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How to Market and Sell  Unbundled Travel      October 30, 2012
KKevin May                Gene QuinnEditor / Moderator       CEO / Producer
PanelistsBrian Beard                 Scott GillespieAmadeus                     Author, Gillespie’s GuideExecutive, Travel...
Poll no. 1
Poll no. 2
Predictive                            BundlingScott GillespieAuthor, Gillespie’s Guide To Travel + ProcurementFounder, Tra...
Types of Ancillary Revenues            Flight-Specific Sources      Other Sources            • Bag Fees                • L...
10/30/2012   8
To Bundle,Or Not To Bundle?
The Cost of Shopping      HighCostToTraveler                           One                          Many                  ...
The Cost of Shopping      HighCostToTraveler                                                  Cost of                     ...
The Cost of Shopping      High                                                 Shopper’s TimeCostToTraveler               ...
The Cost of Shopping     High                           Total Shopping Cost                                               ...
The Cost of Shopping     High                           Total Shopping Cost                                               ...
Bundling Makes Sense When     High                            Shopper’s Time                                     Is Very V...
Bundling Makes No Sense When     High                                  Total Shopping CostCost               UnwantedTo   ...
General Conclusion• Bundle for Business Travelers• Unbundle for Leisure Travelers
General Conclusion • Bundle for Business Travelers • Unbundle for Leisure Travelers      Marketing Implications  FareFamil...
General Conclusion • Bundle for Business Travelers • Unbundle for Leisure Travelers     Marketing Implications  Fare      ...
General Conclusion • Bundle for Business Travelers • Unbundle for Leisure Travelers     Marketing Implications  Fare      ...
With RichCustomerProfiles…
Predictive Bundling10/30/2012                         22
Predictive Bundling Recent Purchases         Current Search Parameters - Dates, Destinations    - Dates, Times, Destinatio...
Examples of             Predictive Bundling•One Checked Bag•Priority Boarding•Window/Aisle Choice10/30/2012               ...
Examples of             Predictive Bundling•One Checked Bag•Priority Boarding         • Lounge Day Pass•Window/Aisle Choic...
Examples of             Predictive Bundling•One Checked Bag•Priority Boarding                 • Lounge Day Pass•Window/Ais...
Challenges of       Predictive Bundling• Access to appropriate data sources   – Facebook, Twitter, LinkedIn, Klout, etc.  ...
Poll no. 3
Poll no. 4
Unbundled Travel Services             Traveler Perspectives and Technology Impact                                         ...
Unprecedented Complexity                    Proliferation of Choices                         Bags or No Bags            ...
The Business Traveler Dilemma      Please remember me         Services selected previously         Basic preferences   ...
Travel Manager Pain Points      Travel Policies out of control         A policy for every service         Impacts of bu...
Poll no. 5
Future Paths         The supplier Direct solution         The EMD Solution         The supplier API solution         F...
Technology’s Role/Impact      It’s all about Data         Big Data, Small Data, timely data         Access and Sharing ...
Conclusions      Traveler frustration will drive       change      TMC’s must adapt to the increasing       needs of the...
with Amadeus                                Brighter, Bolder, Better© 2010 Amadeus IT IT Group SA  © 2010 Amadeus Group SA
Q&A
Thank You!        Please send your questions and comments to Kevin May,          Please                          kevin@tno...
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How to market and sell unbundled travel

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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, Tnooz

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Transcript of "How to market and sell unbundled travel"

