Ai Editorial: What’s the secret behind Airbnb’s end-to-end travel platform?

First Published on 12th March, 2019

Ai Editorial: Rather than being an avenue only for accommodation, Airbnb is evolving to be an end-to-end travel platform. Ai’s Ritesh Gupta understands what is being done to power all of its verticals.  

 

In the second half of 2018, Airbnb made a couple of big announcements – crossing the 400 million-mark in terms of its total guest arrivals and 3.5 million guest arrivals in a single night in August. Earlier this month, the company stated that it has over 6 million homes. Airbnb is expecting half a billion guest arrivals in Airbnb listings by the end of first quarter.

A question that is being probed is - how Airbnb is gearing up to take the so-called network effect to the next level as it goes deeper into the booking funnel.

As it develops into an end-to-end travel platform which essentially means focusing on where to stay, what to do, and how to get there, what this would mean for the traveller?

Airbnb is definitely one of those brands that the entire fraternity believes can provide a better answer to the fragmented travel shopping experience. The way Airbnb goes about uniting its staff/ teams across product disciplines, making the most of “creative hacks” or managing complexities associated with product designing, it can provide an answer to when to travel, where to go, and what to do on trips.

Thinking like a traveller through “entities and relationships”

The best part about Airbnb’s platform is to let travellers get closer to taking a decision.

This means that Airbnb is coming up with the best possible result for users on its platform when it understands their intent. This is going to be based on setting up an environment for accessing structured data and enabling users to enjoy their trip planning and buying by a gamut of choice being presented to them. In order to attain this, the expertise of engineering and data science comes into play. The value of context i. e. to ensure content served or inventory presented clicks with the user.

For this to work, as explained by Airbnb, it is imperative to work on a meticulous way of ascertaining relationships between discrete but related entities such as cities, activities, cuisines, etc. Queries of users would be answered aptly or precisely by storing details about entities and the association between them.

To work this out, Airbnb has been refining its knowledge graph to classify its inventory and contextualize the entire platform. The focus here is on storing and serving structured data that connects what makes Airbnb’s inventory distinctive, what travellers are searching for, and what is there to be explored or availed. The concept of knowledge graph isn’t new. For instance, Google’s knowledge graph intends to offer precise information in response to users’ search queries, within the shortest possible time.

Generally relational databases store data in tables. Tables can shape up to have massive details, and have an array of columns and records. Pointing an issue with this, Airbnb mentioned that  there is an “operational burden when you have many table for distinct objects that may contain the same relational information in individual columns”. Referring to the utility of the graph structure, the Airbnb team says structuring queries in terms of this graph paves way for optimal data semantics maintenance. Citing an example, Airbnb referred to surfing – as an experience it should be the same surfing that a destination like Hawaii is known for. Such structuring around the relationships between the entities provides the scalability and flexibility needed to expand categorization to any number of things, mentioned the team associated with this project. This helps in avoiding duplicate data. The taxonomy in the knowledge graph has been applied it to classify all of available inventories at Airbnb.

One of the highlights of the graph is presence of nodes (could be entities such as restaurants, experiences etc.) and edges (the sort of relationships that exist between the entities). There are various types of nodes for diverse set of entities and different types of edges for different types of relationships (located in, tagged by, etc.). The team also acknowledges that an initiative like tagging restaurant with the relevant nodes isn’t easy.

“From there, we have a flexible API to query for neighbors connected by certain types of relationships and can index our inventory items by the unique identifiers of their corresponding representation in the knowledge graph,” according to Airbnb.

Airbnb asserts that this is a solid foundation to understand what one’s trip possible could be all about. Be it for designing of the interface, how the options are going to be presented to actually working on contextual travel insights to users in the booking flow is a fascinating journey. The action that a user can take could be finalizing a location to travel, a home to book etc. It would be worth watch how Airbnb shapes up this foundation further to add more trip essentials and excels in its quest of becoming an end-to-end travel platform.  

 

Hear from senior industry executives about how the industry is looking at offering the “end-to-end journey” solution at this year’s Ancillary Merchandising Conference, scheduled to take place in London, UK (9-11 April, 2019).

For more info about Ancillary Merchandising Conference, click here

Follow Ai on Twitter: @Ai_Connects_Us

 

Ai Editorial: How to make data count?

First Published on 27th February, 2019

There are airlines that have embarked on the data-driven journey, and they are increasingly relying on the same to serve their passengers during various phases of their shopping and travel, writes Ai’s Ritesh Gupta

 

Airlines are focusing on today’s digital economy, and an integral part of the same is being adept at managing and acting on data.

There are certain airlines that are on the right track, and there are those that seemingly grapple with basic issues. Those who have embarked on the journey and are garnering positive results refer to few critical aspects:

  • Drawing more value from data means taking care of several hurdles: data inaccessibility (owing to unstructured and semi-structured data), the quality of data, and the lack of skilled people to show the way and capitalize on it.  
  • In addition to working on an apt architecture to access data across siloes, it also important to look at existing marketing stack and leverage a customer data platform for all contextual business intelligence, recommends Boxever. 
  • Set up a cross-functional team. For instance, alignment between data engineers and scientists, and data-based customer teams such as user experience designers, marketers and product specialists.
  • Also, as IBM points out, put in place an analytics foundation to ensure compliance, security, and data quality, and focus on a data-driven culture.

