How NDC-Type Technology Will Change Hotel Distribution

The landscape of hotel distribution is on the brink of significant transformation.

This is no exaggeration: Technological advancements that mirror the airline industry’s New Distribution Capability (NDC) framework are barreling down on the world of accommodations. And the ramifications of this shift could be just as substantial as for the airlines with NDC, by reshaping hoteliers’ strategies for distributing inventory and engaging with customers. In fact, the adoption of NDC-like technology may mark a new dawn in hotel distribution, where the focus shifts from merely filling rooms to delivering tailored, value-driven experiences that resonate with the modern traveler.

The Case for Change

NDC revolutionized airline distribution by addressing outdated technology and high distribution costs. For airlines, legacy systems could not handle the dynamic pricing, personalized offerings, and omnichannel sales strategies that modern consumers demand. By adopting NDC, airlines can offer a more tailored and profitable customer experience, including continuous pricing models and enhanced revenue management capabilities. 

The hotel industry — although different in structure — faces similar challenges. There are an estimated 187,000 hotels globally, and only a small percentage of them are managed by individual corporations.  The resulting diversity in property management systems and ownership structures complicates the distribution process. Currently, hotel distribution costs can be significantly higher than those in the airline industry — and that creates a compelling case for adopting new technology solutions.

This controversial topic was part of the conversation during a GBTA 2024 panel discussion. “A New Dawn for Hotel Distribution Strategies” featuring Bryan Bachrad, Navan’s vice president of lodging and ground transport; Abhijit Patel, Choice Hotels International’s vice president of revenue management and distribution strategy; hospitality consultant Ian Jones; and travel industry executive Kim Hamer. 

As Bachrad noted in the conversation, forward-thinking booking platforms like Navan already pull in multiple content streams, which enable travelers to consider the largest possible number of options and make the best, most cost- and time-effective choice for their trip. However, NDC-type technology would take this to a new level with more detailed content and savings for companies and travelers.

The Potential of NDC-Like Technology for Hotels

“Is NDC coming for hotels? That’s the question we’re trying to answer today,” Jones said at the start of the panel.

NDC-like technology refers to advanced distribution systems that enable more direct and customized connections between hotels and various sales channels, much like the NDC did for airlines. This technology would allow hoteliers to bypass traditional third-party intermediaries and directly distribute rich, dynamic content to consumers and corporate buyers. 

NDC facilitates personalized offers, real-time updates on availability and pricing, and the ability to manage different distribution channels more efficiently. Essentially, NDC-like technology empowers hotels to control their inventory and pricing better while offering a more tailored experience to their guests.

As Choice Hotels’ Patel noted, “Hoteliers are already investing heavily in cloud-based systems to make sure they're not left behind.” However, the implementation of NDC-like technology in the hotel industry has the potential to unlock several more benefits.

Enhanced Personalization

Like airlines, hotels can use advanced distribution technology to offer personalized experiences — from tailoring room rates based on customer preferences and loyalty status to providing specific amenities that align with individual traveler needs.

“Personalization and payments are probably the most exciting areas where this new technology can make a real difference. Hotels can understand their customers better and offer truly relevant experiences,” said Navan’s Bachrad during the panel.

Improved Content Distribution

NDC-like platforms can help hoteliers distribute richer, more accurate content across multiple channels, so that potential guests see the most relevant and up-to-date information. These features include dynamic pricing, real-time availability, and property-specific offers that booking websites can tailor to different market segments.

“I would say content is still key,” said travel executive Hamer. “It’s about getting the best content in front of your travelers so they can make informed decisions within their budget. How do you utilize Gen AI and loyalty within corporate policy parameters to drive a better user experience? You can see the benefits if you focus on these aspects and collaborate with your managed program partners.”

Streamlined Processes 

Adopting standardized technology can reduce the complexity and cost of distributing hotel inventory. The overall distribution process becomes more efficient by simplifying the connection between hoteliers, travel management companies (TMCs), and online travel agencies, potentially reducing costs and increasing profitability.

Dynamic Pricing and Revenue Management

Just as NDC enabled airlines to implement continuous pricing strategies, hotels can benefit from dynamic pricing models that adjust rates based on demand, seasonality, and other factors. This allows for more strategic revenue management and the ability to maximize profitability on a per-room basis.

As Patel noted, “Dynamic pricing and advanced revenue management capabilities are key to making that happen, allowing us to maximize profitability while offering a tailored experience to travelers.”

Increased Collaboration with TMCs

Better technology integration could strengthen the relationship between hoteliers and TMCs. By sharing richer data and working more closely on distribution strategies, both parties can guarantee that corporate travelers receive the best possible rates and services.

Challenges to Adoption

While the potential benefits of NDC-like technology in the hotel industry are clear, there are also substantial challenges to overcome, including:

• Lack of Standardization: Unlike the airline industry, where IATA provided a standardized framework for NDC, the hotel industry needs a similar governing body. Without one, there would likely be fragmented adoption and varying levels of success across different hotel chains and properties.
• Technology Integration: Many hotels still operate on legacy systems, which may need help integrating with new distribution technology. As a result, the adoption process would likely be even slower than that seen among airlines’ adoption of NDC.
• Cost of Implementation: Developing and deploying new distribution technology requires significant investment. Smaller hotel chains or independent properties may need help to afford these changes, potentially widening the gap between larger and smaller players in the market.

Where Navan Stands

As the hotel industry continues to explore the possibilities of NDC-like technology, it’s clear that those who invest in these advancements will be better positioned to meet the evolving demands of the market. The shift toward more dynamic, personalized, and efficient distribution strategies promises to improve customer satisfaction and enhance hoteliers’ profitability.

Navan has long been a leader in adopting cutting-edge technology to enhance the business travel experience. By integrating NDC technology, Navan has positioned itself ahead of the curve and can offer richer content, more personalized experiences, and streamlined processes that benefit suppliers and customers. 

As Bachard said, “When you bring in the right supply and offer tools like Navan’s rewards initiative, you create a platform that keeps travelers engaged and drives up hotel attachment rates.”

As the hotel industry begins to explore NDC-like technology, Navan is carefully monitoring these developments so that its platform continues to deliver the most advanced and effective tools available. 

Whether through enhanced distribution strategies, dynamic pricing, or improved collaboration with partners, Navan remains committed to bringing the latest innovations to its suppliers, partners, and customers.

Download Navan’s NDC’s Savings Index — a first-of-its-kind deep dive into the benefits of scaled NDC utilization.