The travel industry could be witnessing an unusual and fascinating parallel between India’s ONDC and the global airline industry’s New Distribution Capability (NDC). Although ONDC goes much wider than travel, both initiatives represent ambitious attempts to democratise digital commerce and break away from traditional distribution monopolies.
ONDC (Open Network for Digital Commerce) aims to create an open network where buyers and sellers can connect regardless of the platform they use. By joining ONDC, hotels could become discoverable on a wide range of applications, potentially expanding their reach to a larger customer base. This could be particularly beneficial for smaller hotels or those located in less-travelled areas that may struggle to gain visibility on dominant platforms.
Let’s look at ONDC’s impressive momentum first: The platform has seen an 85% surge in transactions since January 2024, processing over 12 million orders last month. In the mobility sector alone, there were about 5 million bookings in August. EaseMyTrip’s launch of ScanMyTrip on ONDC marks a significant milestone, much like when major airlines first adopted NDC.
The parallels between ONDC and NDC are striking:
Distribution Control:
Just as NDC aimed to help airlines take back partial control from Global Distribution Systems (GDS), ONDC will enable hotels to reduce their dependence on dominant OTAs. Both initiatives fundamentally aim to shift power back to service providers. The main difference is that ONDC is working on a much wider ecosystem beyond hotels and airlines but within India.
Adoption Timeline:
NDC’s journey since its introduction in 2012 offers valuable lessons for ONDC. Initially, NDC faced scepticism and slow adoption, taking several years before gaining significant traction. It is 2024 and many major airlines have embraced NDC (albeit most of them not exclusively), showing that transformative changes in distribution technology often require patience and persistence. And NDC still has a some way to go. Unsurprisingly, ONDC might follow a similar adoption curve.
Industry Resistance:
Both systems faced initial resistance from established players. With NDC, traditional GDS providers were hesitant to change; similarly, major OTAs might be cautious about ONDC. However, just as NDC eventually saw major players like Amadeus and Sabre adapt, we’re already seeing positive signs with players like EaseMyTrip joining ONDC.
Technical Implementation:
Both initiatives require significant technical investment and standardisation. NDC’s XML-based standards took time for the industry to implement; similarly, ONDC’s protocols require adaptation time. However, once implemented, both systems offer greater flexibility and innovation opportunities.
The impact on the travel sector could be transformative, much like NDC:
For Hotels:
Similar to how NDC gave airlines better control over their product offering, ONDC enables hotels to maintain direct customer relationships and offer differentiated products. Hotels can potentially reduce the 15-25% commission rates currently charged by major OTAs, just as airlines have used NDC to optimize their distribution costs.
For Innovation:
Just as NDC spawned new travel technology providers and solutions, ONDC is likely to encourage new specialised booking platforms and innovative service offerings.
For Customers:
Like NDC’s promise of richer content and personalised offerings for air travellers, ONDC could deliver more choices and better-tailored hotel experiences for Indian travellers.
Looking ahead, ONDC’s path might mirror NDC’s evolution:
Initial scepticism followed by gradual adoption and eventual transformation. While NDC took nearly a decade to gain widespread acceptance, it has fundamentally changed airline distribution. ONDC might see faster adoption given India’s digital readiness and government support, but patience will be key.
The future looks promising for ONDC, especially when viewed through the lens of NDC’s slow but steady success. While challenges remain in areas like customer service and trust-building, the platform has the potential to reshape India’s travel industry, just as NDC has transformed airline distribution globally.