the evolution of travel retailing and...
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The evolution of travel retailing and distribution
Jorge VilchesSenior Vice President, Air Line of Business
23 April 2018
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Increase in air traffic
GMF 2017: 4.4% growth p.a.GMF 2000 forecastHistory
World annual traffic (trillion RPK)
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Travel market trends globally
BRICK & MORTAR
OTA
83%
17%
20082017
ESTIMATED
76%
24%
FULL SERVICE CARRIER
LOW COST CARRIER
80%
20%
72%
28%
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16%
17%
18%
20%
21%
22%
24%
11%
12%
13%
14%
15%
16%
17%
73%
71%
69%
66%
64%
61%
59%
2015
2016
2017
2018
2019
2020
2021
Supplier Direct OTA Offline
The Middle East travel landscape
69.8
74.0
79.3
85.9
93.1
100.4
107.8
27%
29%
31%
34%
36%
39%
41%
Channel Split Travel revenue(billion USD)
Onlinepenetration
Source: Phocuswright
CAGR8%
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Airline revenue mix continues to change
Global revenue and ancillary sales per passenger boarded (PB) trends
Total Revenue/PB
-1% CAGRPAX Revenue/PB
-2% CAGR
Average airfare
decline in the past 10 years:0.9%
per year
Ancillary Revenue/PB
+38% CAGR $-
$5
$10
$15
$20
$25
$-
$50
$100
$150
$200
$250
Sources: IATA, , IdeaWorks
2
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Upsell
Ancillaries
Differentiate value proposition
Merchandising & personalisation
Reduce costs
What airlines want …
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Upsell & cross-sell
Deliver unique, personalized experiences
Build loyalty
Efficiency & automation
What agencies want …
Content
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Expectation set: 24/7 mobile access
5B Mobile phonesworldwide
Expectation set: personalization
35%sales from recommendation engine
Expectation set: choice and speed
87,000 drink combos
Expectation set: winners use data well
33M “versions” of Netflix
Travel brands are pushed to meet expectations set by non-travel brands
Expectations created outside of the travel experience
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Personalized,tailored offers
Convenience and choice
Flexibility
Self-service
Seamless end-to-end experience
What travelers want …
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WHAT IS SABRE DOING
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In one minute…
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Platform capabilities enable next gen retailing & distribution
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New Distribution Capability (NDC) is an IATA-defined data transmission standard that allows for enhanced
retailing of air products along the entire travel value chain
What NDC is…
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… and what it isn‘t
NDC is NOT a commercial model or a new retailing solution.
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A modern digital platform
• Limited flexibility of offer/display
• Structured• Filing driven
Today, travel retailing is tied to legacy processes and systems
• Intelligent• Dynamic• Custom/person
al
In the future, airlines are looking for a modern digital and channel management experience
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Traditional air shopping
DIRECT
Schedules
Availability
Fares
INDIRECT
(offer creation)
The aggregator/GDS creates the offer
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Air shopping in the NDC world
Request
Direct GDS
Offer
NDCoffer
The airline creates the offer
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