Tangible results from data

There are airlines that have embarked on this journey, and they are continuously trying to serve their passengers during various phases of their shopping and travel. The likes of JetStar are blending real-time behavioural and the historical transactional data to act not only on past behaviour, but also evaluating possible purchasing pattern/ intent. The carrier is experimenting with datasets to predict intent to travel to destinations the airline flies to and have personalised marketing campaigns and website initiatives for each individual customer.

The meaningful use of data from various sources, including the 1st party ones, and contextual selling will open new possibilities that are currently unimagined, asserted Catriona Larritt, Jetstar Airways’ Chief Customer Officer in a recent interview with Ai. "That data and customer insights will lead to the development of new customer experiences, products and services that is more personalised and offered at the right time, on the right channel at the right price,” she said.  

The improvement comes from the fact that whenever a new data source is added to the strong foundation laid for data collection, ingestion, analytics etc., then it further improves upon the insights, recommendations etc. resulting from it. For instance, the gap as far as single view of the customer is concerned, lies in capturing emotional data or offline data. Once a way is found to capture such data, it will be added to the existing set up. 

Even as retailers are grappling and coming to terms with data privacy-related issues, if there is apt master data management, platform and architecture in place, then they can only improve upon this. For example, in case of airlines, the day of travel or the airport experience is where the consumption of the product commences in a tangible manner. There is interaction with the staff at the airport. This is where a passenger shares certain experiences or even the expectations of the journey. Now can this be captured? Yes. The technology is in place. There is an opportunity to avail a voice recognition tool to analyze and record a spoken conversation. This can be useful for airlines considering the typical fast-paced environment (marked by limited time period for each passenger) of an airport. Once airlines get closer to capturing emotional-data emanating from an offline environment, this means they can have better understanding of the travel cycle.

“We don’t capture conversations at the airport. Being clear with customers about what data is being collected is important,” shared an airline executive with Ai.

Once airlines get closer to capturing emotional-data emanating from an offline environment, this means they can have better understanding of the travel cycle since they already have an astute data strategy in place.

 

Hear from senior industry executives about the retailing and NDC at this year’s Ancillary Merchandising Conference, scheduled to take place in London, UK (9-11 April, 2019).

For more info about Ancillary Merchandising Conference, click here

Follow Ai on Twitter: @Ai_Connects_Us

 

Ai Editorial: Understanding Oman Air's NDC implementation journey

First Published on 22nd February, 2019

Ai Editorial: Oman Air has chosen a PSS agnostic middle ware as it finalized its offer and order management solution, and is ready with its NDC API. Ai's Ritesh Gupta understands how the airline is counting upon this move as a stepping stone for NDC implementation

 

The journey of gearing up for today's data economy and digital era demands deep introspection, especially in case of full-service carriers.

One aspect of this transformation is the domain-specific systems that are going to serve operational/ service and commercial requirements of an airline.

In this context, how airlines deal with legacy technology, opt for systems that are open and accessible, destroy data silos and old complicated message exchange systems, avail the NDC standard for a consistent front-end retail experience and then capitalize on it to modernize and simplify airlines’ back office functions, focus on their own APIs, sharpen data processing capability etc. becomes the key.

Each airline has its own journey for retailing, but the way all the carriers are going about crafting priced and interline offers, and ensuring there are no tickets in the future is where the role of Offer and Order Management system comes into the play.

On recent example is Oman Air opting to integrate the Offer and Order Management Solution (OfrMS) from TPConnects to enhance its personalized retailing capabilities and NDC-enabled distribution, with air and non-air ancillaries. Airlines are working with traditional means of distribution (via the existing fares filing and scheduling route) as well as stepping up their NDC channel, too.

If the partners are capable of consuming the complete NDC APIs, Oman Air is capable of providing NDC API at this stage.

"It's a transformation process for the airlines.  We have seen the aggressiveness in moving towards NDC@Scale (a minimum set of recognized capabilities to drive volumes of NDC transactions towards 2020) at Oman Air," says Rajendran Vellapalath, CEO, TPConnects.

Foundation for NDC implementation

For those focused on NDC, new certification levels or NDC@Scale are significant developments. As Rajendran mentioned, driving up volumes of NDC transactions calls for progress on several counts - technical set up, organizational set up, use cases etc.

Oman Air has chosen TPConnects' NDC Gateway middle ware offer and order management solution. It is being described as a PSS agnostic middle ware, integrated with all the user interfaces. The same offering, according to Rajendran, is a scalable, interoperable and SaaS platform deployed by other airlines, too, including Saudi Arabian Airlines and Air Mauritus.

In essence, Oman Air can focus on any number of travel sellers whether IATA - with the capability to report transactions to BSP/ ARC through IATA Financial Gateway (IFG) or NDC Link integrated to the middle ware, airline.com with a CMS, mobile application and corporate booking tool. 

"We provide airlines the capability to create their own NDC API out to any seller, OTAs or meta-search engines from the middle ware, which is also integrated with non-air components like hotels, cars, transfers, etc., mentioned Rajendran. Also, Oman Air is now equipped with a capability to push an offer from the middle ware to a passenger irrespective of which channel (user interface) the passenger uses depending on the value to the airline and personalized needs of the passenger.  

A middle ware like this is being counted upon as a stepping stone for NDC implementation.

A highlight is the utility of the user interface, along with reporting transactions to the BSP/ ARC airlines, that can replicate the existing capabilities which are currently available on the current traditional channel. "The traditional capabilities also include the multi-city travels, group travel management, after sales servicing etc.," said Rajendran.

As for being in control, he shared that merchandising can be managed from the middle ware including rich media, cabin fares, ancillaries, persona based business rules etc. Also, using the business rules at the NDC Gateway,  the airline can craft its own offers outside of the PSS currently and push the same to any channel.

