IATA and NDC Phobia–Update On the New Distribution Capability

This analysis appeared December 17, 2013 in Cornerstone Information System’s “Insight & Opinion” section.

IATA is listening–or so I’ve read in a number of published reportsi. To whom and about what is open to question.

The industry has been repeatedly assured that the NDC isn’t what you may think, and, that the NDC or something like it is inevitable in any case.

In his piece, “Fear and Loathing in Airline Distribution (aka NDC Phobia),”ii which a surprising number of observers have liked well enough to redistribute, IATA’s Aleks Popovich remarks, “today’s airline distribution network is changing with or without NDC.”

Mr. Popovich also says “Let’s get the posturing behind us and work together to address the heart of the matter.”

Surely that’s a sentiment everyone can support, but “NDC Phobia?”

NDC Phobia Described

I don’t myself believe that the majority of NDC’s critics are subject to whatever that malady might involve. I do believe that organizations advancing business and technology proposals have an obligation to adequately explain and defend them–and not keep shifting the scenery on stage so that the audience forgets how bad the play truly is.

IATA asks its critics to accept that criticisms of the NDC can be dismissed by statements like,

These are all legitimate questions that IATA recognizes must be answered if NDC is going to become a reality. But it is the market, not IATA, which must provide those answers.”iii

If that were true, perhaps IATA should consider whether it is wise to propose changes to the essential ways in which travel distribution operates in the guise of a proposal for technology standards and cooperation.

You don’t have to accept my analysis to come to that conclusion. According to IATA description of What is NDC about:iv

  • The initial scope is the shopping process.
  • In tomorrow’s new distribution, airlines will have greater ability to interact with who is requesting and provide tailor-made product offers.v

In order for that to happen, multiple changes to the structure of travel distribution must occur. That’s assuming we agree with IATA that this business structure is superior to the many others that are available and the inevitable financial and relationship costs its implementation requires are offset by whatever benefits will accrue.

IATA appears as unwilling to make a defensible business case now as it did when last I wrote about this topic.vi

Later, in the same IATA document:vii

Key Principles New Distribution Model

  • It is critical airlines construct/own their product. Need to connect to customers through indirect channels with interactive relationship.
  • Standards must facilitate authentication of customer identity, enable personalized offers through the whole distribution supply chain.viii

Whether you agree with these objectives and believe that the marketplace is asking for them (which I do not), they clearly focus on changes to business processes and not simply to the adoption of new communication methods.

The messaging standard itself isn’t particularly relevant, not is its potential efficiency, how related or unrelated it is to other protocols the industry might like to use, or how potentially rich a data environment might be created. The business processes that are both required to sustain the NDC and the processes it will potentially enable are more central to justifying the NDC.

The frequent suggestion that people still have to build business processes that use NDC capabilities, and that this is a marketplace function, is correct as far as it goes, but it doesn’t really address the quite rational business concern:

People don’t create “standards” without the expectation that they will be used as fully as they can.

My prior NDC comments inspired several objections to what I called “privacy compromises.” Privacy, is unrelated to communication standards–or so I’ve been told.

If the NDC’s business goals (described above) are to be realized, a far greater amount of specific, identifiable traveler data is required than is necessary for booking an air ticket. This is assumed to be collected by the NDC and is also assumed to be available as part of the traveler selling process.

The intent of collecting these data is to deliver “recognition by airlines and personalized products offers.”ix How does this suggest anything other than a fundamental change to the type and amount of data surrendered by travelers?

Specifics as to how this would work and why it has sufficient value are weak. Amazon is typically cited as the visual model, although nobody I’ve listened to bothers to explain why Amazon has any relevance to selling transportation.

The traveler is, therefore, asked to surrender data based upon promises that something valuable might, someday result. The best that can be said of that arrangement is to call it a “compromise.”

It isn’t the same thing, for example, as self-identification with a passenger-type that might be entitled to a discount or other services–the process is not self-initiated and the deliverables are unknown.

Who’s Talking and Who’s Listening?

According to published reports, IATA seems to have abandoned travel agents as “key” participants in the NDC pilot.”xIATA should have engaged travel agencies of all descriptions more skillfully from the start, and the lack of meaningful agency involvement needs to be quickly and wholly resolved.

In recent weeks a collection of trade groups announced an effort to develop alternative standards.xiThat initiative isn’t going anywhere.

The serious questions are about business, not standards. These are the questions IATA says it doesn’t want to answer.

It’s difficult to conceive of a standard that would be embraced by the airline industry being developed in competition with IATA’s standard, especially this late in the day. None of the interested trade groups has the technological or business capability to make that happen.

