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Ancillary Revenue Destination Content Example
- 1. Destination Content The Next Level for Ancillary Revenue © 2009 Amadeus IT Group SA Amadeus Airline IT How and when you sell ancillary items is more important than what you sell. 1 Martin Collings, Amadeus Airline IT
- 2. Destination content – is it the next big thing? Possibly… No airline has yet perfected the selling of this product Attach rates on some airline sites are under 0.1% Fliers either buy from airline, or when they arrive Airline knows where and when traveler is going Airline knows who is going (family/couple/solo) Airline knows traveler’s service preference (eco/biz) Requires opt-in (some opt-in results > 70%) © 2009 Amadeus IT Group SA 2
- 3. A Hypothetical Example for KL …followed by the revenue projections Scenario: Two adults spending one week in Kuala Lumpur © 2009 Amadeus IT Group SA 3
- 4. A Hypothetical Example for KL …followed by the revenue projections Three Weeks Prior To Departure Subject Sandakan Orangutan Rehabilitation Center From: destination.content@airline.com To: mr.smith@passenger.com Dear Mr Smith, In three weeks your flight XX123 leaves for Kuala Lumpur. If you have 8 hours free one day, a must see is this © 2009 Amadeus IT Group SA sanctuary for about 25 young and orphan Orangutans apart from 60-80 other Orangutans who roam freely in the reserve. It is the largest Orangutan sanctuary in the world. Click here for many other experiences in KL $62 pp inc hotel pickup starting at under $20 per person 4
- 5. A Hypothetical Example for KL …followed by the revenue projections Two Weeks Prior To Departure Subject Kuala Lumpur by Night From: destination.content@airline.com To: mr.smith@passenger.com Dear Mr Smith, In two weeks your flight XX123 leaves for Kuala Lumpur. Other passengers of ours always speak highly of the night © 2009 Amadeus IT Group SA bazaar in Petaling Street in Kuala Lumpur’s Chinatown. This 4 hour tour also includes a traditional Malay feast. Click here for many other experiences in KL $30 pp inc hotel pickup starting at under $20 per person 5
- 6. A Hypothetical Example for KL …followed by the revenue projections One Week Prior To Departure Subject Fireflies Tour in Terengganu From: destination.content@airline.com To: mr.smith@passenger.com Dear Mr Smith, In one week your flight XX123 leaves for Kuala Lumpur. The fireflies in Terengganu have created one of the most © 2009 Amadeus IT Group SA fascinating natural wonders in Malaysia; every night hundreds of fireflies light up these mangrove swamps with their fabulous synchronized flashing patterns. Click here for many other experiences in KL $32 pp inc hotel pickup starting at under $20 per person 6
- 7. A Hypothetical Example for KL …followed by the revenue projections Two Days Prior To Departure Subject Airport transfer to and from your hotel From: destination.content@airline.com To: mr.smith@passenger.com Dear Mr Smith, In two days your flight XX123 leaves for Kuala Lumpur. To make your journey as hassle free as possible, we can © 2009 Amadeus IT Group SA offer you a two way transfer to and from your city hotel. Many other passengers also take this option to ensure their arrival in KL is as smooth as possible. Click here for many other experiences in KL $17 per person starting at under $20 per person 7 *this transfer example is based on a Singapore product
- 8. Potential Revenue Scenario: Two adults spending one week in Kuala Lumpur Orangutans $62 Night Tour $30 Fireflies $32 Hotel Transfers $17 Total (one, then two persons from PNR) $141 $282 Airline Commission (assume 8%) $22.56 Direct channel PNR’s per year 200,000 3,000,000 Opt-in rate 70% 70% © 2009 Amadeus IT Group SA - PNRs that can be targeted 140,000 2,100,000 Conversion Rate 2% 2% Annual Airline Ancillary Revenue $63,168 $947,520 8 Note: Potential revenues have not accounted for additional purchases a passenger may make when clicking through on the email, so they may be conservative estimates.