He added, "In the first phase using the business rules on the middle ware the airline can start the basic personalized offers."

For example, setting up a business rule to provide x% discount or bundle an ancillary or offer a complimentary upgrade to a passenger with x amount of miles in a low load factor cabin flying from x origin to y destination  sold through xyz travel agency in a specific currency. Plus, during this phase, Oman Air can focus on rich media, air ancillaries and non air ancillaries. The airline would work with legacy technology and new NDC-based technology in parallel. "Since the middle ware is integrated with IFG (IATA Financial Gateway) any changes that happens outside of the filed fares at this stage is reported to the BSP/ARC using IATA Dish 22 format," he said.

This is where Oman Air stands - end-to-end offer and order management including servicing the passengers and partners.

In Phase 2, airlines will have the capability to have dynamic pricing depending on market complexity, internal factors like load factors, cost etc, value of passenger etc through upgrading the business rules on the middle ware. This will also have persona-based offers and order management, shared Rajendran.

"Airlines recognize the importance of amending the filed fares, packaging air and non-air ancillaries based on business rules they have opted for the BSP/ ARC reporting from the Middle Ware using IFG/ NDCLink," said Rajendran.  Oman Air has focused on complete shopping capabilities, and order and servicing capabilities including retrieve booking, exchange, cancel, voluntary and involuntary change, bundle and unbundle packages, report transactions to BSP/ARC and payment using credit/debit cards, BSP cash settlement, agency identification, miles and upfront cash deposit etc.

Expectedly, Oman Air is consuming interline through traditional ways at this juncture.

The role of agents

There has been discussion around the implications of NDC channels being introduced by airlines for travel agents. Agents can connect via NDC XML API or an approved technology partner connection, but these platforms typically do not have a customer-facing user interface (UX or GUI). Direct connectivity isn’t new, so how are agencies looking at this commercial association considering they have to prepare themselves?

"The various channels (APIs and airlines' own user interfaces) introduced by airlines is not going to help airlines to scale and generate NDC transaction volumes.  The sellers (travel agents) are already dealing with multiple screens and they will be least interested to switch between multiple UIs provided by each airline.  Out of the complete IATA registered travel agents, 99% of them doesn't even have a website today forget about booking engine to connect the NDC APIs provided by any the airlines," acknowledged Rajendran.

Considering the challenges, certain airlines in the last couple of years have been incentivizing the agents directly for using the NDC Channels (APIs or the user interface) and this in addition to implementing GDS surcharges. Rajendran categorically mentioned that travel agents should have their own supplier agnostic systems going forward.

NDC on track

NDC has been around for more than six years now, but it is making steady progress. "NDC@Scale is right on track," said Rajendran, who added that ONE Order will take some time as it's a major transformation project which will see major changes in 2020.

"NDC is new for airlines and travel sellers and it has major implications on their existing processes," underlined Rajendran.

Citing an example, he said his team is focused on supporting airlines with an implementation guide that is being constantly being updated, dedicated resources, established and documented registration process for NDC API access, new partner on-boarding policy, bug tracking tool, SLA in place on issue management (i.e. debugging, error solving, acknowledgement time) etc.

Rajendran is confident that as new offerings emerge for both airline and agents, such stakeholders are going to benefit from transformation underway.

 

Hear from senior industry executives about the retailing and NDC at this year’s Ancillary Merchandising Conference, scheduled to take place in London, UK (9-11 April, 2019).

For more info about Ancillary Merchandising Conference, click here

Follow Ai on Twitter: @Ai_Connects_Us

 

Ai Editorial: Making mobile app count - easyJet shows the way

First Published on 13th February, 2018

Ai Editorial: Rather than only focusing on incremental revenue, easyJet has been looking at ways to capitalize on what role mobile devices can play as assistant and in turn take care of tedious tasks that drain out a passenger because of uncertainty, writes Ai’s Ritesh Gupta

 

There are certain aspects of air travel that make it strenuous or uncertain. In this context, easyJet has excelled as a carrier, progressing with intuitive and simple mobile user experience (UX) to offer assistance where it is needed.

The latest move announced this week – availing augmented reality technology to let passengers scan their cabin bag and assess whether the same falls within the maximum cabin bag dimensions. The new app feature, which uses Apple’s ARKit 2 technology, is available on iOS initially and is a part of easyJet’s app. According to the airline, the scan itself provides an on-screen 3D box which when combined with the phone’s camera sizes the cabin bag and reveals whether it measures within the allowed dimensions.

Airlines selling air ancillaries including bags – be it for cabin bag or check-in luggage – isn’t new. Even in scenarios where airlines have been accentuating on the fact that they offer generous cabin baggage allowances, the onus is on passengers to ensure their bags/ luggage fits in the criteria. And this can make travellers anxious considering that there are times when one isn’t sure about the size of the bag they have chosen for travelling. easyJet intends to cut down on unexpected baggage queries on arrival.

Making mobile count 

easyJet has made steady progress when it comes to improving upon mobile interactions during various stages of a traveller’s journey. The way the airline manages its mobile app, which has now surpassed 30 million downloads, shows how mobile experience can be enhanced:

1.     Mobile isn’t just about incremental revenue: Airlines like easyJet have shown that the real opportunity lies in aiding customers throughout the booking funnel, be it for the dreaming phase, the booking phase, the day of travel etc. With easyJet allowing passengers to use their mobile app to allay their concerns, it not only simplifies the whole experience, but leaves a positive impact since the airline is leaving an impression of being an ally in this case. Also, revenue generation goes up as users find the app more useful. Travellers booked around 27% of all e-commerce bookings through the airline's mobile platforms last financial year, an increase of 4.5 percentage points over the previous year. The airline mentioned that this can be attributed to functionality and accessibility improving further. Taking notice of a cart abandonment and stepping up the conversion rate via a push notification, email or in-app messaging is important, but shouldn’t be the only focus. (As per the result for FY ending September last year, easyJet shared that ancillary revenue per seat increased by 11.7% to £12.71 (2017: £11.38)).