Putting the NDC Argument Behind Us

The industry’s energy is best spent not tinkering with alternative standards but insisting that IATA confront the real business questions the NDC raises.

This exercise represents one of several business process and strategic flaws that compromise the NDC. These have real strategic, implementation, and operation costs for all parts of the distribution system that are not addresses by the NDC’s proponents. There are direct and indirect costs for travelers as well.

I can’t agree with observers who suggest that it’s time to put NDC objections in the past and face up to business realities. It’s IATA that wants to walk away from business discussions–they’re so inconvenient and it doesn’t have good answers.

 

Notes:

i    Michèle McDonald, GDS Exec Says IATA Is Listening, (Travel Market Report, November 7, 2013).

ii   Aleks Popovich, IATA Senior Vice President, Finance and Distribution, Fear and Loathing in Airline Distribution (aka NDC Phobia), (Tnooz, August 26, 2013).

iii Popovich, op. cit.

iv   New Distribution Capability – Update, (International Air Transport Association (IATA), November, 2012), page 8.

v    Emphasis added.

vi   David Wardell, IATA’s New Distribution Capability (NDC), (Insight and Opinion, July 15, 2013).

vii  IATA, op. cit, page 9.

viii Emphasis added.

ix   IATA, op. cit, page 11.

x    Jay Boehmer, Agencies Absent As IATA Names NDC Pilot Participants, (The Beat, October 30, 2013).

xi   Kate Rice, Travel Groups Propose To Work With IATA On Distribution Initiative,(Travel Weekly, October 28, 2013).

Difference Engine: Obituary for software patents | The Economist

According to The Economist, something may finally be done about “patent trolls,” although I personally don’t agree with the view that no computer software should be patentable.

“AT LAST, it seems, something is to be done about the dysfunctional way America’spatent system works. Two encouraging events over the past week suggest the patent reformers are finally being heard.”

Complete article here.

An interesting piece that credits much of the current patent mess to miscalculations by President Carter in the 1970s.

What Would A Proof of Open Booking Look Like?

One can spend considerable time and energy developing specific and detailed reviews of flawed theories and business proposals. Although appreciative comments and note are often the result, it’s important to recognize that this isn’t how business strategies should be developed.

The burden of proof rests with the proponents of new strategies and theories to use adequate and appropriate reasoning, and specific proofs to show that these are valid–not with everyone else to show why they are not.

Open Booking, as presently announced, is an ill-conceived business strategy that rests upon faulty logic, inadequate data, poor research, and a suspension of belief in how the real world operates. Its proponents have, or should have, certain obligations to correct these errors and show how Open Booking then remains a valid business premise.

Absent a much improved business case, the travel community is justified in rejecting Open Booking’s imaginary benefits without further argument. The disinclination of others to spend time refuting unsupported theories gives them no credence whatever.

Here’s a concise outline of how Open Booking must be proven. It’s not unrealistic and doesn’t assume more that a correct application of available evidence.

I’ve also attached a “conclusion” as to how likely we are to ever see any of these points addressed.

1)    Assume the Burden of Proof

Advocates of any theory, business or otherwise, carry the burden of proof which requires them to adequate demonstrate why their ideas are valid.

Statements about Open Booking such as “travelers are booking directly with suppliers and often times spending less money than if they go through a managed program,” or “there have been studies that have validated this but unfortunately, the status quo has swept them under the rug” are irrelevant commentary and establish nothing.
When you make such claims, it’s your job to substantiate them. Produce your evidence or abandon your claims.

Conclusion: The Burden of Proof is troublesome and inconvenient. It’s much more fun to make random, unsupported claims and suggest that people who disbelieve you should know better. The logical basis for Open Booking is so shaky that were unlikely to see a rush to defend it with more that opinion and speculation.

2)    Clearly and Comprehensively State the Proposition

Any business theory requires a detailed, comprehensive statement of what it is and how its proponents expect it to work. For Open Booking, that means more than the vague statements about how everyone is doing it so the result is therefore inevitable. The business proposition needs to be positively defended in order to be valid. Simply because flaws can be identified in the travel management process does nothing to advance the cause of Open Booking–there are other equally choices available.

The case for Open Booking also needs to consider business operations in the real world in detail and discuss how Open Booking affects each of them. A few short PowerPoint presentations do little to advance this discussion.

Conclusion: Building a correct business case is a lot of work, and Open Booking is a moving target that seems to evolve along a new line as soon as someone points out its shortcomings. It’s unlikely that anyone will expend the effort to improve this picture.

3)    Define Specific, Unambiguous Proofs That Your Assertions Are Correct

Once you’ve explained the business case for Open Booking, show us the clear proof-points that demonstrate the theory is valid and worth the effort. Not travelers are booking directly with suppliers and often times spending less money than if they go through a managed program” but how much, how often, under what conditions, and to what degree does this have to be so to offset costs and business risks?

