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Tuesday, 29 March, 2016, 14 : 00 PM [IST]

Disruptive Benefits

P. Krishna KumarOne who follows the pain points of the travel and hospitality industry today would easily understand how it played into the hands of alien ‘disruptive’ forces without realising how destructive they could be in the long term. In their quest for quick bucks, airlines and hotels alienated the conventional distribution channels and rode piggyback on Global Distribution System (GDS) and Online Travel Agents (OTAs), respectively. It took some time for them to realise that these IT companies have grown like monsters at their expense. While airlines and hotels were fighting to balance their top lines and bottom lines for survival, those who pretended to be saviours once, flourished and prospered in their backyard.

Survival instincts are now forcing the industry players to explore alternatives. The New Distribution Capability (NDC) being worked out by IATA may prove to be a threat to the existing GDS model and the subsequent revenue stream to the travel agent. However, it remains to be seen how NDC is adopted and adapted by the GDS companies and the OTAs. If used to its fullest potential, NDC could prove to be a boon rather than a threat to all segments of this industry and customers alike. NDC is boasted as the biggest project of Big Data aimed to make the playground open for everyone. The big budget consolidation that is trending in the hotel industry is also aimed at unlocking the stranglehold of OTAs on hotel distribution. Hotels have understood that more than selling their inventory, it is the quality of the revenue that is central to their survival.

Seizing the opportunity, the offline agents have also started recouping themselves against the ‘unethical’ business practices being indulged by ‘fund rich’ OTAs in their game of one-upmanship. A clamour for ‘Ethical Tourism Practices’ by stakeholders of the industry has gone viral and is gaining acceptability from all quarters.

The NDC framework in all probability will be the biggest game changer ever to happen in the industry.  It is being said that the profile of a travel reservation agent will become that of a trading agent where instead of booking tickets, he will be advising his customers when to book a ticket or not as airline fares will be as dynamic as share prices in a stock market. NDC can also be looked at as the next big opportunity where young and dynamic entrepreneurs enter the industry and make optimum use of technology.

P Krishna Kumar
Bureau Chief, New Delhi
krishna.kumar@saffronsynergies.in
 
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