2.     Visualizing the journey experience on mobile: The blend of mobile design/ UX, capitalizing on intrinsic features plus emerging technology, can help in crafting intuitive experiences. Letting users to scan their bag is an apt example. Airlines know their product/ the travel journey inside out and by alleviating discomfort out of the monotonous tasks, they can benefit in a big way. Rather than leaving travellers look for help on 3rd party digital channels or even exploring things to be done on their own, airlines end up sharing vital information and ensure the ownership of the experience stays with them. According to the airline, 29% of customers used mobile boarding passes last year, up 4.5 percentage points from 2017.

3.     Connecting dots between what travellers are looking for: Late last year the airline introduced a feature on its app that allows users to instantly book flights after they share photographs they come across on Instagram. The tool merges the digital and real world, capturing the spontaneity of easyJet’s customers through an instantaneous image booking system. The feature uses advanced image recognition technology to identify the location and leverages Microsoft Azure APIs to match the photo to the easyJet destination. Once a user shares photos or download them on the easyJet app, then users are suggested the nearest airport. The carrier pre-populates the booking form with details.

4.     Stickiness of the app: Quite often travel e-commerce brands struggle with the stickiness of the app. Being a part of those 7-10 apps that are opened often isn’t easy for travel brands, but with features such as these airlines can give multiple reasons to a passenger to open the app. It is not uncommon to read tips about dos and don’ts when it comes to mobile apps even today. Brands struggle to keep the user experience succinct- struggle with the way they manage permission requests, push notifications etc. On the other hand easyJet has shown that with a virtuous design and apt tools that take care of the journey on the day of travel, passengers would build affiliation with the app. As the app is used frequently, travel brands can make the most of data trail (along with other 1st party data), airlines can strengthen their own ecosystem to truly understand where and why people are planning to travel. Once you have a user-specific data, you can understand the purchase journey and also what to recommend.

 

How is your mobile app faring? 

Explore the same at this year’s Ancillary Merchandising Conference, scheduled to take place in London, UK (9-11 April, 2019).This year’s theme - Getting your Customer Experience to be First Class!

For more info about Ancillary Merchandising Conference, click here

Follow Ai on Twitter: @Ai_Connects_Us

 

Ai Editorial: For dynamic pricing to work, what sort of leap is needed?

First Published on 28th January, 2019

Ai Editorial: The lure of banking on data sources and artificial intelligence to vastly improve on pricing for all channels in real-time can’t be ignored. But how can airlines, associated with the concept of booking classes and published fares over the years, take a vital step, probes Ai’s Ritesh Gupta

 

Calculating the availability of a seat in real-time and pricing what is to be offered accordingly is one of the most intriguing facets of the overall offer optimization.

The prevalent inflexible cabin structure or reservation booking designators is being termed as an irrelevant way of functioning in today’s digital era. As IATA asserts, every possible grouping of “service, price, conditions and customer restrictions are issued” by the carrier prior to any request even being made. These are then chosen and utilized at the time an offer is priced. The industry is attempting to overcome limitations, including the number of price points offered.

In fact, what airlines can offer isn’t just about a seat or an air ancillary. Dynamic Offer refers to a defined set of products and services, with a defined set of conditions, offered in real-time, on a one-time basis, and, in response to a request. IATA states it features contextualized and relevant offers, referencing who is making the request, Total Offer Management of both flights and ancillary products, and continuous price points.

What is being envisaged is – working on continuous pricing (the airline does not pre-define price points, prices are worked out in real-time based on particulars of a request and guided by data science) and dynamically managing the offer (including ancillary offerings; to dynamically working out several bundles, promotions and offers). There have been discussions around drifting away from distinct inventory and pricing processes, capitalizing on data sources not being counted upon and eventually banking on the prowess of artificial intelligence. Sophisticated retailing entails AI-enabled dynamic pricing, and this encompasses all channels, with the same for indirect channels being facilitated by NDC standard as airline would respond to every shopping request with a tailored offer. Since AI’s efficacy depends on the availability of the input data, capturing and processing of the data is key.

So where does the industry stand today? 

On one hand the industry is making progress, with travel technology specialists working on industry-specific systems that bank on behavioral economics and artificial intelligence (AI) algorithms and IATA’s standard NDC envisioning up all offers being crafted from airlines’ Offer Management System with no filed fares to be used. There are offerings that work in conjunction with both ATPCO-based fares as well as non-ATPCO fares managed directly by the airline. On the other, the decades old methodology of pricing an itinerary, for instance, in case of two full-service carriers combining to serve a passenger means that taking a big leap isn’t a straightforward task.

