So far in the earlier sections we have looked at i) what XML is, ii) what NDC is and iii) why XML is integral to NDC. In the last article (iv) we touched on the differences between EDIFACT and XML and in this article (v) we discuss why XML is so useful to the travel industry before taking stock of what we see as future trends for online travel shopping.
The intention in this section is to demonstrate how XML provides the communication framework that makes the competitive world of buying and selling travel products possible across an array of different distribution channels. Something IATA’s New Distribution Initiative (NDC) initiative is designed to do for the airline sector.
How XML is used
The ability (with encouragement from travel product suppliers) to book hotels, flights, cars, etc online heralded the rapid adoption of XML. Online travel websites present product information, options and booking forms in HTML and use XML as the open-ended, extensible markup language that conveys those requests and replies up and down the various systems involved in the underlying supply chain.
Travel is of course not the only industry to undergo an online revolution. Insurance and Financial Services for example have also been busy developing their XML standards (ACORD) that describe what they do in XML format. Each industry standard comes complete with its own schemas, which means that any server in the value chain can validate a document and then parse it using one of the tools available. Of course, consuming and responding to these XML documents is not always simple, since the information they contain can be quite complex. The ability to represent a detailed travel itinerary for example is made possible with XML technology. Open Travel Alliance and Open Axis are the two XML standards groups that emerged for the travel industry with the first developing standards mainly for hospitality and the latter being selected by the airline industry as the basis of IATA’s NDC.
In a short period, the whole travel industry itself has become a complex and fragmented web of distribution channels. Today’s traveller is spoilt for choice for places to go to search and book his travel plans. The booking process, once dominated by traditional travel agencies working through Global Distribution Systems (GDSs) using EDIFACT technology, now includes online travel agencies (OTAs), suppliers directly, metasearch and niche booking engines such as last minute and mobile specialists. In this complex spider’s web of choice, consumers spend a lot of time researching their options before making a booking, which contributes to very high look-to-book rates. Travellers move across numerous web sites and devices searching for that perfect value. This of course has its own impact on computing and network resources and associated costs. The sharing and exchange of products and bookings using a common technology standard (XML) is key.
The breadth of choice and players, means the reservations systems for airlines, hotels, and other service such as cars or cruises are integrated in a myriad of ways, and the aggregators or packagers (such as OTAs) and wholesalers contribute to the process of distributing inventory. XML technology plays the role of the important link in the drive towards seamless connectivity and syncing between different systems of the supply chain across different sectors in real-time. It is the plumbing through which the exchange of information takes place between disparate channels. Indeed XML based APIs (Application Programme Interface) play a critical role in strengthening the systems of travel suppliers and helps to connect multiple systems that were previously functioning quite separately.
Layers of Connectivity
Taking the hospitality industry as an example there are three distinct layers of connectivity, where much of the exchange of information is done through XML APIs:
Firstly, the large hotel chains with their homogeneous reservation systems and IT infrastructure have the capability and resources to indulge in direct connections across multiple channels, such as GDSs, wholesalers or large OTAs. Direct connects are costly and time consuming to establish, but enable standalone contracts between the partners, as well as being good for speed and less points of failure in the supply chain.)
Secondly, smaller hotel brands however, are more likely to connect with agents via a switch, such as Pegasus, or a GDS to distribute inventory. Switches are essentially the gateways between the hotel reservation systems and larger distribution networks further up the supply chain. A connection to a switch or GDS is generally less onerous to implement and manage.)
The third type of connectivity for a hotel, is operating as part of a franchise (eg. Best Western) where the Representation Company (RepCo) manages the distribution channels and partnerships as part of a full service package including the all-important central reservation system. Integration and connectivity costs to channels are therefore lower as they are handled via connections to the single RepCo.
As much as travel product suppliers such as hotels and airlines want to encourage direct sales via their own websites, a large proportion of business is still conducted through intermediaries and this is not about to change. This is especially true for the hospitality sector, where OTAs have excelled at commanding the sale of accommodation with their ability to offer information, prices and availability not just for one property but several at the same time and often for less than available from the hotel directly. Recognising their dependency on intermediaries, hotel chains tend to have a number of direct connections with these intermediaries such as OTAs or bedbanks.
How APIs simplify the complexities of the travel industry
Travel websites have become a fusion of mashups that access data from various sources, update in real time and provide an easy-to-use interface for booking and ticketing purposes. Hotels, airlines, cruise liners, and other suppliers enable travel sites to access reservation data through APIs. In simple terms an API is a way for one company to legitimately access (versus scraping) the products of another. APIs are basically the web services that connect and bridge the information flow across the connected supply chain – ultimately enabling the variety of options to be put before the consumer.
When suppliers implement the right XML APIs, they grant access to data and services without relinquishing control. The suppliers decide who has access to their data and what they can do with it. Partners or affiliates in the supply chain such as transfer specialists or car rentals can also be given access to provide additional services, all designed to contribute to the final customer experience and to make it easier to secure the booking. This is an example where suppliers can enable strategic partners to help drive ancillary sales.
Through direct connect APIs based on XML, hotels for example, make their proprietary information available to aggregators who in turn make it available to the array of online travel providers such as OTAs. These web services XMLs help travel companies and agents to connect to end servers and check hotel room availability, pricing, and amenities. Most of the travel agencies use multiple hotel APIs to have the best in class inventory from multiple hotel XML suppliers. These are then aggregated and presented into a common user interface. This lets the traveller search and book the hotels worldwide under a single hotel reservation system. Web services XMLs are used to communicate between the booking system and hotel aggregators online and buyers are able to get seamless results from all the hotel API providers.
Speed – the name of the game
With so many players and so much information flowing, the travel market is particularly competitive with 3 key factors driving the decision to book with one or other provider:
- Website functionality (can they find what they are looking for easily)
- Availability of the chosen travel package (flight or hotel)
- Price (obviously)
This means that the ability of supplier systems to respond quickly and accurately to search requests is critical in getting the deals. Most online travel websites use the latest “filter techniques” across a number of supplier feeds in real-time. Meaning that they can always deliver the latest availability information and most importantly the best available rate to the consumer. To be successful, travel sites need to be robust to handle business demand and responsive to market drivers.
Online travel transformed with XML
Travel is a dynamic industry in all possible ways, since prices and availability never stands still and travel companies are continuously growing their supplier base by regularly adding new ones such as market or destination specialists. XML communication networks likewise continues to spread. Managing this growth of suppliers and APIs has its own connectivity challenges, due to high integration costs and a lack of quality standards. Each partner in the supply chain needs to implement and manage those connections that are best meet the demands of the business and are affordable. A well-managed XML strategy enables travel brands to connect with all of the appropriate players in the ecosystem, while retaining control over the data they are sharing with partners and affiliates. This helps companies reach as many customers as possible.
In short, sharing data using XML is not just a technology or a standard but delivers the ability to transform the way businesses is done in every part of travel.
2 minute video shows how XML works for airlines.
A simple view of how searches and bookings get transacted across the supply chain. APIs ensure that all parties have the right information, and decoding XML can deliver valuable business insights.
Our recent white paper discusses the airline industry’s proposed move to adopt XML data exchange and offers constructive technical solutions for maximising the return on investment in XML by using the business intelligence that is inherent in the XML based platform.