Conclusion: If Open Booking could be substantiated in this way, someone would have tried to do so by now. The fact that proofs and evidence are abandoned in favor of opinion and anecdote is itself a demonstration of Open Booking’s failure.

4)    Use Objective, Comprehensive, Accurate, and Scientifically Correct Data

Forget self-selected surveys, tiny samples, biased questions, and the general lack of controls that infests almost all travel industry research. Produce data that can be defended, use it to establish your proofs, and then your Open Booking business proposition might have some validity.

Conclusion: Almost all travel research is useless and contrived to establish the preconceptions its authors want to perpetuate. This is unlikely to change anytime soon. As best (and this is conceding a great deal) the data in support of Open Booking are ambiguous.

Open Booking’s proofs and research should be straightforward and, if correct, should silence critics when accompanies by a comprehensive business proposition. It’s time this evidence is forthcoming.

5)    Comprehensively Describe How You Did Your Research

What precisely was your sampling methodology? How are your conclusions sustained by the raw data? What is an alternate interpretation of the data and how do you answer that interpretation? What would researchers have to do to replicate your research? Who sponsored your research and what are their and your predispositions?

Conclusion: Real research is transparent, fully explained and disclosed, and replicable. Spurious research sustains one-time conclusions or hides behind a proprietary cloak. This type of transparency and disclosure is very rare in the travel industry and non-existent as concerns Open Booking.

6)    State What You Cannot Yet Prove and How This Affects Your Conclusions

Scientific research acknowledges its shortcomings and identifies what cannot yet be proven as well as what can. It also admits areas where future evidence might disprove the theory. The quality of your interpretation of the evidence in support of your claims is as important as what that evidence specifically shows.

Open Booking lacks a real statement of its comprehensive business case, real proof-points that are offered to establish its validity, scientific evidence sufficient to establish the vague claims made in behalf of it, and a rational analysis of its very real deficiencies.

Conclusion: Open Booking’s proponents are no more likely to improve their process or develop their evidence in this area than they are in any other. Remember, if you are an advocate of Open Booking, you have the responsibility to develop and present your adequate evidence before anyone is obliged to give your ideas credence.

It’s not up to me or anyone else to disprove Open Booking–the burden rests with you. The six areas discussed here should be a minimum expectation.

The Business Reality of Open Booking

This analysis appeared October 9, 2013 in Cornerstone Information System’s “Insight & Opinion” section.


Open Booking, noun: A travel industry term concocted to describe the process whereby problems that don’t exist are solved using techniques that don’t work, so as to produce savings that can’t be defined.

I’m not specifically against Open Travel or Open Booking, but if it’s such a good idea a straightforward case should be made in favor of it, using real data and sound business arguments. The fact that this doesn’t happen is very telling.

Open Booking rests upon a theoretical foundation that is distant from the real world and requires us to suspend belief in how travel distribution works if we are to adopt it. A few business concerns and examples may bring Open Booking’s contradictions into focus.

Travel Management Companies

The “M” in TMC represents Management. TMCs provide value because they appropriately manage the travel process on behalf of their customers; when they fail that value disappears.

Open Booking’s proponents speak of the evolving role for TMCs looking like a subscription-based service where agents provide support regardless of where and how reservations are made. How this might be an improvement over a TMC’s involvement in the current online booking process is left somewhat mysterious.

In the real world, TMC experience and expertise can shorten the path to correct decisions and avoid the wreckage from bad ones. While it’s not impossible to clean-up problems after the fact, it is typically more difficult and expensive–as anyone with experience at a subscription-based 24-hour travel support service could tell you.

To suggest that TMCs should support corporate travel in this mode by default is to say that their services have little or no value–which is clearly not the case.

Whatever its flaws, travel management operates the way it does because it works. Desiring to correct those flaws is not a testimonial for Open Booking.

Duty of Care

Corporate travel managers should have concerns beyond the basic cost of travel services, one being duty of care. Broadly speaking, in the real world this is a generally accepted principle which says that individuals must take reasonable care when performing actions that could foreseeably cause harm.

It applies in business as in other areas of life. Concerning travel, the possible implications are obvious, as there are numerous services informed and prudent people should not use, places they should not go, and things they should not do.

Allowing or even requiring travelers to bypass a source of expertise that is well-known, established, and otherwise available to them might not cause a duty of care problem, but the potential is real and shouldn’t be dismissed in the quest for imaginary travel cost savings.

Managed or Not?

