11 months ago
 

LSE-Tnooz event discusses when a direct booking (maybe) isn’t a direct booking

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 Skivington 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 Graham Floater believes the industry needs to define what it means by direct distribution.

“If a consumer goes to a website completely neutrally without any other entity or organisation guiding them then you can probably call that a direct sale. Once you have a gatekeeper, or GDS, or OTA or whoever then it no longer becomes direct distribution.

“There tends to be discussion in many quarters around direct distribution through the intermediation of gatekeepers as if that’s not an intermediary versus indirect distribution 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:

A Q&A with Dr Floater of the LSE can be viewed here and the full panel event can be viewed here.

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About the Writer :: Linda Fox

Linda Fox is managing editor for Tnooz. For the past decade years she has worked as a freelance journalist across a range of B2B titles including Travolution, ABTA Magazine, Travelmole and the Business Travel Magazine.

In this time she has also undertaken corporate projects for a number of high profile travel technology, travel management and research companies.

Prior to her freelance career she covered hotels and technology news for Travel Trade Gazette for seven years. Linda joined TTG from Caterer & Hotelkeeper where she worked on the features desk for more than five years.

 

Comments

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  1. Jonathan Boffey

    There’s certainly evolution.

    In the good old days when Metasearch meant just that and didn’t mean book it too, we used to have some fairly clear lines and nomenclature. Not surprisingly, it has now become in some instances, Metabook.
    Assuming online, direct bookings are normally B2C in nature and are the result of website traffic ie. HTML based presentation of products.
    Again assuming online, indirect bookings are from a third party business representing the traveller, thus are B2B and are targeted at a web service API – usually XML or JSON based.

    This means I now have direct and indirect B2C. We do of course have mobile apps that ultimately use B2B type APIs but are direct B2C traffic.

    Last but not least, we now have Amazon Echo. Can’t wait to book my next flight via that device 🙂 Will use of the Echo ‘skill’ result in charge to the travel supplier? Is this a sort of meta-direct B2C using audio presentation booking or shall I call it something else?

     
  2. Martin Soler

    Interesting discussion and one that is finally being brought to out to the open. There future of pure direct is limited. We need to redefine what direct means. Even today, if one is paying for AdWords or meta-search one can argue that it isn’t really direct as that cost is almost the same as the cost of distribution in many cases. The post-search era will see much fewer channels and the channels will be owned by larger platforms such as Google, Facebook, Apple, Amazon who will pick and chose the channel and the traveler will hardly know what channel they booked on. Does having an email address really mean one “owns” the customer? If you ask a customer I think they’ll be laughing at that very concept.
    PS: Would be great to define the acronyms used eg: NDC API, EGC, LSE

     
    • Linda Fox

      Apologies Martin – I had enough trouble with all the names and job titles – NDC new distribution capability (IATA), LSE London School of Economics, EGC Economics of Green Cities (I believe) and API application programming interface

       
  3. Martin Cowley

    Hallelujah! Finally a constructive discussion between people who are prepared to leave vested interests behind and concentrate on what is best for the customer. “Everyone should focus and bring to the business what they are strong in.” Understanding and acting upon where the direct channel starts and stops is fundamental to a constructive debate about distribution. May sanity yet prevail!

     
  4. Zachary Wallman

    Hey Linda,

    Loved reading this article along with others that you have read. I don’t comment often because I never feel that what I have to say is important enough. And it usually isn’t. I just wanted to let you know that you did an extra amazing job with this one.

    One question though,

    “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.”

    I know you were quoting someone else’s words here but can you clear up what he was trying to say. I really don’t understand. If he referring to the Expedia/Red Lion deal? (Where Expedia is still the middle-man but they share the data (customer email address) with Red Lion?)

    And who is “the new intermediary on the block” ?

     
    • Linda Fox

      Thanks Zachary – the new intermediary on the block could be Facebook, Google or someone else. He’s trying to say that most bookings have some other touch before they end up on the supplier website and are therefore indirect and that suppliers need to think about that. Frank Skivington talks about it here too -https://www.tnooz.com/article/airlines-mobile-travel-capa/ and the LSE report, on which the discussion is based, can provide more information on author Graham Floater’s perspective -http://www.amadeus.com/documents/reports/lse-report-travel-distribution-the-end-of-the-world-as-we-know-it.pdf – hope that’s helpful 🙂

       
 
 

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