It’s a debate that’s come up a lot in the business travel world as of late: NDC vs GDS. Not sure which side you’re on?
On the one hand, if you’ve ever struggled with the complexities of booking flights and other airline offerings as a Travel Manager, it’s time to get excited. The increasing adoption of NDC means easier booking for you and (often) better experiences for your travelers. On the other hand, NDC adoption isn’t as simple as it seems, and it can admittedly be a lot to wrap your head around.
Here’s everything you need to know about NDC vs GDS and what you can expect in the near future.
What is NDC?
Still not entirely clear on what exactly NDC is?
NDC — short for New Distribution Capability — is a program launched by the International Air Transport Association, the organization that supports international air travel regulations, standards and best practices for both travelers’ and the industry’s benefits. Through the use of XML, NDC offers more comprehensive information that allows airlines to better promote their products and services to corporations and business travelers, going around existing issues with GDS. As a result, according to the International Air Transport Association, the business travel shopping experience becomes more transparent and more tailored to each individual shopper’s needs.
Since 2012, the International Air Transport Association has been fine-tuning NDC, testing the system and getting it ready for launch. As of today, it’s actively being used by a number of airlines.
Sounds handy and positive, right? While that seems to be the case at first glance however, there are some who feel that NDC is unnecessary and that the old-school GDS system is fine as is, which leads us to…
What is GDS?
So what is the opposite of NDC in the NDC vs GDS equation? GDS stands for Global Distribution System. These traditional inventory systems are currently how most travel agents, business travel management firms and etcetera find, book and manage flights, hotels and rental cars) for clients and customers. To book in the GDS, you must have an IATA/IATAN accreditation number, in addition to an ARC accreditation number if you’re located in the United States.
NDC vs GDS: The Pros and Cons
There are pros and cons to both NDC and GDSs.
A GDS also doesn’t offer some of the primary benefits that NDC was built around/for. For example, NDC offers more tailored, lower fares that a GDS doesn’t always have access to; there are no distribution surcharges with NDC; pricing is personalized to the booker with NDC; and booking for extra travel costs, such as extra baggage or seat upgrades, is an option with NDC.
Additionally, GDSs have been traditionally closed off to low-cost carriers, but NDC will allow low-cost carriers to offer their fares and services to Travel Managers right alongside the major carriers. Likewise, when you’re comparing low-cost carriers and their offerings, thanks to NDC’s allowance of rich content like photos and videos, you’ll also be able to visually compare what you’re purchasing, across airlines, in a way that’s just not possible with outdated GDS.
Trading GDS for NDC Comes With Its Issues
For example, as one Travel Weekly article detailed, for TMCs with a GDS contract, booking via NDC means a potential loss in GDS incentives or ending up with GDS penalties because they’re not meeting a booking quota. As TMCs lose incentives and face penalties, this could impact the pricing of TMC services.
Additionally, GDS allows access to airlines that NDC just won’t, given that NDC is still growing in popularity. That said, some airlines are moving over to offering their fares specifically through NDC, which means that GDSs could lose your favorite airlines, leaving you no choice but to make the switch if you want to continue booking with that airline.
As an example of this, in March, American Airlines announced that starting in April, certain items are only available for travel agencies booking via NDC. These items include “best available third-party public channel content.”
Thankfully, there is another option. It doesn’t have to be NDC vs GDS. You don’t have to choose either/or. You can have both, as some major GDSs are implementing NDC technology so as to give travel managers and agencies the best of both worlds.
What Does the Industry Think?
What does the broader travel industry think of all this? A recent Global Business Travel Association survey strove to find out, polling its membership in April.
The survey found that more than half of travel buyers felt that airlines were moving to NDC booking too quickly, without giving third-party intermediaries, like TMCs, enough time to adjust to the necessary NDC technology and processes. More than half seemed to call out American Airlines’ expedited approach to NDC booking. Additionally, more than a third of the buyers said that their travel programs have been negatively impacted by these carriers implementing NDC booking.
Nearly half of buyers, though, said that they hadn’t implemented NDC at all, at least not yet. Of those who have, less than 10% said they found challenges with the NDC process. More than half say they don’t anticipate budgeting for extra NDC-related servicing costs.
In large part, it seems that most travel buyers and managers find that they just need more info on NDC and what it means before they make the switch.
The Good News?
The good news in all this? While NDC vs GDS can be a confusing, complex topic with lots of pros and cons for each side, the team at JTB Business Travel, as a leading TMC, is prepped and ready for NDC.
If you’re worried about what NDC means for your booking process or your business travelers, you can rest assured that JTB Business Travel is here to guide you through the transition, helping ensure you always get the best fare deals and now, thanks to NDC, new fares, offerings and services that are more tailored to meet your unique needs.