“Dynamic pricing is very complicated. There are a couple of pilots at this juncture (pricing engines with such capabilities starting to emerge or being developed today). The industry is getting closer, with specialists getting ready for implementation,” shared a source. “Implementations have different aspects to it though. Considering that an airline has a large portion of revenue being garnered via a GDS or features an interline partner (since airlines currently publish fares to specialized organizations managing fare and rule data which is accessed by entities like GDSs), then it would need filing of fares of pricing an itinerary. It's difficult to collaborate with interline and codeshare partners on joint itineraries. The indirect distribution systems rely entirely on booking classes and published fares. It would take a while for dynamic pricing to take full adaptation into the industry.” This aspect can’t be ignored as current functioning is deeply entrenched, since booking classes also feature in many associated processes - in corporate travel contracts, agency agreements, and interline and codeshare agreements.

One big leap 

So what can be the turning point?

The executive explained: “It would take one of the biggest alliances to do this. That would give a critical mass to dynamic pricing.”

“Airlines, as an industry, are unique in a way. They work with competitors to complete an itinerary of a passenger. If one airline can do dynamic pricing and the other can’t, then the former has to go to the lowest common denominator, which means it can’t be done. If both can do it, then dynamic pricing would attain depth. Till the point 2-3 big airlines move deeply into this, partnerships get formed with a certain level of sophistication, filing of fares would remain (for a considerable period of time).”

Retailing for airlines as desired in today’s digital era requires negating several challenges, and the list includes distribution and technological-related ones for all airline commercial systems. Other areas include change management, people with the right skill set and approach (for instance, growth mindset), and training people. But such transformation won’t be easy, considering reliance on booking classes and published fares. Also, as IATA also acknowledges, the implementation of Dynamic Offer Creation involves a parallel transformation within distribution and internal systems that will necessitate a different outlook and considerable financing in the time to come. 

 

Hear from senior industry executives about the retailing and NDC at this year’s Ancillary Merchandising Conference, scheduled to take place in London, UK (9-11 April, 2019).

For more info about Ancillary Merchandising Conference, click here

Follow Ai on Twitter: @Ai_Connects_Us

 

Ai Editorial: 3 considerations for laser-sharp API strategy

First Published on 23rd January, 2019

Ai Editorial: API connectivity isn’t new but airlines need to dig deeper while working on technical considerations and designing of APIs, writes Ai’s Ritesh Gupta

 

The battle for capturing data trail of consumers is an intriguing one. Making the most of 1st party data is imperative for every retailer, but considering the prowess of 3rd party biggies and travel intermediaries, airlines have to ensure they are ready to serve their traffic in the best possible manner.

Rather just relying on a handful of 3rd party sources for traffic, airlines have to collectively support fragmented distribution.

In this context, the role of APIs in sustaining agility and leveraging one's own data is under scrutiny.

"An API is just about moving data," mentioned Kevin O’Shaughnessy, CityHook, during one of Ai’s workshop in Long Beach, California recently.

Few recommendations from O’Shaughnessy: 

·          First rule of setting up an API is focus on it internally (organizations can run better with their own APIs. This way they can capitalize on data from their business applications and act on it for particular needs), then limited public API and eventually privileged services.

·          API means clear boundaries and ease of reuse.

·          APIs should be easy for developers to comprehend. This means designing them with clear uniform resource identifiers and non-complex data structure.

 

Commercial considerations 

Traditional ways of selling are being challenged and displaced by ecosystem models in which organizations compete and collaborate across multiple fronts. Organizations are gearing up to push a B2B business line via API to penetrate the market faster and leverage on the economy of scale thanks to high volumes generated by partners. API connectivity isn’t new but airlines need to dig deeper while working on technical considerations and designing of APIs.

Few considerations for airlines when it comes to API strategy:

1.     Open API: Airlines are working on open APIs, opening in all dimensions except the booking capability. Earlier there used to be concerns pertaining to unintentional impact of opening up APIs - the major one being the danger of losing out on owning the customer experience.  But APIs are being designed with clear uniform resource identifiers and non-complex data structure. At the end of the day, airlines can overcome limited number of coders within their setup and can leverage the prowess of APIs in engaging with 3rd party sites at their discretion.

An established carrier, in an interview with Ai, acknowledged that their open API could be used in several foreign markets including China, except the booking capability (which is being only trialed in a certain market).

This restricted approach in China, for instance not introducing booking capability via open API isn’t surprising considering the hurdles - there is a language barrier, a broad domestic ecosystem of potential API users that follow different approaches when developing digital platforms and end-consumers with China-specific consumption characteristics. “Although travel is a global game, we do not believe in simply extending existing offerings made in our local market, but in thoughtful tailoring to the local needs with our distribution colleagues that have a substantial knowledge of this important market,” shared a senior executive working with the same airline.

2.     UI-level API: There is an opportunity to boost the conversion rate via user interface (UI) level API. Specialists recommend offering a combination of both XML or server side request and UI widget. This means full UI all the way down through the technology stack is provided. The reason: when the UI and code associated with it enables one to continuously optimize the business and improve upon the attach rate along with the revenue metrics for that business which can be airline or any B2B partner that is taking the booking from travellers. In case, airlines use their own UI and only use B2B partner’s API, the partner may not able to influence the optimization of that UI.

3.     Supporting APIs with data processing: As for those airlines trying to support distribution via their own APIs, one shouldn’t underestimate what it takes to adopt and execute on a strategy of NDC API distribution. They need to sharpen their data processing capabilities in order to process in real-time the potentially huge volumes of valuable search data from NDC APIs. Airlines need to collect and process the recent search data across all their channels. They also need to have appropriate skills to analyze this data by market segment, formulate offers, set pricing and then adjust booking engine rules to deliver this at point of search.  This has to be a continuous process of set the rules, analyze the outcome and adjust.  In a NDC world this becomes dynamic.

