The document discusses the shifting landscape of travel distribution as multiple paths co-exist and mobile becomes the dominant platform. It highlights how corporate travel has been challenging for direct distribution but trends toward open booking will enable booking through airline websites. Airlines must provide consistent customer experiences across departments to capitalize on opportunities in direct distribution and personalized mobile services.

1. The Future of Travel Distribution
February 12, 2013
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2. The Shifting Distribution Landscape
• Multiple Distribution Paths Co-Exist
• The Problem with Direct Distribution
• Mobile as THE Platform for Direct Distribution
• The Impact of Consumerization
• The Emergence of Mobile Smart Services
• Consumer Mobile Ecosystems
• The Alliance/Joint Venture Ecosystem
• The Threat of Mobile OS initiatives
• Summary
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3. Multiple Distribution Paths Co-Exist
Direct airline distribution enables greater personalization
Direct Distribution
Traditional Direct Connect Airline.com
Leisure TMCs
Meta-Search Meta & OTAs
Leisure Distribution CBTs
OTAs Platforms
Personalized fares and
ancillary bundles
NDC
GDS
Merchandising engines
Multiple distribution paths will continue to co-exist
• Driving personalization based on customer value is a key airline driver
• Hybrid models where ancillaries are sold direct while primary air
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reservations continue to be driven through the GDS may enable co-existence
between models

4. The Biggest Challenge with Direct Distribution
The Corporate Traveler
Why?
• Fragmented Market –Thousands of TMCs worldwide
• TMC/GDS have entrenched relationships (financial & processes)
• Corporate Travel Manager turnover and shift to procurement
result in a lack of C-Level understanding around distribution
• Lack of clear corporate benefit
.
But… this is all changing as…. 4

5. Mobile becomes THE Platform for Direct Distribution
Mobile is not simply a customer touchpoint but the new
platform for direct distribution
Mobile Timeline
1980s 1990s Early June
2000s 2007 2008-2009 2010 2011-2012 2013 +
Mobile
Ecosystem
Within five years the concept of mobile as a separate
channel will disappear as the majority of travel search and
booking will be on mobile devices
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6. The Corporate Travel Market Direct Distribution Obstacles
Why the GDS will struggle to retain single-source role as the
market becomes increasingly fragmented
Single Source Fragmenting Forces
Proponents • HBAs
• OTAs
• Mega TMCs
• Regional/Local • LCCs
TMCs • Rail
• Large Multinational
Buyers • Airline Merchandising
GDSs continue an effort to capture fragmented
inventory, but HBAs, OTAs, rail and airline merchandising
continue to disrupt GDS aggregation goals.
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Source: Adapted from PhoCusWright's European Corporate Travel: Fragmentation and Technology Special Project

7. Consumerization is Driving the Mobile Trends
The traveler is driving the trend
• With significant smartphone penetration and adoption of tablets, travelers
have untethered access to travel content 24X7
Mobile Devices Apps Location-Based Services
• Millennials entering the market have different travel booking habits
• Visit 10.4 sources of online information before buying
• 75% have a social media profile
• 83% sleep with their mobile phone by the bed
• 84% say user-generated content has a real impact on their travel
decisions
Millennials • 57% update social media every day while traveling
Consumer travel habits and generational shifts are
.
impacting behavior and expectations for travelers
Source: Tnooz and American Express Insights

8. Differing Reactions to the Emergence of Consumerization for
Managed Travel
Consumerization of Corporate
Travel
Capture
Simplify
Prevent
Prohibit
.
Source: PhoCusWright's European Corporate Travel: Fragmentation and Technology
Special Project

9. Door-to-Door Simplification vs. Open Booking
Two different technology approaches pushing change for corporate travel
management
• Encompasses entire door-to-door • Allows travelers to book through
booking experience dotcom sites and receive corporate
• Uses expense insight to estimate discounts
expenses such as transfers, meals • Collects itinerary elements for duty
and multi-modal of care
• Simplifies the number of clicks • Flows all information into expense
needed to complete the transaction reporting process
These technologies are just emerging and it is unknown if either will have a
sustainable impact on managed travel .
.
Open Booking has the greatest potential to support airline merchandizing efforts
Source: Adapted from PhoCusWright's European Corporate Travel: Fragmentation and Technology Special Project