Open Booking supporters often affirm that it is not the same as unmanaged travel–a distinction without a difference. When you stop managing in the real world you allow events under your control to be handled in whatever ways the people involved feel is appropriate.

That is the essence of Open Booking. The fact that you might be able to collect data, count the cost of the result, and disagree with choices made doesn’t compensate for the lack of control.

Since 2002 public companies in the United States have operated under the Sarbanes-Oxley Act (SOX), which is a complex set of financial regulations that are intended to correct the financial and management errors that caused the financial scandals of that period. Among many other things, it requires the management of public companies to take specific responsibility for financial reports and for their own actions.

It also imposes requirements as to internal financial controls, conflicts of interest, and the level of understanding management and auditors must have over internal processes and procedures.

Travel is a significant part of most public company finances–often among the largest expenditures. While the specific implications of SOX vary substantially by company, why would it be in the interest of any manager facing such obligations to forsake management-based controls over expenditures that might be counted in the millions in exchange for unproven lower costs and a somewhat lesser level of employee complaints?

SOX is very difficult to reconcile with Open Booking–counting what has been spent or even establishing budgets for travel is not sufficient, as SOX requires control and meaningful representations that proper procedures have been followed.

The Business Reality

Open Booking as it is currently represented is a bad idea for travel agents who have no realistic role in its operation. It’s equally bad for corporate travel managers who are asked to abandon the tools that are central to doing their jobs.

 

The Productivity Pit

This analysis appeared September 17, 2013 in Cornerstone Information System’s “Insight & Opinion” section.


Innovation in the travel industry is much more difficult than you may imagine. Not only is there a famine of genuinely innovative ideas and programs but gaining acceptance for them can be close to impossible.

Nowhere is that more clearly in evidence than through industry productivity. There are some variances depending upon the activities being measured, but in general industry productivity hasn’t moved significantly in many years–except perhaps in the wrong direction.

It’s tempting to think that today’s online-enabled world must represent productivity at its best. For individuals and businesses, everyone has to have a smart phone, a tablet, and usually also a PC–all online and just waiting to make them more productive.

Personal computing, in whatever form, has caused us to confuse “busy work” with meaningful work. Finding the latest and greatest applications for tablets and phones, or innovative ways to make things happen on hand-held devices that were never designed for them are examples of nonproductive tasks we tolerate because our gear has to work the way everyone says it should.

We also simply must be “online and mobile” in order to get anything done. Highly paid people waste their own time with this high-tech tinkering instead of doing something useful.

The industry is so suffocated by information that people have started accepting irrational actions as normal.  According to some reports, it’s “usual” for travelers to consult 20 or more different web sites prior to making a reservation.

When you recognize that many of those sites simply take information from other sites and repackage it, one can only wonder what people are thinking.

I believe productivity in most areas of travel distribution hasn’t shown a real increase for at least 10 years, and that developments on the commercial horizon that promise change are indeed rare.

New Inventions, and Other Fallacies

“The fact that an opinion has been widely held is no evidence whatever that it is not utterly absurd; indeed in view of the silliness of the majority of mankind, a widespread belief is more likely to be foolish than sensible.”

 

– Bertrand Russell, British author, mathematician, & philosopher (1872-1970)

I was head of technology for one of the country’s largest travel management companies for years. More than once I remarked to my colleagues, who were worried about competitors copying our technology, that most everyone will ignore anything truly useful that we might develop.

There are serious problems with expecting technology to transform industry productivity again, as has happened twice in the history of travel automation. Almost everyone is so absorbed by the mythology of surrounding popular devices and the online world that few developers really know what productivity enhancements to build.

The answers are not obvious, little help from the user community has been forthcoming, development is expensive and the risk of failure is great.

Equally as important is the unrealistic pricing and user expectations that are pervasive in travel technology.  Where developers cannot reasonably expect real financial returns and sensible ongoing support commitments, it is difficult to find the basis for worthwhile new projects.

There is no alternative, however to diligently seeking productivity improvement.  Even very modest increases can yield enormous financial benefit. Developing automation solutions that are effective, sustainable, and that can truly be used to increase basic productivity without requiring a higher overall skill level should be a standard by which travel technology is measured.

Present travel technology gadgets usually focus upon correcting the deficiencies of other systems.  Reengineering, used in the sense of defining new and better methods rather than simply staff reductions, has largely bypassed travel distribution.

The industry usually looks at illusionary productivity standards and hence achieves illusionary results–what I refer to as digging and then falling into a productivity pit.

Productivity Through Compromise

If you diminish overall workloads you create the impression of being more productive.  Such tactics, as an example, are tried by those who eliminate quality control steps for certain segments of their business.

