< PrevNext > Differentiation Will Drive New Business Models By Festive Road managing partner Paul Tilstone / 29 January 2018 Share This year, we’ll see incentives for all! Ok, let’s be honest, I used that to grab your attention, as that’s absolutely not a phrase you are going to hear much in 2018. In fact, the direct opposite will start to happen as suppliers will become much more discerning. In the past, just having a business relationship with a supplier was likely to result in incentives between agents, content aggregators and suppliers. But, as anyone who has worked on agency incentives will attest, the grumblings about what they got in return has always been there. More recently, suppliers have become more discriminating in their financial relationships with the agency community, and the trend is not limited to the airline sector. The changing perspectives on incentives are a bellwether for greater, underlying business model changes that will evolve this year. We’ve already seen the introduction of distribution fees, the waiving of these fees for some preferred agencies and the introduction of special fares through a “private” channel. These largely have been linked to the rollout of the New Distribution Capability standards by most of the larger carriers, but let’s be clear: While they are connected to NDC, it is only in as much as they are all part of a broader airline strategy to develop a more efficient distribution chain for the future. Changes to distribution strategy will accompany greater differentiation in both the products and services of the suppliers and across those delivering the services—for simplicity, let’s call them the “resellers”. Suppliers are building incentive programs based on demonstrable value and return relative to the ability to sell these new products and services. As a supplier, why wouldn’t you focus on rewarding those resellers who can help you achieve your objectives. That’s just business.We are likely to see a variety of delivery models established during 2018 as the suppliers, resellers and buyers weigh the new options available to them to distribute and consume these differentiated products. Here lies the opportunity: As a reseller, you get to sell why you’re different and how you’ll meet the supplier’s business objectives—maybe even co-create new ways together, ultimately becoming the “reinvented reseller.”What this means for the buyer this year is either a whole lot more pain or a glorious future of exciting work to be done. The changes in distribution and business models can’t be ignored. True understanding of the value chain, money flow and impact on both the business traveler and company needs creates opportunity. It’s all for the taking. Disruption at the most fundamental financial level to an industry provides the opportunity to shape a new future. Now there’s an incentive for all.