 

Hear from senior industry executives about the role of APIs at this year’s Ancillary Merchandising Conference, scheduled to take place in London, UK (9-11 April, 2019).

For more info about Ancillary Merchandising Conference, click here

Follow Ai on Twitter: @Ai_Connects_Us

 

 

Ai Editorial: Lufthansa-Hopper pact exemplifies airlines’ focus on agility and AI

First Published on 21st January, 2019

Ai Editorial: Such initiatives underline the changing approach – be it for swiftly responding to the emerging technology or aligning the entire organization and yielding results for various stakeholders, writes Ai’s Ritesh Gupta  

 

Lufthansa Group’s decision to go ahead with an artificial intelligence (AI) partnership with Hopper exemplifies the fact that airlines, as an industry, are increasingly finding ways to get associated with technology companies/ start-ups plus counting on AI in areas of pricing - demand forecasting, price sensitivity and willingness-to-pay at the O&D market level.

As shared by Lufthansa, this collaborative research project with Montreal, Canada-based Hopper is about predictive analytics models and flight-demand forecasting. The plan is count on AI to gain an insight into customers’ preferences to come up with personalized recommendations about additional services or upgrades. Plus, Hopper will work closely with the Lufthansa Innovation Hub to expand into the European market. The foray is slated to commence in mid-2019. Hopper states that it predicts prices with 95% accuracy up to one-year in advance.

Being part of the digital space 

Such a move is indicative of the fact that airlines are increasingly breaking the shackles of running a legacy business. One of the highlights of going for an agile transformation is to involve executives from the parent organization from early on. For example, in case of Hopper, the team counts on machine learning and AI to precisely forecast flight and hotel prices and offers its users personalized recommendations at the optimal booking time, as well as alternative travel offers. For this project, Lufthansa Innovation Hub is going to facilitate the collaboration with the Lufthansa Group’s revenue management and distribution specialists. This is indicative of the fact that respective experts from the core organization are involved very early on. The practice of handing over completed works from one silo to another is being avoided.

In fact, by setting up an investment arm, innovation unit etc. and letting these independent teams to invest, incubate new, stand-alone digital ventures or finalize any other strategic alliance, airlines are earnestly assessing and commercializing business opportunities in the digital space. Internally, it is vital to work out the apt blend of people, technology, data and analytics to be ready for digital commerce. Without doubt, the route taken to agility is an integral part of the overall transformation that also paves way for selling in today’s digital world.

As highlighted in one of the recent articles, an integral part of agile transformation is finalizing people with the right skillset, then nurturing creative, cultural and processual freedom to prosper. In case of Lufthansa Innovation Unit (LIH), more than 90% of its team is from the start-up ecosystem.

Airlines are gradually joining the bandwagon of a corporate investing in start-ups.

“Over half of all US billion-dollar startups are backed by a corporate VC,” Christina Heggie, Investment Principal, JetBlue Technology Ventures shared during Ai’s MegaEvent, held in Long Beach, California late last year.

According to Heggie, the plan of action of the organization is as follows:

·          Scan world-wide startup ecosystem for innovations impacting the travel industry

·          Incubate and invest in emerging startups

·          Bring new technologies to JetBlue

Investment focus

There are multiple areas where these organizations are currently investing in.

One of them is AI.

Be it for evaluating what motivates travellers to search and book a particular journey to targeting new revenue opportunities, AI is influencing decisions.

Companies like Amadeus are looking at ways to predict travellers’ choices, and also testing methods to assess real interactions with a website in real-time and act upon it. For instance, search inputs are congregated by resemblance, and that is worked upon with supervised learning, which indicates the probability of a search result to be booked.

Even for revenue generation, airlines are working on a data-driven approach for incremental revenue.

SAS exemplified the same recently via their context-based pricing approach for 14.5% raise in ancillary revenue for advanced seat reservations in the European market.

Working in conjunction with Amadeus, the initiative featured clustering and data analysis. They were applied to the airline’s European route network. AI was chosen to spot appropriate variables that affect the traveller buying pattern. By banking on machine-learning algorithms, SAS managed to focus on purchasing probability based on a given context. From this, the team worked out both pricing recommendations and the predicted impact on the sale of seat reservations. After a three-month long effort, 11 new pricing policies were finalized to offer the best price for a given context, according to Amadeus.

Such initiatives underline the changing approach – be it for swiftly responding to the emerging technology or aligning the entire organization and yielding results for various stakeholders.

Hear from experts about the role of AI and how it is playing its part in user experience optimization at this year’s Ancillary Merchandising Conference, scheduled to take place in London, UK (9-11 April, 2019).

For more info about Ancillary Merchandising Conference, click here

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Ai Editorial: Adaptive enterprises play infinite game – are airlines ready for it?

First Published on 31st December, 2018

Ai Editorial: Airlines are finding ways to innovate and validate at speed. Ai’s Ritesh Gupta highlights what’s bringing about this change and why 2019 looks promising for the sector.

 

Are airlines evolving to serve their passengers the way they want to be served? Not just loyal flyers, but also other infrequent or even leisure travellers, who possibly could be boarding the aircraft for the first time. Are airlines set to break the shackles, drifting away from the approach of being process-centric?

It isn’t easy for carriers to evolve - for instance a top airline in the U. S. tends to have over 100,000 employees and not a straightforward task to embark on the journey of agile transformation, work out a data-driven culture or amend their indirect distribution and IT set up. Expectedly the total number of airlines coming up with exemplary moves might not be too attractive at this juncture, but considering the ongoing journey of Lufthansa, American Airlines, Air New Zealand, JetStar, Etihad etc., it is clear that the last year or so has brought about a positive change.