Productivity Through Redirection

The travel industry has been training itself to believe that the most efficient way to make reservations is for managers and executives to use what are often inferior tools to do the job themselves–and become the company’s highest-paid, bad travel agents. People and systems do not become more productive simply because direct service charges are lowered and work distributed over a larger and more expensive labor pool.

Productivity through Weird Science

So-called artificial intelligence, knowledge-based systems, or automated booking systems occasionally pop-up as productivity solutions.

Aside from the fact that the technology most developers employ is of questionable worth, such projects can only be classed with traditional tools that try to correct older system deficiencies–none as yet has tried to reengineer the basic elements of travel agency inefficiency.

This reengineering looks like:

  1. Tools that assist in getting work right the first time or that transfer meaningful functions wholly to automated systems.
  2. Delivering true customer service (defined as the ability to organize product presentation so as to give people what they really want to buy).
  3. Organizing decision support so that knowledge relating to customer service is equally and readily accessible to experienced and inexperienced operators and can empower correct business choices.

Finding and implementing productivity solutions isn’t easy, but they may mean the difference between survival and failure–where competition promises even tighter margins and increased costs.

 

The Cynic’s Guide to Travel Industry Surveys

The travel industry remains awash in bad data, ill-conceived and poorly executed research projects. Some of the biggest and best known travel and research companies are the worst culprits, with the ever-present survey as the typical platform of choice.

Here is a quick outline that will help you identify bogus research when you see it. These points may sound extreme, but they represent only part of the standards serious researchers might impose. They are really quite simple to understand and appreciate.

The implication here, in case you missed it, is that most travel industry research is not serious. As you consider what the latest survey quotes are teaching you, the appropriate conclusion may well be “nothing whatever.”

 1)    Context

Serious researchers do not cite random figures without explaining where they came from, why they are relevant, and where you can read them in their original setting.

When you hear comments such as “travel costs were 3% lower when using this method,” the lack of context most likely means that they’d prefer you not look at the source material or they can’t really cite effective references.

2)    Sample

Effective surveys involve carefully identifying what population is to participate, how these individuals will be reached, and then taking the time to contact and engage them. Researchers should explain how they obtained their sample, how large it was, and how the sample size relates to the total population that might have been surveyed.

Surveys that allow participants to self-select might tell us something–but it’s almost impossible to discern what that might be. Another word for this is “useless.”

The sample must also be designed to answer the question as accurately as possible, not produce the answer the survey designer might like to see.

3)    Questions

Unless you see the question that was asked, the response isn’t especially instructive. Questions must be clear and unbiased (most are neither).

The phrasing of the question must also allow people who don’t have an opinion, or who think the question is silly (a distinct possibility much of the time) to avoid answering or select a neutral answer (one which is interpreted as neither positive or negative).

Good surveys shouldn’t force an answer where the individual has none–to do so imposes a bias on the result. Ideally, you should be able to review all the questions that comprised a survey.

4)    Tabulation and Method

Skipped questions are not “responses” to be interpreted however one desires. Researchers should describe the methods they employed to compile the data and interpret the conclusions.

The researcher should also be able to describe how accurate the survey is believed to be, based upon the size and composition of the sample and its relationship to what the survey is trying to describe.

Thus, a survey of a company’s travelers can be said to represent their views of all participate, or if the sample is sufficiently large so as to reflect the unbiased views of the majority. A survey of ten travelers from a population of 1,000 is probably not that useful.

An interpretation of survey results which claims that “travel costs were 3% lower when using this method” is only useful if we know the question asked, who answered it in a way that supports the 3% claim, and why the responders are representative of anything in particular.

Researchers who don’t describe their methods probably don’t have one that they would like you to examine.

5)    Biases

We should know who paid for the survey, who created the questions (an independent researcher or the sponsor) and what they survey was designed to determine. The answers may not have influenced the result, but potential biases should be disclosed.

For further information please see my comments on travel industry research available here.

 

Open Travel and Industry Mythology

This analysis appeared August 12, 2013 in Cornerstone Information System’s “Insight & Opinion” section.


You may have heard of something called “open travel” or “open booking,” that is about to change corporate travel procurement. It says that travelers will book whatever they want as long as they don’t exceed budgets and fulfill other vague management requirements, such as paying with a corporate credit card.

Travel Management Companies will have to find new roles (no one is quite sure what those might be) and corporate travel managers will see their responsibilities changed, or substantially diminished.

Proponents of this new travel management strategy, which include some substantial travel buyers and data managers, assure us that travelers are buying where the want anyway, so clearly it’s best to make the best of the inevitable.

What’s interesting is that this isn’t new.

Prior to the mid 1980s, when consolidating travel procurement with a few designated travel management companies became popular, it was the default purchasing system–set your budget and let the rest take care of itself.

