The Miami Boat Show was not the only hip and happening thing in Miami last week. Farelogix held a Media Day! We had speakers, food, cocktails, and lively discussion from industry thought leaders Henry Harteveldt, Norm Rose, Montie Brewer, Andy Menkes, and Doug Lavin from IATA. They all provided perspectives, trends, predictions, antidotes, and tales of industry successes and woes.

Here are a few key points I walked away with:

© Ivelin Radkov – Fotolia.com

-  Consumers want choice when it comes to airline products. In fact, the more the better.

- The concept of democratizing ancillaries (i.e., allowing infrequent travelers the opportunity to purchase products and services normally only available to the elite travelers) is a good thing

- Traveler authenticated search and offer is the new normal, even if it is a deliberately anonymous request.

- Airlines must compete at each and every transaction.

- Mobile is not a channel, it’s everything.

- IATA’s NDC initiative is nothing more than a technology schema standard (developers roadmap) and optional workflow process where the distribution aggregator (yes, including the GDSs) makes a real-time offer request to the airline at the time of initial search (kind of like how the GDSs deal with a number of LCCs today).

And, oh, the product demos! Yes, they were our demos, but nevertheless, they were sensational!

We introduced and showed off our new Airline Commerce Gateway. We produced an array of real, live transactions (no PowerPoint or screen captures here) to demonstrate how airlines and travel agencies, and even GDSs will benefit when an airline implements the Airline Commerce Gateway powered by Farelogix.  Read the rest of this entry »

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It’s hard to go a day without reading an article about how airlines are “nickel-and-diming” travelers with new fees. It’s a popular sound bite. But what is the real impact of these “fees” on passengers?

Believe it or not some passengers today are opting to pay additional charges for things like checked baggage, premium seating, and priority boarding to add value to their trip experience. Other travelers enjoy these services—called ancillary products and services—complimentary based on frequent flyer status, affinity credit card usage, and other variables. Some of these services used to be included in the price of a fare, such as checked bags, while some of these services didn’t even exist ten years ago, such as onboard Wi-Fi. Undoubtedly, some travelers feel that the airlines are squeezing every last penny out of them, and they are paying more for air travel than they used to. However, the numbers suggest that travelers are seeing considerable savings as compared a decade ago. Read the rest of this entry »

TakeTravelForward recently posted an article on airline distribution and how it is time the industry shift to a consumer-centric marketplace as opposed to one where an intermediary controls the product offers to airline travelers. They also produced a series of videos on the same subject. We thought it was worth reposting on our blog in case you missed it. Enjoy!

Today, airlines are competing for consumers in ways never imagined just a few years ago. For decades much of the airline industry had been relegated to a commoditized offer of an available fare and schedule. In fact, the inability of airlines to differentiate their product offerings led to what many viewed as a “race to the bottom” in terms of innovation, service, and the entire experience from “buy to fly.”

But why did this happen? Did the airlines really want to give consumers a bad experience? Of course not. They simply could not maintain profitability in an era of rising fuel prices and a mass commoditization of their product.

The turmoil in the industry today reflects that the pendulum is now swinging back, as airlines strive to offer consumers new and better travel experiences that are unique to the airline. But the shift is not so easy, and there is friction across the industry. While airlines are willing to share any information necessary to deliver customized offers to travelers, friction is inevitable as airlines try to achieve these changes against a backdrop of an entrenched business model that may serve the dominant industry intermediary (the GDSs) well but has left consumers as a mere afterthought.

Today’s consumers are unique and different, and so are their trips—vacations, business trips, weddings, and more. Consumers want to be treated special, rewarded for loyalty, given options and choice, and know they’re getting the best deal.

The Internet has given us the power to search and comparison shop for the best deal, and the notion of “one-size-fits-all” has been replaced with “Real-time, Transparent and Personalized.” Consumers enjoy and expect these benefits in today’s transparent retail world, and it should be no different when they search for and purchase air travel. Now is the time for the travel distribution industry to join in.

 
Episode 1: Do You Really Know What Happens When You Shop For An Airline Ticket?

