Where does the intermediary’s relationship with the customer end and the airline’s begin and what exactly is a direct booking?
When you gather travel distribution execs together, inevitable discussions ensue around collaboration, emerging technologies and the power of Google and other companies including Facebook termed gatekeepers, but, a recent event sought to move the debate on a little.
The Tnooz-London School of Economics event included executives from BCD, eDreams, Finnair, LSE and Skyscanner and the basis for discussion was a paper on the future of travel distribution (recap here).
A question about chat services addressed to Skyscanner chief technology officer Bryan Dove opened up an exchange around direct booking and new entrants into the value chain.
Dove says there is evolution in priorities for airlines and online travel agencies:
“The notion of what is the direct channel also starts to evolve as technology evolves.”
This is not the first time the Skyscanner folk have voiced opinion on evolution of the direct channel with commercial director Frank Skinner saying recently that airlines need to rethink the direct channel as being wider than their websites.
Dove says that Skyscanner’s chatbot, launched in May, has seen a threefold growth in recurring users and adds that for the metasearch player it’s about experimenting with new channels to try and understand how and where consumers want to be served.
These thoughts raised a big question from Finnair head of commercial strategy Rogier van Enk who agrees the airline community needs to think about what consumers really want.
“It’s in interesting discussion we are having internally. Skyscanner has a bot and we’re about to launch one of our own. We’re working with Skyscanner on an NDC API focused on selling tickets and manage my bookings.
“The biggest question I have is should airlines allow customers to check-in via Skyscanner through its bots? Where do we want to lose the customer and where does Skyscanner want to gain the customer.
It’s a very big question that we don’t know the answer to.”
Picking up on that, EGC director at LSE Dr. Graham Floater believes the industry needs to define what it means by direct distribution.
“If consumer goes to a website completely neutrally without any other entity or organisation guiding them then you can probably call that adirect sale. Once you have a gatekeeper, GDS, OTA or whoever then it no longer become direct distribution.
“There tends to be discussion in many quarters around direct distribution through the intermediation of gatekeepers versus as if that’s not an intermediary versus indirect through a GDS or OTA. What we’re simply seeing is that there is a new intermediary on the block and they do things in a different way.
“For airlines, there is a major question – how far do they want to go in terms of the relationship with any of these industry players and allowing their direct distribution, their customers, to go to someonebody else. It comes back to negotiating power and will airlines be big enough to negotiate with any of these other players who are intermediaries?”
He adds that going forward it will not be about booking a particular airline or hotel but a “much broader experience” for the consumer which means industry players will have collaborate.
eDreams Odigeo chief air supplier and advertising officer Pablo Caspers points out that currently everyone is “behaving more like competitors.”
“There should be more partnership. Everyone should focus and bring to the business what they are strong in.”
BCD Travel vice president of global distribution and channel strategy Thane Jackson also stressed the importance of everyone working together.
“Perhaps bringing in all the elements of the value chain would be a better result for all of us. At the end of the day we are talking about travel distribution and looking to service our customers.
“If we work better together ultimately the customer will want to work with us more and we’ll all benefit from that.”
Here’s a clip with highlights of the event:
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