I’m confident that proponents of “open travel” believe that technology has advanced so much over the last 30 years that the essential management problems that resulted in consolidated travel management are no longer issues.

If we simply wait long enough, smart phones will solve everything–they’ll even change human nature.

Can Less Be More?

There are few analytical reports describing open travel’s effectiveness–those that do exist are contradictory and most are poorly executed(i). As a business strategy, open travel advances several logical fallacies that we should try to avoid:

Hasty Generalization

It doesn’t necessarily follow that because some, even most, travel management programs perform poorly and that they are at odds with new technology, that all such programs must do the same.

It also doesn’t follow that travelers in general will make informed and rational purchasing decisions absent a centrally managed travel program because some travelers appear to do so, for some of their trips, at least some of the time.

Open travel’s proponents need to conclusively demonstrate that the business rules they suggest the industry adopt are not based upon the behavior of a small sample operating under exceptional conditions.

Faulty Dilemma

Because there are clear shortcomings with travel management practice, we are not necessarily left with a “strength through weakness” strategy that allows travelers to book whatever they want as the alternative. There are other choices.

The Big Picture

Centralized travel management exists because it is effective. Vendors extend favorable pricing and other services to purchasers because they believe the benefits exceed the cost.

Part of what vendors presume is that travel managers will influence selection and behavior. Travel programs that consistently deliver such results are those that succeed.

Why would vendors offer similar benefits where buyers stop trying to do these things Control is an essential component of preferred pricing, and open travel is signal for higher prices, not lower.

The mythology of the travel industry asserts that technology allows individuals to find as good or better discounts in the marketplace as are available through managed travel programs.

Again, that’s nothing new, the assertion has been made for as long as there have been centralized travel programs. In practice there are always exceptional situations, but consistently poor discounts are signs of a poor travel programs, not testimonials for open travel.

Technology makes traveler shopping somewhat easier, but it doesn’t make informed buyers or change human behavior. Again with exceptions, travelers do not usually share the management goals of their companies–part of a travel manager’s role is to provide structure for those goals.

A traveler’s agenda is more personal and can always be validated by countless rationalizations and “this time is different” conclusions. There is no lack of creativity in this area.

To expect individual and company goals to align so as to correctly and consistently influence individual traveler behavior is to assume that people will stop behaving like people because they have better smart phone applications and are free to use them.

Open travel is less efficient than centralized travel management, not more. It assumes pricing practices that don’t today exist, people acting in ways they don’t normally do, and, even if these point are granted, that it is the best use of a traveler’s time to research prices and keep sufficiently informed so as to make good decisions.

It’s a theory that assumes much and delivers little.
(i) Unless a study describes a sound methodology, an adequate sample size, and the precise questions it tried to answer, which is almost never the case, it falls into this category. Please see my paper on this topic.

Corporate Mobile Travel Strategy

This analysis appeared June 14, 2013 in Cornerstone Information System’s “Insight & Opinion” section.


By now you’ve been thoroughly exposed to the idea that mobile applications (affectionately termed “apps”) are an essential part of travel technology. There’s no denying that mobile applications are popular, but understanding why and to what extent is more difficult.

Equally challenging is interpreting the specific implications for your business.

Business Case

Perhaps you’re as tired as I am of being told you “need” a mobile travel strategy, and it would be interesting to first understand what you could accomplish.

Proponents usually start building their case with surveys and research which suggest businesses without mobile capabilities risk being “overwhelmed” by competitors, as the number of people initiating travel transactions on mobile devices expands to eclipse all other methods.

This argument runs aground somewhat because almost all this research isn’t very good. Briefly, almost all popular industry researchers don’t disclose their financial backers and biases, or their research methods, and their products aren’t scientifically designed or operated.

We’re left to conclude that, from among the hundreds of millions of smartphones and tablets, consumers simply must be looking for travel products, even if specific numbers can’t be verified.

Competition among the literally millions of app developers is intense–for room on the device and consumer attention if nothing else. Of the dozens of apps on your device, how many do you really use?

Five or six is an oft-quoted number.

I’m not arguing against mobility or applications, just pointing out that the barriers to successful entry are significant, and assuming these are unimportant because the market must be huge doesn’t make it so, or drive travelers to use a mobile app simply because you offer it.

In the simplest terms, people probably use mobile applications for some of the following reasons:

  • Having a computer with you everywhere you go is certainly handy.
  • Most people didn’t do that much with their PCs anyway–the transition to mobile is fairly straightforward.
  • The apps can look and behave better than on a PC, because building tools in a web browser was never a really great idea.
  • Most travel vendors have made communicating with them so difficult and unpleasant that the simplest, handiest form of electronic access looks very attractive.