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I truly love this industry, especially the airline industry, and most especially the airline distribution subset. It is chocked full of opportunity, drama, tension, and lots of industry panels talking about how things need to change and get better.

So, the other evening I put on my fuzzy-toed bunny PJs, microwaved some popcorn, and curled up with my laptop to watch a rerun stream of a panel about airline distribution that was held just a day before in Beijing, China during the annual IATA conference.

http://www.iata.org/events/agm/2012/Pages/panel-airline-distribution.aspx

The panel included a full stage of industry execs from airlines, GDSs, and Google. Oh this is gonna be good….some notable heavyweights in the industry are poised to get it on! And get it on they did…in the form of a thought-provoking discussion focused largely on the 60 percent of airline distribution that goes through the travel agency channel. I thought I would attempt to characterize and share with you some major takeaways after 59 minutes. Here we go. Read the rest of this entry »

This is not a question. It’s a statement of reality. The concept of personalization exists in our daily lives because we, as consumers, demand it and will continue to demand even more of it. Why? Because it creates a better customer experience whether we are buying books, a car, or travel. In the travel space (with the notable exception of the airlines), personalization has been with us for years—well before the Internet.

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Way back when, we used to order up a hotel room by contacting the hotel reservations center using an analog voice transmitter (a phone, I think it’s called), and we experienced personalization. We entered into an analog dialogue and were offered choices: a king bed or two queens, smoking or non-smoking, breakfast included or not. Not necessarily the most efficient process, but there it was—personalization, plain and simple. The Internet hasn’t given us personalization; it’s just made it cooler, easier, and much more sophisticated. Hold on to your hats, but thanks to robust databases, user profiles, and CRM, we have evolved into the era of the digital dialogue between buyer and seller. We now get to see the 360 poolside room view before we buy and we are electronically offered a variety of packages and services based who we are, what we want, and dynamic product availability. Read the rest of this entry »

Did you know travel agents are working around the GDS to meet customer demand for booking airline ancillary products and services? In fact, “nine in 10 corporate agents and more than 70% of leisure retail agents have booked air ancillaries over the past year.”

Wait. That quote can’t be right. I must have read it wrong. Due to technological limitations that restrict the meaningful display of ancillaries in the GDS, almost no airline ancillaries are available for sale through GDSs. I know because the GDSs and their allies are trying to push for government regulation to require airlines to distribute and display their ancillary products and services through the… well, let’s just say the less-than-modern GDS channel.

But no, I read this recent Travel Weekly article three times and that’s what the quote says. The article reports on a PhoCusWright study that states, among other things, “Agents’ willingness to book [ancillary products] without compensation implies that the demand for handling ancillaries as part of the flight reservation is customer-driven.” So there we have it! Despite these agencies getting no help from their GDS, they are finding ways to sell ancillaries. It’s really no surprise when you think about it. Travelers, like all consumers, want choices and options, and travel agents are once again demonstrating resilience when it comes to meeting the needs of their customers!

© shotsstudio - Fotolia.com

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Debate is never in short supply in our industry, and a topic of choice these days is what some are calling “Ancillaries Vs. Merchandising.” So—surprise, surprise—I figured I’d weigh in on the subject. Maybe we should start with some basic definitions, and you know where I always turn for the most accurate 411…Wikipedia. Wiki says… an ancillary provides necessary support to the operation of an organization. Yuck, who wants to pay for that? It’s no wonder airline consumers don’t like “ancillaries” if all they are is support for the airline. Where is the consumer in all that?

© Flexmedia - Fotolia.com

Maybe the term “merchandising” shines a different light. Wiki says that merchandising is any practice which contributes to the sale of products to a retail consumer. Okay, that’s a bit better. At least there’s the notion of a consumer in that one.

Here’s what I think we should do. Let’s only use the term “ancillary” to mean the actual product or service an airline can offer that compliments the purchase of the airline seat. In fact, I think we should drop the term “ancillary” all together and just say “product” or “service.” Ancillary reminds me of the old airline term “change of gauge” (which basically means changing planes to a connecting flight). Why do we insist on continuing to use so many consumer-unfriendly terms? Are we trying to scare consumers off or just continue to confuse them with these archaic terms and processes?  Read the rest of this entry »

To borrow a line from almost every late night talk show host, “I couldn’t make this stuff up.” But I can blog it!

