how to market and sell unbundled travel
DESCRIPTION
This webinar, produced by Tnooz and Amadeus, examined new traveler behavior, the effects of unbundling services on business models and how suppliers manage the marketing opportunities and challenges. Panelists for this FREE webinar were: Brian Beard, executive technology consultant, Amadeus Scott Gillespie, travel industry consultant, Gillespie's Guide to Travel + Procurement Gene Quinn, CEO and producer, Tnooz Kevin May, Editor and moderator, TnoozTRANSCRIPT
How to Market and Sell Unbundled Travel
October 30, 2012
K
Kevin MayEditor / Moderator
Gene QuinnCEO / Producer
Panelists
Brian BeardAmadeusExecutive, Travel Technology & Consulting
Scott GillespieAuthor, Gillespie’s Guide To Travel+ProcurementFounder, Travel Analytics
Poll no. 1
Poll no. 2
Scott Gillespie
Author, Gillespie’s Guide To Travel + ProcurementFounder, Travel Analytics
Predictive Bundling
Types of Ancillary Revenues
Other SourcesFlight-Specific Sources
• Lounge Pass• Extra Miles/Points• Booking Method• Payment Method
• Bag Fees• Seating• Priority Boarding• Food & Beverage• Entertainment• Pillows, Etc.
• Car, Hotel Bookings• Destination Content,
e.g. Concert Tickets
• WiFi• Catalog Sales• On-Board
Advertising
Airline’s Products
Partner’s Products
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Too much information
To Bundle, Or Not To Bundle?
|
The Cost of Shopping
Number of ChoicesOneBundle
ManyOptions
High
CostToTraveler
Source: Scott Gillespie
|
The Cost of Shopping
Number of ChoicesOneBundle
ManyOptions
High
CostToTraveler
Cost ofUnwanted Features
Source: Scott Gillespie
|
The Cost of Shopping
Number of ChoicesOneBundle
ManyOptions
High
CostToTraveler
Cost ofUnwanted Features
Shopper’s Time
Source: Scott Gillespie
|
The Cost of Shopping
Number of ChoicesOneBundle
ManyOptions
High
CostToTraveler
Cost of Unwanted Features
Shopper’s Time
Total Shopping Cost
Source: Scott Gillespie
|
The Cost of Shopping
Number of ChoicesOneBundle
ManyOptions
High
CostToTraveler
Cost ofUnwanted Features
Shopper’s Time
Total Shopping Cost
Source: Scott Gillespie
|
Bundling Makes Sense When
High
CostToTraveler
Unwanted FeaturesDon’t Cost Much
Shopper’s TimeIs Very Valuable
TotalShoppingCost
Source: Scott Gillespie
Number of ChoicesOneBundle
ManyOptions
|
Bundling Makes No Sense When
High
CostToTraveler
Unwanted FeaturesCost a Lot
Shopper’s TimeIs Not Valuable
Total Shopping Cost
Source: Scott Gillespie
Number of Choices
OneBundle
ManyOptions
General Conclusion
• Bundle for Business Travelers• Unbundle for Leisure Travelers
General Conclusion
• Bundle for Business Travelers• Unbundle for Leisure Travelers
Marketing Implications
Fare Families
General Conclusion
• Bundle for Business Travelers• Unbundle for Leisure Travelers
Marketing Implications
Fare Families
Traveler Personas
General Conclusion
• Bundle for Business Travelers• Unbundle for Leisure Travelers
Marketing Implications
Fare Families
Traveler Personas
And eventually…
With Rich Customer Profiles…
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Predictive Bundling
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Predictive BundlingCurrent Search Parameters - Dates, Times, Destination - Number of Pax - Number of stops
Recent Purchases - Dates, Destinations - Cabin, Seat Choice - Days Advance - Price, Booking Class
Airline StatusCorporate Link?
OA’s Likely Bundle?
Co-Branded Credit Card
- Ancillary Fees
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Predictive Bundling
• One Checked Bag• Priority Boarding• Window/Aisle Choice
Examples of
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Predictive Bundling
• One Checked Bag• Priority Boarding• Window/Aisle Choice
Examples of
• Lounge Day Pass• $20 credit for on-board
F&B, Entertainment, WiFi
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Predictive Bundling
• One Checked Bag• Priority Boarding• Window/Aisle Choice
• Lounge Day Pass• $20 credit for on-board
F&B, Entertainment, WiFi
• Priority Standby for Upgrade• Best effort at empty middle seat• 50% off Change Fee, if needed
Examples of
• Access to appropriate data sources– Facebook, Twitter, LinkedIn, Klout, etc.– Credit scores, purchase patterns
• Drawing good conclusions about which bundles to present
• Offering bundles at point(s) of sale– Online shopping sites (speed and accuracy issues?)– In the booking path– At check in– Via mobile phone
• Potential conflict with corporate T&E policies
Predictive BundlingChallenges of
Poll no. 3
Poll no. 4
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Unbundled Travel Services
Traveler Perspectives and Technology Impact
Brian Beard, Executive, Travel Technology & Consulting, Amadeus
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Unprecedented Complexity
Airline ancillary revenue will reach
$36.1 Billion in
2012
Proliferation of Choices Bags or No Bags Board early or take the risk Bring food Bring Wifi or take the risk
Frustration and Inconvenience Plane checked bags Slow Wifi In your face advertising
Travelers expectations Know options ahead of time Easy payment Listed in Itinerary
Source: Amadeus and IdeaWorksCompany Press release
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The Business Traveler Dilemma
Please remember me Services selected previously Basic preferences Last time I traveled My favorite bundle
Expense or not Expense? Out dated travel policies Personal travel costs Expense systems
The partially functional OBT Lacking travel products and services Completeness of the Itinerary Ability to change a reservation
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Travel Manager Pain Points
Travel Policies out of control A policy for every service Impacts of bundling Constant changes
Reporting has become more difficult Lack of available Data Reporting tool upgrades Expense systems
Impact on supplier negotiations Addition inputs Stability of unbundled services May be too early to tell
Most US corporations have yet to set policies regarding ancillary service
offerings
Poll no. 5
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Future Paths
The supplier Direct solution The EMD Solution The supplier API solution Fare Families System Integration Data collection
Earlier this year, Amadeus and IdeaWorksCompany reported the ancillary revenue disclosed by 50 airlines for 2011. These statistics were applied to a larger list of 176 airlines to provide a truly global projection of ancillary revenue activity by the world’s airlines in 2012. The Amadeus Worldwide Estimate of Ancillary Revenue marks the third year Amadeus and IdeaWorksCompany have offered a projection of global ancillary revenue activity.
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Technology’s Role/Impact
It’s all about Data Big Data, Small Data, timely data Access and Sharing Privacy and compliance
Next Gen Booking tools Mobile and fully functional Evolution of the travel tool Power to the traveler
Social and More Unbundled product will be increasingly
impacted by social input Multiple payment mechanisms will exist Apps become the new widgets
5 Billion people will
have access to
mobile broadband
by 2016
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Conclusions
Traveler frustration will drive change
TMC’s must adapt to the increasing needs of the travel manager
Leisure traveler’s will continue to have an increasing number of choices for travel products
Technology will make selecting and tracking unbundled services easier
Sharing data across the travel supply chain will be a key driver for change
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Brighter, Bolder, Betterwith Amadeus
Q & A
Thank You!
Please
Please send your questions and comments to Kevin May, [email protected]
Replay of today’s webinar and presentation will be available tomorrow at www.tnooz.com