booking tool WhereTo and global developer Travel Technology & Solutions. As the ATPCO standards continue to evolve, Travelport is working to enable exact comparisons across airlines’ full range of products, whether for online agencies, corporate booking tools or Travelport’s desktop solution for offline agencies, Smartpoint.
Displaying a full range of airline products and ancillaries may just be the first step, but it is critical for online agencies that wish to maintain their “advantaged position”, asserted Brown. He explained that it is “essential for OTAs to present travellers with the branded fare options available across multiple airlines”, as it would “eliminate the need for travellers to visit the websites of airlines and competing agencies to compare offers”.
He continued: “Our research shows that 73 per cent of travellers would rebook with an OTA if they could book the whole trip in one place. OTAs need to work more effectively to exploit this position.”
What agencies should do is immediately get acquainted with the ins and outs of NDC to understand how to maximise their mileage from it. Sabre’s Narayanan advised: “The first step for agents to familiarise themselves with what NDC is and isn’t, is to participate in industry-led sessions, such as the ones hosted by Sabre.
“Then, start an open dialogue with corporate customers so they know that you are proactively analysing the challenges and opportunities related to NDC. Also speak to airline (partners) and technology providers to understand how they plan to NDC-enable their processes and applications.”
Travelport’s Brown urged that agencies should also take a closer look at their data strategy and reconsider how they can add value to their travellers. Referring to advice Travelport offers to its agency partners, Brown stated: “Integrate closely with your data team, whether in-house or a third-party supplier. With the right data and analytics strategy, agencies can transcend the traditional travel agency business to offer much greater value for customers during every stage of their travel experience.”
Now, the question remains as to where the old-school travel advisor stands, and agents are exhibiting uncertainty about their future in this age of dynamic digital distribution.
Grace DeVita, vice president of Florida-based Post Haste Travel, said that while NDC-enabled content has allowed her to “do more and more for customers” and “add more value to my company and my clients”, she is also concerned about the changing expectations of customers.
“Our clients’ expectations are different now. They go on the websites and they see what’s out there, then they come back to us and say, ‘I can do this myself when I go online’. Even the big leisure agencies have the same issues,” she expressed.
Advisors acknowledge that change is imminent, although they do not know how. Jemima Leonard-Thomas, travel consultant, Carib-World Travel, said: “Everybody in travel knows that it’s part of our gig – our work is constantly changing. I’m not worried because we knew this was going to happen eventually, we just have to adapt to it.”
A balance of digital and physical
There may not be a clear answer in the crystal ball for now, but experts forecast a likely scenario where the successful agencies will marry technological strategy and human interaction. Furthermore, there will remain a segment of customers who would pay for personalised service from a travel designer, and a number of destinations that would require destination expertise and guidance.
Champa Magesh, vice president, Asia Pacific Retail Travel Channels, Amadeus, elaborated: “The entire retail travel agency business model has been about the human touch. The future of retail travel agencies in Asia Pacific (now) requires an optimal integration of human talent and technology enablers to deliver a personalised, frictionless and memorable experience, underpinned by an omni-channel customer service strategy.
“Successful retail travel agencies must combine technology enablers and human intelligence in a way that creates a convenient and cohesive experience no matter how, when or where a customer reaches out.”
This seamless booking experience extends even into an agency’s physical space, where a customer should be inspired to travel while enjoying a personalised planning session.
Magesh added: “Now it’s about combining the physical, digital and human. (Agencies) need some form of human interaction, but they also need to be omni-channel – working across multiple channels, online, mobile and brick-and-mortar.
“This is a tipping point; the time for change is now. ‘New Retail’ is the future – where physical spaces are used to inspire customers, regardless of whether they make their booking in store or online.”