10. Open Booking
Supplier.com integration, TripIt itinerary aggregation and
supplier e-receipts form the foundation for a new managed
travel booking model
E-receipts flow into expense
report
Allows traveler to book at
supplier.com sites and still
receive negotiated discount
Feeds itinerary elements
into expense reports
Captures itinerary elements
from multiple sources
With the growth of Open Booking Airline.com sites have an excellent
opportunity to capture more direct corporate business integrating
merchandising strategies with corporate discounts
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Source: Concur

11. Not all Corporations are Alike
There are 100’s of 1,000s Small and Micro-Multinational
Companies Worldwide that will benefit from Open Booking
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12. Technology Enabling Smart Corporate Travel Services
Services that anticipate your needs are the future of mobile services
Consumer Interface Smart Services • To be effective,
smart services need
to work with all
points of traveler
Proactive Disruption Services contact
Smartphone • Truly smart
services will focus
on improving
service for
Driving Vendor Compliance disruptions, drive
You’ll Miss Your Flight
greater compliance
Tablet Based on your current and adoption, and
location and traffic
patterns, you will miss
anticipate services
your flight. Shall I book a based on multiple
later flight?
sources of
information
.
Pro-active Mobile Services
Source: Adapted from PhoCusWright's European Corporate Travel: Fragmentation and Technology Special Project

13. Airlines’ Mobile Focus and Challenges
Opportunities Challenges
Ability to integrate with corporate
Direct Distribution
goals and programs
Providing the right services to the
Personalized Interactions
right passenger at the right time
Airlines can use mobile technology for more direct distribution and
continuous customer engagement but offers must integrate with
corporate goals, be personalized and contextually relevant
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14. Additional Challenges
To be effective airlines must work across traditional silos to
deliver a single user experience
Siloed Nature of Airline Strategy and Execution
Distribution E-commerce Airport Revenue
Pricing
Strategy Marketing Loyalty IT Management Management
Mobile
Strategy
All these departments have role to play in customer
centric distribution strategy
Airlines can only use mobile technology for more direct distribution and
continuous customer engagement if all airline departments work in
concert to deliver customized, personalized services.
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15. Competing Consumer Ecosystems
Proprietary ecosystems are driving unique purchasing paths
Flight Search Hotel Finder
iTravel ?
Amazon
smartphone ?
Control
over mobile Local
Search
Customized Audiences
Amazon Travel?
Closed Mobile Consumer Ecosystems
.
• Though shopping content may be available across ecosystems – purchases are
often only available within the ecosystem (e.g. iTunes, Amazon video)

16. Airline Distribution Ecosystem
Airlines can create an unique ecosystem based on alliance/ joint venture
relationships
An airline mobile ecosystem may emerge providing unique content across
alliance/ joint venture airlines customizing the experience across airlines
VS
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The challenge remains to capture a competitor’s frequent flyers 16

17. Potential Impact of Mobile OS on Travel Distribution
Consumer Interface Intermediaries Suppliers
Pre-Web
Global Distribution
Traditional Travel Systems (GDS)
Agents
Web
Meta-Search OTAs GDS Direct
Connect
Online
Travel
Mobile GDS • Mobile OS
Meta-
Search providers may act
OTAs as the consumer
Smartphone gateway to all
. travel transactions

18. Summary
• Multiple airline distribution paths will co-exist
• Mobile is THE platform for distribution
• The corporate travel industry has been the major
obstacle to alternate booking paths
• The trend toward Open Booking will enable
corporate travel to be booked at airline.com sites
• Airlines must execute a consistent customer
interaction strategy across traditional
organizational silos
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