Roughly 79% of travelers prefer to buy ancillary products and services directly from airlines rather than a third party to create a total travel experience. This is the telling statistic that emerged from a recent study published by what might be considered an unlikely source – global distribution system (GDS) Amadeus.
Together with Frost & Sullivan, its partner on the report, Amadeus also found that 26% of travelers are more likely to respond to messages tailored to their personal interests, and 22% are more likely to respond to promotions that are specific to their location.
Merchandising is about providing customers with a shopping experience that presents products in the best possible light, at the best possible time, and allows them to tailor their travel experience. In the past, GDSs have faced criticism from airlines and other industry stakeholders for not always being able to accommodate this philosophy (for instance, airlines bemoaned a lack of visibility for their extra legroom products).
Fast forward to today, and Amadeus is working hard to change this perception by providing tools to travel agents that allow the passenger experience to be personalized. In addition to making ancillary services available to travel agents at the point-of-sale, they can now access and book even more enriched content through ‘airline fare families’.
Fare families are bundles of fares that share the same conditions – for example, refundable or exchangeable – and include the same services and options, like luggage, meals or mileage accrual. The fare families platform also includes an up-sell module that provides airlines an ability to create targeted offers to travelers. In early 2014, Brussels Airlines and Finnair launched fare families to differentiate their offerings from competitors.
As Amadeus was developing fare families it consulted more than 70 travel agencies, reveals Amadeus senior manager, strategy and business development, airline distribution marketing Alexandre Jorre. The collaboration underpins Amadeus’ mindset of offering “the most convenient travel experience to the end customer” irrespective of what channel is employed (direct or via GDS).
Streamlining travel agent workflow and minimizing disruption has become incredibly important for all GDSs, including Sabre and Travelport, as they evolve their respective merchandising platforms for airlines.
But as improvements are made, some concerns over how airlines use passenger data have bubbled to the surface. The vast majority of executives surveyed in the Amadeus/Frost & Sullivan study – some 83% – expressed interest in creating personalized packages for travelers based on known information. But only 22% of the travelers that participated in the study had an interest in that type of offer.
“Truly personalized offers using granular customer relationship management (CRM) data, purchasing history, social media, clickstream data and location- based data will significantly improve customer response”, the study found, though it acknowledged there is still much apprehension from consumers around personalized services.
Jorre believes there is intrinsic value in the data to create a more relevant travel offer to the consumer. He stresses that any tailored offers need to in compliance with regulations. To improve customer take-up on personalized offers “there must be widespread education of the market as to what sort of data is being collected,” the report concluded.