I’ve been accused from time to time of being a purveyor of black magic, a spellbinder of XML incantations, an agitator, a snake oil salesperson, an innovation bigot, and a man with a bobblehead’s brain. But one thing I’ve never been called is a “flip-flopper.” I tend to stick with my basic belief that through a combination of innovation, creativity, great people and a competitive landscape, valuable and far-reaching strides are happening in airline distribution… all to the benefit of airlines, travel agencies, and consumers. I wish I could say the same about some other folks in the industry.

Glass Concept Home by Santambrogiomilano

Anyone not living in a cave is aware of the tremendous distraction taking place in our industry by cries that airlines are “hiding fees.” It’s getting so bad that a huge lobbying effort is taking place to get the US Department of Transportation (DOT) to mandate new onerous regulations on disclosure and transparency… all under that guise that it’s to “protect consumers.” There seems to be a virtual swinging door at DOT headquarters with pleas from ITSA, ASTA, BTC, and the GDSs to force, through regulations, the airlines to be more transparent and disclose all airline optional services and related fees.

Of course, this is all in the name of “consumer protection.”

Read the rest of this entry »

Articles about travel agents and ancillaries have been all over the web lately. First I read this one. Then I read this. And then this. I felt like I was reading the same article over and over and over. Then it hit me — Groundhog Day.

No, I’m not talking about the day when we pull Punxsutawney Phil from his burrow in Pennsylvania to see if he’ll see his shadow or not. I’m talking about the hilarious movie Groundhog Day (yes, the movie takes place on Punxsutawney Phil’s special day). In the movie Bill Murray keeps living the same day over and over… and over. And it seems to me that the conversation surrounding travel agents and ancillaries is stuck in a similar pattern. Read the rest of this entry »

It finally happened. We had the opportunity to go head-to-head, on stage, in front of some of the world’s most influential travel people. The topic? I won’t make you guess. It was titled Direct Connect: Horror Vision or New Option for Ticket Sales, but unofficially billed as the “Duel in Deutschland.” Don’t believe me? See below.

Okay, so we made that video up. But the “duel” did actually take place, but in Cologne, Germany. What? Safer on foreign soil? Believe it or not, this “duel” was the first time I remember meeting Kevin Mitchell in person. He’s not a bad guy, though I disagree with most of his assessment of Direct Connect, but that’s okay. I just think he might be getting his information about Direct Connect from the wrong places. It’s kind of like saying you don’t like a movie based on what other people have told you. Or saying you don’t like a certain food before you’ve even tried it. You know, like broccoli. Where have I heard that before?? But I digress.

But it did make me think. Why did it take a foreign travel publication to bring the two of us together when we (the US travel industry) have so many forums, conferences, panels, and seminars? Aren’t we the ones embroiled emotionally, operationally, and even legally in the Direct Connect movement? Kudos to FVW for making it happen.

As for the actual “duel”, I did agree with Mitchell on a few of his points, although, not many.

I agreed when he said competition and free markets is good and the customer will ultimately decide whether a product is good or not. Yet all I see is that a tremendous amount of effort being spent by a number of folks attempting to stifle competition and keep Direct Connect out of the potential customers hands. Why?

I also agreed with Mr. Mitchell when he stated hidden fees and lack of transparency are bad for our industry, or for any industry for that matter. But to equate those attributes to Direct Connect, when I presented facts and visuals that Direct Connect actually provides customers with more transparency and more choices than they get today, seemed a bit strange to me. That’s when I realized that most likely Mr. Mitchell has probably never even seen a real-life Direct Connect.

So I invited him to come to our office for an honest to goodness, fully transparent, deep dive into Direct Connect. Who knows, he might even like it after he tries it. It has to be better than broccoli.

Presentation from FVW Congress to follow…