Refreshing approach

“Our team is playing an infinite game. We are focused on making decisions and building the long haul,” this is what an executive from American Airlines told me in an interview in the second half of 2018. “Adaptive enterprises survive and thrive to play the infinite game – adapt to the changing IT practices which ultimately results in code and execution quality responsiveness to market changes.”

When such organizations refer to cloud computing for scalability and high availability, software delivery changes (for example, a minimum viable product or test driven development), Dev Ops tooling and practices that improve code quality and speed of deployment etc., it means airlines aren’t going to be shackled by traditional ways of running an enterprise.

Transformation is reflecting in areas, where the passenger experience generally has been stifled by old methodologies.

An example of this being American Airlines working out better self-service capabilities in the event of a forced rebooking due to a cancellation or a major delay. This initiative meant refraining from allocating a new flight and seat to travellers in case of a major disruption. The goal was to let travellers be in control. Rather than travellers moving around and looking for a touchpoint to sort this out, shifting legacy customer-facing applications to the cloud ensured that travellers are now being offered a choice of replacement flights through the channel of their choice. Travellers can check and update their flight selection via the website, mobile app or at a self-service kiosk. This project involved the concept of a minimum viable product, use of microservices, test-driven development etc.

Adding new skill sets

An integral part of agile transformation is finalizing people with the right skillset, then nurturing creative, cultural and processual freedom to prosper.

In case of Lufthansa Innovation Unit (LIH), more than 90% of its team is from the start-up ecosystem. “This is a huge advantage. We understand that we have to build a lasting footprint and legitimize ourselves in the tech space first, even being a market-leading multinational with more than 60 years of experience,” says Gleb Tritus, Managing Director of LIH.

Also, airlines are focusing on recruiting staff related to the areas of engineering, growth, data science, and product. Then teams operate together as much as possible. They deliver very fast results, ensure teams are never afraid of trying new things and are offered ownership and independence in their functioning.  

Being ready as an organization

Managing infrastructure and domain-specific IT systems for retailing, real-time data intelligence, running a digital asset on purpose-built, multi-cloud set up, payment optimization etc. are among the initiatives that airlines are undertaking to keep pace with their customers in digital economy. But all of this wouldn’t really deliver till internal alignment is sorted.

Airlines acknowledge that it is extremely tough for an airline highly focused on safety and therefore naturally risk averse to transform immediately to one that has the risk appetite and agility of a startup. There are ways to gear up for the same. In case of Etihad, it is running two tracks simultaneously - one for running the organization as usual and one for innovation. Once a structure is finalized for agility, then the chosen teams make progress by counting on the talent and efficacy of self-organizing cross-functional teams. Agility is considered to be a mindset. Companies like Kiwi.com look for honesty, transparency, openness, ability to quickly adapt to a constantly changing environment, passion for travel, efficiency, willingness to fail fast and improve in their employees. Such approach can pave way for data shaping up critical decisions (Read more: Understanding the data journey of Jet Privilege).

 

For Ai’s 2019 Events, check - www.aieventdates.com

Follow Ai on Twitter: @Ai_Connects_Us

 

Ai Editorial: Understanding a traveller’s emotion – what to expect in 2019?

First Published on 24th December, 2018

Ai Editorial: Capturing emotions-related data resulting from face-to-face human interactions has still some way to go. This means that the profile of a traveller, even as airlines move towards analytics-driven personalization, won’t be complete, writes Ai’s Ritesh Gupta

 

How a traveller feels about a brand, post shopping for a trip and the actual travel journey? Travel e-commerce players strengthened several initiatives in 2018 to excel in this arena – running an enterprise-wide data platform, garnering data in real time or at regular intervals, counting on data science skills and data visualization tools etc.

But is all of this enough to know how a traveller felt after a particular interaction or experience?

The industry is far from it at this juncture.

On the positive side, ongoing focus on sentiment analysis or evaluating the scope of smart sensors (that allow users to track data such as heart rate, skin temperature, and activity levels on connected devices) were important developments. As we highlighted in one of our articles earlier this year, the blend of artificial intelligence, cognitive computing and emotional data could well lend a new dimension to ascertaining how a traveller “feels” and accordingly delivering the best possible customer service or an ad or a digital experience.

Some areas such as progress in technology is opening new avenues. Facial coding or voice analytics are expected to help in understanding how travellers feel or what their intent is. But looking at in a pragmatic way a massive gap in the whole exercise can be attributed to lack of all of the data.

Lack of data

Even as travel companies can gain consent from users on their digital asset and avail bio-analytics technology (e. g. understanding an emotion as one is browsing travel packages on a website via heart rate variability), a major hurdle that is seemingly slowing down is the lack of emotional data from the offline world.

It can be described as the next frontier. Technology is constantly improving, but companies aren’t yet clear with data privacy-related issues. For example, in case of airlines, the day of travel or the airport experience is where the consumption of the product commences in a tangible manner. There is interaction with the staff at the airport. This is where a passenger shares certain experiences or even the expectations of the journey. Now can this be captured? Yes. The technology is in place. There is an opportunity to avail a voice recognition tool to analyze and record a spoken conversation. This can be useful for airlines considering the typical fast-paced environment (marked by limited time period for each passenger) of an airport.

A senior airline marketing executive shared that their organization is “quite far from” capturing emotional-data emanating from an offline environment. “We don’t capture conversations at the airport. Being clear with customers about what data is being collected is important,” the executive said.

