Going Direct

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The Lufthansa Group and Tourvest Travel Services have unveiled the first New Distribution Capability (NDC)-capable Direct Connect solution in the South African market. As the first TMC in South Africa to fully implement Direct Connect, Tourvest will receive Lufthansa Group content using a new NDC-capable distribution channel. Editor Dylan Rogers sat down with Dr Andre Schulz, Lufthansa’s General Manager in Southern Africa, Tourvest Travel Services CEO Morne du Preez, and Travelit CEO Philip Katz, to get more on this announcement.

Q: What’s the background to this move?

AS: It’s about content differentiation. It’s the way we can display specific sales promotions, individually, via different distribution channels, which we control, or we can also display our ancillary products in a way we want it to be displayed, in a way the GDS companies are not capable of displaying to the customers. At the end of the day, it’s about the benefits for the joint customer, between the airline and the TMC.

Q: Why Tourvest as your partner for this project?

AS: I believe the combination of Tourvest and its Travelit solution provides the most advanced online solution in the South African market.

PK: Technology is a wonderful enabler in the travel industry. It allows us to shorten the supply chain and it allows us to enrich the customer experience. The customer is at the centre of everything we do, and by fetching inventory directly out of key supplier systems, you get the best prices, the best availability, the best content, and the best information, which allows the customer to make an informed decision.

Q: Are you expecting other airlines to go this route?

AS: We’ve already seen it, with other airlines following this path after we started the process two years ago. British Airways and Air France are the more recent examples. I cannot speculate on what our competitors are doing, but I wouldn’t be surprised if there were more to come.

Q: What’s your response to the criticism that this just opens up yet another channel, as opposed to one consolidated channel or content source?

AS: In the past we had just two channels – the GDS and our own websites. In the future, yes, we’re adding another distribution channel with Direct Connect, but we totally understand the importance of the GDS distribution channel. So, looking into that diversity of distribution channels, I think it’s still fair enough to have the Direct Connect channel, in addition to the GDS channel, which is still the most important one for us. When we talk about individualisation and customisation, how do I approach the corporate customer, and how do I understand your specific travel demands and your travel needs. So, I need to have technology in place to understand data to understand what this specific customer needs.

Q: Would you argue, then, that your own direct channel allows the flexibility that the GDS does not offer?

AS: That was the trigger. We have ancillary products that we cannot display via the GDS. So, it’s about content freedom and content differentiation via our own channel, and having that flexibility that we were missing on the GDS. Yes, it’s a decrease in distribution costs, but at the end of the day it’s about content differentiation for the customer.

Q: What’s the future of the GDS?

AS: That role needs to be defined by the GDS, so you probably need Amadeus, Sabre and Travelport to answer that question. From our perspective, as the supplier, as the airline, we have created this new distribution channel that allows us to communicate exactly what we want to the customer. We do not neglect the GDS – don’t get me wrong. But we do get the flexibility we weren’t getting from the GDS. How the distribution landscape will look in five years’ time, we can only speculate. But, we have seen a lot of change in the last two, three years, so disruption is taking place.

PK: I believe the GDS is a vital component on the overall distribution platform, and it’s a very complex platform, with thousands of airlines, hotels, car companies etc. So, it’s really about finding the shortest path – but the most complete one, as well. I believe the GDS will survive and prosper, but it will have to redefine itself and evolve over time. Q: Do you believe the GDS previously had a ‘monopoly-type’ control over travel content?

MDP: As opposed to knocking one or the other, I would rather focus on the benefits of Direct Connect, such as: speed to change; being able to tailor-make a product to our customers’ needs; quicker and easier; being able to offer a lot more products to the client; productivity improvement; not having to jump between systems. That’s where we think the big gains will be. All we want to do is make sure we’ve got the best possible technology and offer our corporate customers the best possible value for money options. That’s what we will continue to strive for. What we are seeing out of this partnership, or integration, is definitely going in that direction.

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