As you start thinking about a mobile strategy, consider carefully the real reasons you believe travelers will support it.

The Best Tool Is the One That Works

Corporate travel buyers are often presented a surprisingly sparse list of mobile application choices. Much of what is on offer doesn’t do much or work very well.

Consumers have always had a high tolerance for flawed travel technology–a frequent reaction being that, if it works at all, it works wonderfully. The basis for a successful mobile strategy might be to insist on delivering real value and performance to the customer.

Determine what the service and business needs of your travelers are, then look for products that can approximate those requirements with an acceptable level of change to your operation.

For example, if you’ve determined that travelers should be able to request, change, and reconcile their trips from a mobile device, be certain that the tools you select allow that to happen with very few failures, limited training, modest traveler effort, and acceptable recourse when things go wrong.

These sound like “everybody does that” goals, but in practice they are difficult. Don’t be coaxed into accepting marginal products simply because they’re mobile.

It appropriate to set more modest goals that support your overall service strategy and that you can successfully reach.

The Best Tool Is No Tool

The travel industry is often anxious to build solutions to problems that shouldn’t be solved. No tool, mobile or otherwise, can change the fact that most “technology problems” are really unresolved management problems.

Often your business goals are better supported by altering procedures and requirements to make problems go away, as opposed to looking for the latest apps that might solve them.

The distance between mobile applications and other computer-based tools isn’t very great, and no computer ever compensated for poor procedures and policies, unrealistic expectations, traveler misbehavior, or a failure to manage.

Mobility is best viewed not as the centerpiece, but rather as an intelligent and convenient enabler for your comprehensive product, service, and travel strategy.

 

IATA’s New Distribution Capability (NDC)

This analysis appeared July 15, 2013 in Cornerstone Information System’s “Insight & Opinion” section.


In an industry as diverse as travel distribution, there is rarely a shortage of controversial ideas. Recently, critical voices have been raised against IATA’s “New Distribution Capability” (NDC) initiative, variously asserting that its development was closed to most outside input, that it is unfair to travel agents, technology providers, and other stakeholders. It is claimed that the NDC harms consumer interests, and that its implementation requires unacceptable privacy compromises and financial expenditures from distributors and consumers alike.

Curiously, I’ve yet to hear the simplest and most concise justification for opposing the NDC from anyone:

It’s a fundamentally bad idea that probably won’t work.

As these posts must necessarily be brief, I’ll only touch on a few of the NDC’s strategic and business flaws–operational and technological shortcomings must await another discussion.

What Is the NDC?

According to IATA1 the NDC is a business and technological initiative best understood as a process that allows “indirect channels” to enable the same capabilities that exist on airline websites, while preserving an airline’s control of the product. It also proposes to enable product innovation, differentiation, and personalization by directly accessing expanded information as to a traveler’s purchasing profile and history.

The NDC’s “initial scope is the shopping process.” As an example of how this might work, supporters maintain that the NDC will modernize air travel distribution and benefitconsumers by giving them an experience similar to Amazon.

Perhaps, but the NDC mistakenly confuses multiple goals in a package that delivers capabilities few people want. It’s technical features represent one way, certainly not the only or necessarily the best, to enhance shopping data. Other intended benefits are more dubious.

Amazon is a poor service delivery model–air travel distribution has little to do with selling books or consumer products.

The personalized shopping experience, whether through Amazon or an airline, is largely a chimera without real-world application. Frequent Amazon shoppers are aware of the annoying and usually irrelevant suggestions the site continually offers–transferring this unhelpful dialogue to benefit air travel strains the imagination.

One Bad Idea Begets Another

IATA is criticized for failing to adequately consult with distributors and consumers as the NDC was developed–perhaps justly so, although interpretations disagree as to how meaningful the prior industry dialogue was. It’s worth noting that however worthwhile these discussions might have been, IATA isn’t obliged to hold them in any particular way, or to do so at all.

There is also a serious question as to who might participate. There are no industry-wide trade associations with adequate technology capabilities, credibility, and resources to represent even segments of distributors or consumers. Individual companies may have meaningful input, but are not in a position to speak for anyone else, or even their own customers.

Industry discussions to develop and refine technology policy are exceedingly rare–much more so that IATA’s critics would have us believe. Those who feel excluded would do well to upgrade the forums, expertise, and messages they might use to make meaningful future contributions.

Who Benefits?

Shouldn’t airlines know more about the consumer prior to booking so they can “personalize” the product offering, as the NDC promises?