Clearly till the time global brands are sure about new data-related regulations, be it for GDPR in Europe or China Cyber Security Law, they can’t get closer to capturing all the interactions and analyze the same. It isn’t as easy as seeking permission for sending email or acceptance of cookies on a website.

Capturing emotions-related data resulting from face-to-face human interactions has still some way to go. This means that the profile of a traveller, even as airlines move towards analytics-driven personalization, won’t be complete. It would be worth knowing how travel brands crack this, considering that an organization has to make the most of every interaction – be it via a digital or offline touchpoint – to serve their customer in an earnest manner.

 

For Ai’s 2019 Events, check - www.aieventdates.com

Follow Ai on Twitter: @Ai_Connects_Us

Ai Editorial: From being NDC-ready to implementing it - how IATA is focusing on it?

First Published on 7th December, 2018

Ai Editorial: IATA has been evaluating the performance of NDC - what is missing to attain 20% sales-target that is going to be powered by NDC by 2020? What is the roadmap of an organization’s NDC IT deployment? Ai’s Ritesh Gupta assesses new initiatives related to the standard.

 

The way IATA’s New Distribution Capability (NDC) standard is shaping up is a keenly followed topic in travel distribution. Be it for the volume of the business that is being facilitated by the NDC standard to focusing on NDC-compliant IT systems to assessing the readiness of airlines, intermediaries, IT specialists etc., it is fascinating to assess progress made by various stakeholders. 

Amidst all the discussion around industrialization of the standard, one of the recent developments has been the addition of new certification levels, planned for early next year.

First, Level 4 will feature Servicing Messages.

Second, organizations having a minimum set of recognized capabilities to drive volumes of NDC transactions towards 2020 are going to be awarded NDC@Scale.  It is based on four main elements that are important to quantify the capacity to scale to volumes of NDC transactions:

•          Technical setup (ability to run an NDC API on Service Level Agreements (SLA) with performance requirements for areas such as response time, availability, available transactions per second, error management, etc.). 

•          Organization setup (work on support needed to connect new partners and to run the operation).

•          Use cases (consider the implementation of standardized messages workflows across the industry).

•          Capabilities (consider the coverage of key features (Shop, Order/Service/Pay) powered by an NDC API and the ability for airlines to replicate some features currently possible through the traditional channels (GDSs) as well as the ability to provide additional content).

New certification for measuring progress

IATA will start recognizing the ability to have servicing messages in place through its NDC certification program with a new level of certification (Level 4) starting next year.

These initiatives are surfacing as IATA has been evaluating the performance of NDC - what is missing to attain 20% sales-target that is going to be powered by an NDC API by 2020? What is the roadmap of an organization’s NDC IT deployment?

Referring to IATA’s certification prior to the inception of Level 4, Ryan Harris, Director at JR Technologies’ Research and Development Centre in Dublin, says, “Under the previous certification method, it didn’t necessarily mean that NDC was being implemented, even though one could be NDC-ready. For NDC messages, entities could use it – issue it or consume it – but the real usage was not truly relevant to the certification level. New certification system helps to make true adoption a  measure – is NDC being executed? The co-relation to the actual adaptation of NDC was lacking in the previous structure.” 

Highlighting the significance of Service Message Requirements, he said these are for cases where there is an order. “Within the NDC certification process, Levels 1, 2 and 3 mean that an entity can create an offer, take the offer and create an order from it. Service Messages come into play when you need to change the order, modify the order, delete the order – do anything to that order after the order is created. It is no longer just about sending or not being to send the message, but is the message being used to do what the message intended to do?  Part of it will come into ONE Order certification, which is expected to commence in January. It will be similar to NDC certification – again, helping to show whether ONE Order is being used or not,” explained Harris.

JR Technologies’ NDC platform has been powering InselAir’s Internet bookings since September this year.

“We also worked on [Curacao-based airline] InselAir’s successful ONE Order pilot – where we created orders and boarded passengers without issuing tickets or creating PNRs -  for our joint public presentation with InselAir, JR Technologies, Airline Choice, and IATA in Athens in early October,” shared Harris.

There have been discussions around the utility of the NDC standard 17.2 vs. 18.2. Harris pointed out that with 18.2, the mapping of messages using the IATA Airline Industry Data Model (AIDM) is complete, as well as the including of ONE Order messages, the latest version is a complete end-to-end standard.  Adoption would be dependent upon the individual use case and the expenditure involved, but it is a question when, not if, the NDC and ONE Order processes will become the operating standard in the industry. 

Targeting “mass” adoption

IATA is proposing to airlines an implementation plan revolving around two key phases. In the first one, airlines would focus on basics of their NDC implementation mainly their API connectivity and their Offer and Order Management system with basic functionalities and product and services. The competences finalized are primarily replicated from the traditional channels (GDSs). During this period IATA suggests that airlines pursue the criteria chosen for NDC@Scale that underline the minimum required capabilities to initiate processing high volumes of NDC transactions.

In the second phase actual benefits surface as airlines start executing supplementary capabilities (such as dynamic pricing, rich content, personalization etc.) that are facilitated by NDC. Plus, during this phase, airlines will be in a position to propose enhanced content in the form of new products and services and new shopping experience for sellers and customers. Ultimately, this roadmap will be driven by customers’ needs i.e. the travel trade, the buyer and the needs of the traveler (business and leisure), according to IATA.

 

Hear from experts at the upcoming Ancillary Merchandising Conference to be held in London 9-11 April, 2019

Follow Ai on Twitter: @Ai_Connects_Us

 

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