  1. 1. How to Market and Sell Unbundled Travel October 30, 2012
  2. 2. KKevin May Gene QuinnEditor / Moderator CEO / Producer
  3. 3. PanelistsBrian Beard Scott GillespieAmadeus Author, Gillespie’s GuideExecutive, Travel To Travel+ProcurementTechnology & Consulting Founder, Travel Analytics
  4. 4. Poll no. 1
  5. 5. Poll no. 2
  6. 6. Predictive BundlingScott GillespieAuthor, Gillespie’s Guide To Travel + ProcurementFounder, Travel Analytics
  7. 7. Types of Ancillary Revenues Flight-Specific Sources Other Sources • Bag Fees • Lounge Pass • Seating • Extra Miles/PointsAirline’s • Priority Boarding • Booking MethodProducts • Food & Beverage • Payment Method • Entertainment • Pillows, Etc.Partner’s • WiFi • Car, Hotel BookingsProducts • Catalog Sales • Destination Content, • On-Board Advertising e.g. Concert Tickets
  8. 8. 10/30/2012 8
  9. 9. To Bundle,Or Not To Bundle?
  10. 10. The Cost of Shopping HighCostToTraveler One Many Bundle Options Number of Choices Source: Scott Gillespie |
  11. 11. The Cost of Shopping HighCostToTraveler Cost of Unwanted Features One Many Bundle Options Number of Choices Source: Scott Gillespie |
  12. 12. The Cost of Shopping High Shopper’s TimeCostToTraveler Cost of Unwanted Features One Many Bundle Options Number of Choices Source: Scott Gillespie |
  13. 13. The Cost of Shopping High Total Shopping Cost Shopper’s TimeCostToTraveler Cost of Unwanted Features One Many Bundle Options Number of Choices | Source: Scott Gillespie
  14. 14. The Cost of Shopping High Total Shopping Cost Shopper’s TimeCostToTraveler Cost of Unwanted Features One Many Bundle Number of Choices Options | Source: Scott Gillespie
  15. 15. Bundling Makes Sense When High Shopper’s Time Is Very Valuable Total ShoppingCost CostToTraveler Unwanted Features Don’t Cost Much One Many Bundle Number of Choices Options | Source: Scott Gillespie
  16. 16. Bundling Makes No Sense When High Total Shopping CostCost UnwantedTo Features Cost a LotTraveler Shopper’s Time Is Not Valuable One Many Bundle Number of Choices Options | Source: Scott Gillespie
  17. 17. General Conclusion• Bundle for Business Travelers• Unbundle for Leisure Travelers
  18. 18. General Conclusion • Bundle for Business Travelers • Unbundle for Leisure Travelers Marketing Implications FareFamilies
  19. 19. General Conclusion • Bundle for Business Travelers • Unbundle for Leisure Travelers Marketing Implications Fare TravelerFamilies Personas
  20. 20. General Conclusion • Bundle for Business Travelers • Unbundle for Leisure Travelers Marketing Implications Fare Traveler AndFamilies Personas eventually…
  21. 21. With RichCustomerProfiles…
  22. 22. Predictive Bundling10/30/2012 22
  23. 23. Predictive Bundling Recent Purchases Current Search Parameters - Dates, Destinations - Dates, Times, Destination - Cabin, Seat Choice - Number of Pax - Days Advance - Number of stops - Price, Booking Class Airline Status Corporate Link? Co-Branded OA’s Likely Credit Card Bundle? - Ancillary Fees10/30/2012 23
  24. 24. Examples of Predictive Bundling•One Checked Bag•Priority Boarding•Window/Aisle Choice10/30/2012 24
  25. 25. Examples of Predictive Bundling•One Checked Bag•Priority Boarding • Lounge Day Pass•Window/Aisle Choice •$20 credit for on-board F&B, Entertainment, WiFi10/30/2012 25
  26. 26. Examples of Predictive Bundling•One Checked Bag•Priority Boarding • Lounge Day Pass•Window/Aisle Choice •$20 credit for on-board F&B, Entertainment, WiFi •Priority Standby for Upgrade •Best effort at empty middle seat • 50% off Change Fee, if needed10/30/2012 26
  27. 27. Challenges of Predictive Bundling• 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
  28. 28. Poll no. 3
  29. 29. Poll no. 4
  30. 30. Unbundled Travel Services Traveler Perspectives and Technology Impact © 2010 Amadeus IT Group SABrian Beard, Executive, Travel Technology & Consulting, Amadeus
  31. 31. Unprecedented Complexity  Proliferation of Choices  Bags or No Bags  Board early or take the risk  Bring food  Bring Wifi or take the risk Airline  Frustration and Inconvenience ancillary  Plane checked bags revenue  Slow Wifi  In your face advertising will  Travelers expectations reach  Know options ahead of time $36.1 © 2010 Amadeus IT Group SA  Easy payment Billion in  Listed in Itinerary 2012Source: Amadeus and IdeaWorksCompany Press release
  32. 32. 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 © 2010 Amadeus IT Group SA  Completeness of the Itinerary  Ability to change a reservation
  33. 33. 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 Most US  Reporting tool upgrades corporations  Expense systems have yet to set policies  Impact on supplier negotiations regarding  Addition inputs ancillary  Stability of unbundled services service © 2010 Amadeus IT Group SA  May be too early to tell offerings
  34. 34. Poll no. 5
  35. 35. Future Paths  The supplier Direct solution  The EMD Solution  The supplier API solution  Fare Families  System Integration  Data collection © 2010 Amadeus IT Group SAEarlier this year, Amadeus and IdeaWorksCompany reported the ancillary revenue disclosed by 50 airlines for 2011. These statistics wereapplied to a larger list of 176 airlines to provide a truly global projection of ancillary revenue activity by the world’s airlines in 2012. TheAmadeus Worldwide Estimate of Ancillary Revenue marks the third year Amadeus and IdeaWorksCompany have offered a projectionof global ancillary revenue activity.
  36. 36. 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 5 Billion  Evolution of the travel tool people will  Power to the traveler have  Social and More access to  Unbundled product will be increasingly impacted by social input mobile broadband © 2010 Amadeus IT Group SA  Multiple payment mechanisms will exist  Apps become the new widgets by 2016
  37. 37. 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 © 2010 Amadeus IT Group SA supply chain will be a key driver for change
  38. 38. with Amadeus Brighter, Bolder, Better© 2010 Amadeus IT IT Group SA © 2010 Amadeus Group SA
  39. 39. Q&A
  40. 40. Thank You! Please send your questions and comments to Kevin May, Please kevin@tnooz.comReplay of today’s webinar and presentation will be available tomorrow at www.tnooz.com
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