By Clive Ashmore Butler, Chief Customer Officer at Atlas
LCC distribution is changing – in Europe, at least.
Last month, I joined our European team as we journeyed across the continent to meet with customers and partners. We started at ITB Berlin (as a first-timer, I was blown away by its scale!) where we had a chance to hear from many industry players – on stage and off stage.
In the following weeks, we visited a broad array of industry leaders including global and regional OTA’s, tech platforms, and start-ups.
There are some trends and patterns in the industry that indicate a continued shift in how travel sellers are thinking about LCC distribution in 2024. Some themes were consistent across the spectrum, no matter if speaking to a global seller or a niche tech provider.
Here are some of my observations and takeaways from my recent travels.
Clive is a travel industry professional with over 20 years of experience across APAC and Europe. Before joining Atlas in 2023, he delivered revenue growth and built strategic partnerships at Jetstar, Qantas and Scandinavian Airlines. As Chief Customer Officer at Atlas, Clive is responsible for shaping and delivering our strategic commercial proposition for customers worldwide, leading our Sales, Air Content, Growth and Customer Solutions & Operations teams. He is based in Singapore.
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Trend 1: Quality becomes a priority.
The quality of content is becoming significantly more important across the travel seller spectrum.
After many years of focus on on providing the cheapest fares, this year, quality and performance were central themes. In a highly competitive market, low fares are still desirable, of course; but there is a growing understanding that content must also be accurate and reliable.
There are many aspects to quality that travel sellers care about, such as:
- Technology performance (search speed, bookability, fulfillment);
- Pricing accuracy (including round trip fares and ancillary products);
- End-to-end customer support and servicing.
Quality is key to attracting and retaining customers, shaping brand loyalty, improving customer experience, and managing operational costs.
This increased focus on quality already impacts the low-cost content distribution market as it becomes more contestable. Travel sellers no longer want to rely on one LCC supplier, as it was in the past. They are seeing benefits from adding more providers who deliver high-quality content and do it well from start to finish. Sellers are now open to trying new providers for better content, superior technology, and proactive, collaborative approaches.
Trend 2: More data, better data, secure data – powered and unlocked by AI.
AI is all the buzz in 2024. At ITB Berlin, it was probably the main theme, with industry players sharing their vision for how AI will change the world of travel.
Off-stage, travel sellers speak about their need to harness data to elevate the customer experience for travelers. Modern travelers want to purchase travel as easily and conveniently as they buy any other product online. To keep up with these expectations, travel sellers need to provide an exceptional shopping experience.
AI has the potential to deliver this elevated shopping experience through more accurate pricing, personalized content, faster response times to customer inquiries, and insightful recommendations throughout the shopping process. Data can also offer businesses insights into their own performance and industry benchmarks, allowing them to identify areas for growth and address existing bottlenecks.
However, very few travel sellers have the capabilities and capacity to invest in this area. It is another reason why travel sellers currently reassess their existing supply chain and search for new partners: in a fast-changing market, the quality of content must be matched by the speed of delivery.
Partnering with suppliers who already have AI-fueled solutions and can offer data-driven insights is a way to win the race and deliver exceptional customer experience (CX) today, not tomorrow.
As the regulatory requirements in data protection become more and more stringent, travel sellers become more vigilant about data compliance and security measures. Supplier’s maturity in this area is an important factor in selecting a provider. Knowing how to apply AI and machine learning won’t be enough to seal the deal – suppliers will need to demonstrate that their systems and technology are secure, too.
Trend 3: Selling LCCs is no longer simply about content – end-to-end service and support need to be on par.
Routes, basic fares and checked baggage are not enough anymore. Travelers are becoming more sophisticated, and travel sellers are responding by investing in their CX through expanded ancillary and servicing capabilities. This way OTAs can keep customers on their platform, instead of redirecting them to airline websites. Airlines have also heavily invested in this area years ago, and travel sellers are playing catch-up – but they are moving fast.
Technology-savvy LCC providers will have an advantage in this area, as many functions can – and will be – automated. AI will come in handy here, too – with machine learning capabilities and improved language models many standard requests can be addressed in seconds, without language barriers, and across all time zones.
End-to-end customer experience becomes a major focus for OTAs – and their suppliers, too.
Understanding these trends is crucial for all players in the travel ecosystem – LCC’ s, travel sellers, technology providers, and everyone else in the mix.
This new business environment leads to significant shifts in the market dynamics. LCC suppliers are perceived not just as content providers, but as business partners who can bring value across many aspects of partnership – technology solutions, product innovation, data and insights, and more.
What is Atlas doing about these changing expectations and market demands?
These emerging trends are aligned with our vision for the industry, with a focus on quality and exceptional customer experience. We are already working on some cutting-edge solutions across all these areas, and our partners’ feedback sparked many more ideas on how we can transform the distribution of LCC content.
There is a lot of work happening behind the scenes, and I can’t wait to share more about these innovations in the coming months.
It is an exciting time for our industry, and we love being a part of it!
