Offer and Order Management Gains Momentum in Airline Industry

Thursday, June 6, 2024

In the airline industry, the concept of ‘offer and order management’ has been a topic of significant discussion for several years. This was highlighted at the IATA World Financial & Passenger Symposium in Chicago late last year, where it became evident that the momentum behind offer/order management was increasing.

However, many OTAs, tour operators, and retail travel agents are still largely unfamiliar with this concept.

So, what exactly is offer and order management? Essentially, it’s a modern technological approach to selling air travel products—and potentially other travel products like accommodation in the future—based on the principles of effective and contemporary retailing. Once implemented, it allows airlines to create and distribute personalized offers to travelers.

Why is this important for distributors and sellers of airline products? As the industry faces increasing pressure to adopt offer/order management, we consulted B2B travel technology experts to explore how this shift will transform the travel landscape and what changes to expect.

Vibe, a provider of booking & reservation technology to online travel sellers, thinks that offer-order will allow new players to enter the travel space, perhaps through new retailing partnerships. “Travellers currently face a limited choice when booking air products, alongside a complex and time-consuming booking process that often takes place across multiple channels,” said Martin Eade. “Offer order will take these frustrations away by presenting the traveller with a range of relevant, easy-to-book, tailored travel options. Taking away complexity for travellers will likely result in better conversion rates, and will open up doors for airlines to offer new services, and therefore for new players – B2C websites perhaps not selling travel products right now – to enter the market.”

Nonetheless, Maxim Sevastianov from Trava, whose technology revolutionises post-booking processes for online travel sellers, sees a big opportunity for existing retail players: “Today, airlines struggle to gain useful insights into their travellers’ individual preferences therefore can’t offer accurately personalised products. In parallel, airlines have the added difficulty of managing complex partnerships, as much of the technology they are using to do so is outdated or siloed. Adopting the principles of retail, an offer-order environment is likely to open a whole new world of ancillary revenue for airlines that travel distributors and intermediaries will find very valuable both in terms of additional revenues, but just more generally in keeping clients happy or increasing sales conversions.”

Artificial intelligence could be the boost the industry needs to make offer-order a reality, according to Sergio Sánchez, CIO de PriceTravel, one of Latin America’s biggest B2B and B2C sellers of travel: “Soon, air travellers will enjoy complete transparency across all air products and services, even if they’ve booked across multiple channels, thanks to AI automating and compiling this information. Everything will be visible in one place for the passenger, and there will soon be no need to keep track of multiple reference numbers for each trip. This transition has long been spoken about, but has remained a pipe-dream in part because of technical limitations. However, thanks to the evolving capabilities of artificial intelligence, 2024 may be the year we start to see this actually take shape.”

Airnguru, a leading provider of fare management, pricing intelligence and price automation solutions for airlines, is enthusiastic about the potential of offer/order to redefine air travel retailing. “The true driving force behind this change will be the widespread adoption of Machine Learning and Artificial Intelligence,” says CEO Sergio Mendoza. “For airlines, the final retailing vision revolves around the ability to create dynamic, personalised offers for travellers. However, this requires the implementation of robust Machine Learning models continuously trained on massive, unbiased data, capable of interpreting the desires of consumers and forecasting their willingness-to-pay, and recommending the appropriate set of products at the appropriate set of prices. 2024-2025 could mark a significant turning point in this transformation, with airlines increasingly harnessing the power of ML and AI to adjust their product offer and prices in real-time, based on supply, demand, and shopping data, as well as various contextual variables.”

As a final thought Gareth Matthews from global travel distribution provider Didatravel – who in recent years has begun selling flights as well as accommodation – reminds us that we’ve still some way to go. “This will be a watershed moment for airline distribution and one that is very much welcomed by online travel sellers everywhere, but we must remember that we’ve been hearing about similar plans for over a decade now. Some airlines are slowly integrating such technology, but it’s far from standard practice still. In other words, if you’re an OTA or tour operator in a source market dominated by one or two airlines and they don’t have a plan for this, basically it might as well not exist – and that’s the case in many markets still. Hopefully this will change over time but don’t bet the future of your business on that.”

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