The Future of Travel Distribution and NDC’s impact in China · exploring distribution models...
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The Future of Travel Distribution and NDC’s impact in China
Transcript of The Future of Travel Distribution and NDC’s impact in China · exploring distribution models...
The Future of Travel Distribution and NDC’s impact in
China
Overview
Flightroutes24 Overview
Current Travel Distribution Landscape
Future Distribution – NDC ?
NDC’s Impact in China Market
Introduction • Launched in 2014, Flightroutes24 (FR24) is a leading China online air
consolidator and global flights marketplace
• Working with airlines (full service and LCCs), GDS (TravelSky, Amadeus,
Sabre, Travelport), and over 100 flight consolidators worldwide,
Flightroutes24 provides the most comprehensive and competitive fares to
OTAs, brick-and-mortar agencies, and other travel distributors
• Backed by Meituan-Dianping, the world’s fourth most valuable private tech
company (US$30 billion valuation)
• Flightroutes24 is also the flights partner for Meituan-Dianping’s B2C travel
business
Meituan-Dianping - China No.1
Life Service E-Commerce Group
Provide Life Service information
& Various Special Offers
2,800
Cities in China Active user
240 million
Per Year
600 million
users
35 million
Daily active user
4.5 million
Merchants
13 million
Daily deals
Food & Restaurant
14 years history
No.1 in the field.
Integrated Merchants
The largest holistic O2O Platform.
Hotel & Travel
Market
No.1
4 Main Business: Hotel, Domestic
Travel, Outbound Travel and
Transportation.
Users
70m
Food Delivery
Users
120m
Market Share: 42%
No.1 in the market
Maoyan Movie
More than 120 million.
More than 5,200 cinemas in China.
Keep the largest market share. Market
No.1
Market
No.1
Local Sub-agents
(Mainland China, HK,
Macau)
Flightroutes24’s Business Model and Contents
Global Partners
Mainland China and HK BSP
Contents
Global Consolidator
Contents
Airline Direct Connect Contents
FR24
Overview
Flightroutes24 Overview
Current Travel Distribution Landscape
Future Distribution – NDC ?
NDC’s Impact in China Market
Current Travel Distribution
Landscape • Today, four companies dominate the travel distribution landscape:
Amadeus, Travelport, China’s TravelSky, and Sabre, the original
company to develop this technology when it was a division of
American Airlines.
Current Travel Distribution
Landscape
Source: Amadeus/LSE
Current Travel Distribution
Landscape
Source: Amadeus/LSE
Current Travel Distribution
Landscape • In current model, every player is incentivized to continue to use the
global distribution systems — except the airlines.
Overview
Flightroutes24 Overview
Current Travel Distribution Landscape
Future Distribution – NDC ?
NDC’s Impact in China Market
Future Distribution –NDC?
• NDC = New Distribution Capability = Industry standard
• Balanced view, win-win-win equation
• For passengers – more choice of products and services, more personalization, and
more transparency
• Fill the gap – Direct vs. Indirect
• Revenue opportunity – Increased sales of ancillary products and services, product
differentiation, personalized offering
Future Distribution –NDC?
• The Airline builds & owns offer,
personalized for consumer
Future Distribution –NDC?
• European airlines over the last few years have perhaps been most active in
exploring distribution models outside the global distribution systems.
• Lufthansa placed a surcharge (about $16) on global distribution system
transactions made by travel agencies in 2015 in an attempt to shift bookings to
other channels.
• British Airways added a similar fee (about $11 per leg of a trip) in 2017 on bookings
made through Sabre, Amadeus, or Travelport. These airlines are, for the most part,
looking to reduce their distribution costs.
Overview
Flightroutes24 Overview
Current Travel Distribution Landscape
Future Distribution – NDC ?
NDC’s Impact in China Market
NDC‘s Impact in China Market
• A senior executive associated with a foreign carrier says:
“TravelSky is a critical player in the entire chain and their role, their influence can’t
be ignored (when it comes to how a transaction eventually shapes up in the
ecommerce environment).”
• Technically it is possible to do it (to bypass the GDS), but TravelSky in a
monopolistic position so the game stays the way it is in China.”
• In the markets that are heavily regulated, carriers are finding it tough to implement
the DCC.
• Even though TravelSky has been working on a couple of projects around its CDP,
progress has rather been slow.
Thank you for your time
Address:
Room 525, No.9 Keji Road, High-tech
Park, Nanshan District, Shenzhen,
Guangdong, China
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