Garner Research Projects 'Incremental' NDC Corp. Travel Progress

While corporate New Distribution Capability bookings in 2024 showed significant year-over-year growth, their share lags that of leisure NDC booking by 10 percentage points, with future progress expected to remain "incremental," according to a research report published Wednesday by Garner in collaboration with Accelya.

Garner—the advisory services firm offered by former American Airlines executives Cory Garner—estimates that 13 percent of indirect channel bookings in 2024 were via NDC. For travel management companies, NDC represented only 6 percent of bookings, while it represented 16 percent of bookings in leisure channels, including 20 percent of bookings by online travel agencies, according to Garner's research.

OTAs, of course, have some advantages over TMCs as far as NDC adoption. Their technology stacks generally are less complex, and their commercial models are more focused on hotel bookings and commissions, which makes getting the lowest-priced airfares a higher priority than it is for TMCs, whose clients generally are less price-sensitive. OTAs also have a significant head start, having started adoption of NDC about 15 years ago, compared with TMCs, which "began significant adoption post-Covid," according to the report.

Despite the smaller share, corporate NDC bookings did progress in 2024. Among Accelya's airline clients—which collectively generate about half of total NDC transactions globally—TMC NDC volume last year was up 146 percent year over year. Compared with 2022, the increase to 2024 was 500 percent. 

"This progress has been driven by several key factors, including the proliferation of content differentiation beyond just the lowest fares, advancements by third party technology providers like [global distribution systems] and booking tools, and the nascent growth of new entrant TMCs which, like OTAs, have much more control of their tech stacks," according to the report.

Those growth numbers do mean an "S-curve" model of growth is coming for corporate NDC, due to the complexity of TMC tech stack configurations. It's not a matter of even thinking of one TMC at a time but should be "understood as a collection of many, much smaller S-curves that map to a sub-TMC level for each tech stack configuration they support," according to the report.

"The progress will continue to be incremental, and it will continue to be a lagged response of the content differentiation that's been put in the market over the last couple of years," Garner said in an interview with BTN. "The corporate market doesn’t respond on a knife-edge cutover to NDC, as we've seen."

That was illustrated over the last few years by American Airlines' aggressive but ultimately back-pedaledapproach to NDC, with large portions of content removed from and eventually restored to EDIFACT channels. With such approaches "out of favor" at the moment, "airlines might be going underground a bit" on their content differentiation strategies, Garner said. "We're entering a world that might be a bit more fluid."

An airline, for example, might reduce EDIFACT fares by class and route in "low-risk areas," determining their strategies "one shop at a time" rather than making broad announcements, he said.

The regular flow of NDC announcements by airlines, GDSs and aggregators is not indicative of a coming spurt, either. The report notes each integration takes some time to mature, as Accelya said much of its growth has come from airlines with NDC production in place for at least a year. Amadeus Travel president Decius Valmorbida gave a similar indication in the company's recent earnings call, saying less than half of the 70 NDC agreements it has with airlines have been implemented and that NDC bookings as a proportion of total bookings are expected to remain below 20 percent "for quite a while."

The report added that buyer adoption will be key for continued growth.

"The first generation of early adopting buyers were indispensable to the modernization of the tech stacks they use," according to the report. "The challenge is that more tech stacks remain, and most will require a similar heavy lift. If a second generation of early adopting buyers does not emerge and become equipped for the complex work ahead, the industry may not receive the necessary push from both ends of the market to continue its forward momentum."

Emerging Benefits

The report also tackled the frequent criticism about the promise of NDC not be realized, specifically around the low availability of personalized offers and dynamic bundles the technology was meant to unlock. The criticism "is like a person living in a world with no air or water complaining there is no cake," according to the report.

Rather, the report highlighted "tangible benefits" brought by NDC in "a corporate market in need of much more fundamental change."

One of those is cost savings, which the report illustrated with Navan's analysis last year that showed savings as high as 16.6 percent per airline via avoiding GDS surcharges and getting access to a higher range of fares and price points. The report also highlighted AmTrav's similar report of savings during American Airlines' aggressive content differentiation strategy. 

Beyond cost, Garner's report said NDC's ability to consider a traveler's frequent flyer and corporate status up front has been an additional benefit. Seat selection is a prime example, with travelers avoiding the frustration with EDIFACT bookings of selecting a seat and then arriving at the airport to find that they do not have that seat because it wasn't communicated or they didn't have the status to reserve it, Garner said.

While some buyers have reported servicing challenges with NDC bookings, Garner said the research shows "NDC supports a better servicing experience, not worse" due to simplified workflows compared with EDIFACT. The report cites Navan VP of engineering for travel Ian Fette, who said 80 percent of changes in its booking tool for EDIFACT bookings were self-service, a figure that is in the low 90s for NDC. The report also cited Blockskye's report that Kayak for Business travelers on itineraries with Blockskye's Connected Suppliers were able to cancel or rebook flights without agent assistance 99.5 percent of the time during hurricanes Helene and Milton last year. 

"The opposite perception was created by improperly implemented NDC connections before," Garner said. "A lot of NDC implementations in the corporate market have been implemented as a built-on, on the side and not integrated with the whole stack, and that creates a lot of inefficiencies. When NDC is fully integrated into the main stack, there are fewer steps to making changing to itineraries, more of those scenarios can be automated and things like automatically applying storm waivers can occur."