If that were so, it should be easy to describe what that “personalization” would look like–but it isn’t. Beyond the vague “more like Amazon” promise, “personalization” sounds like a more technologically advanced bundling of the many obscure fees and charges no one likes or wants.

If the result isn’t higher consumer costs, what is it?

Many airlines have had access to personal data that were supposed to enable better offerings for decades (through frequent flyer programs, for example). The fact that these enhancements have been meager causes consumers to rightly question whether the new expense and privacy compromises the NDC imposes are justified.

The New Distribution Capability proposes to solve problems most consumers don’t see as problems and deliver ill-defined benefits they haven’t asked for and probably won’t appreciate–at an undetermined cost they are unlikely to embrace. Wholly apart from the clumsy way it has been developed and presented, this is not a formula for a successful project.

IATA was ill-advised to start down this path and its airline participants are likely to see more customer grievances, direct and indirect program costs, and few of the NDC’s promised benefits.

  1. International Air Transportation Association (IATA), NDC Update, November 2012, page 8.

Five Important Technology Projects You Should Watch

This analysis appeared May 17, 2013 in Cornerstone Information System’s “Insight & Opinion” section.


However risky, making technology predictions is a popular and occasionally enlightening pastime. I’ve found it helpful to have a “watch list” of projects and products that might be influential or require some business strategy adjustment.

Here is my current travel industry-related list, in no particular priority. I’ve indicated why I believe each is important and what the effects might be. Some obvious choices such as IATA’s NDC initiative are omitted as they are the subject of future posts.

The Signal and the Noise

The title of a 2012 book by Nate Silver on statistical predictions and why they fail, this term refers to the fundamental engineering and scientific concept that, in order to perform any sort of reasonable analysis, it is necessary to distinguish between what is to be measured (the signal) and background noise.

In travel technology, it is frequently helpful to make similar differentiations to distinguish between what is truly important and what simply sounds important. There are innumerable noise-makers throughout the industry telling their own versions of what deserves our attention.

Three important tests you might use to validate such assertions are:

  • Why is this really important to more than a few people?
  • What is the time frame over which it might become important?
  • What special conditions might have to exist to make it important?
  1. Computing Platforms and MobilityWhile it’s true that consumer attitudes toward smart phones, tablets, laptops, and desktops are evolving, no one knows specifically how. People replace laptops with tablets partly because they enjoy their added mobility, but also because it isn’t a great sacrifice as most didn’t do much with their laptops anyway.
    It doesn’t mean that laptops and desktops are going away (there are things you simply can’t do on a tablet) but the consumer mix will certainly change.
    Experts have been predicting that mobile computing will revolutionize travel purchasing for so long that it eventually might happen–once the public can get past the fact that most mobile travel applications don’t do much.

    2.  ETS2

    The U.S. Federal Government’s new on-line travel procurement system, ETS2 is perhaps the least understood, most under-reported, and most confusing travel technology project to have taken place for decades. It directly effects thousands of people but is concentrated on those involved with government travel. Indirectly its influence on procurement practice and to some extent on technology design will be widespread and enduring.

    The travel trade press (on-line and print) earns an “F” for almost ignoring ETS2 over the past four years and for producing not a single insightful analysis of why the project evolved the way it did and what it means for the industry.

    3.  On-line Travel Agencies and Supplier Direct Sales

    Recently, by some measures, on-line sales to travel suppliers surpassed sales through online agencies. This is significant because the desire of travel vendors to deal directly with “their customers” is deeply felt and has been pursued by many suppliers for longer than The Internet has existed–it won’t be abating anytime soon.

    In a free market, people find ways to get at what they want. It would seem that more want what they perceive vendors can give them directly on-line than they can get on-line through intermediaries.

    4.  Social Media

    Sometimes people get the idea that whenever the Thor’s Hammer of Social Media is produced they must automatically lend their full attention and, should they choose to participate in the business schemes described, they are entitled to sit in some electronic Valhalla feasting on e-dollars with the gods.

    The reference to Norse mythology is not as far-fetched as it sounds: most Social Media projects are on similarly imaginative ground.

    Social Media are significant but, as with other electronic tools, you have to have real service-oriented products and something compelling to say.

    Beware those who tell you otherwise and look for projects that will enhance real business goals and deliver truly superior customer service.

    5.  Microsoft

    Pay attention to what Microsoft is doing, as it tries to keep pace with the direction its planners perceive the industry to be heading.

    Presently, this involves significantly changed consumer software licensing and delivery, changes to user interfaces and product design that most people didn’t ask for, and assumptions that you and I want the same “experience” on a tablet that we do on a desktop or a phone–I don’t; perhaps you do.

    The company’s size and scope mean that we can’t avoid its good and bad decisions, many of which can have expensive consequences.

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