Questioning the travel industry status quo, one blog post at a time

Posts Tagged ‘unbundled’

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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 »

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?

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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 »

I just returned from the Travel Distribution Summit Europe 2011, which was attended by some of the biggest, coolest companies—Google, Facebook, Foursquare and… Farelogix (insert wry smiley face emoticon here).

I was fortunate enough to be invited to speak on mobile merchandising for the Ancillary Revenue and Merchandising track of the conference. Now, after attending a number of travel conferences over the past few months, and finding most of them dodging the real issues around airline merchandising and ancillary services, my expectations were not high. To be brutally honest, I kind of expected the same old thing—lots of discussions and presentations by vendors and paid sponsors, but very little relevance. But since I tend to use these various conferences as travel hubs for other business meetings set before and after, I can still be quite productive even if the event is less than.

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On March 30, 2011, a group of top GDS executives from Sabre, Travelport and Amadeus and their attorneys gathered at the New Executive Office Building (which by the way, is far from being new) in Washington, DC. The building is home to the Executive Branch’s Office of Management and Budget, or OMB.

Not too long ago there would only be two places you would see GDS executives of this stature gathered in a single spot. One would be at a travel industry conference. They would be on stage, battling it out as fierce competitors over who has the better technology and who can offer travel agencies, airlines and other travel suppliers the best distribution value. The other would be at the felt playing a high-stakes game of poker. I miss those days, but I digress.

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Remember the good ol’ days of air travel? You know, back in 1995 when things were easy. We didn’t have to deal with all these ancillary fees – we could just check our bag and get a delicious Saran-wrapped piece of “chicken,” and all for “free.” Everything was included and CHEAPER! Remember that?

Well, and I hate to be the bearer of bad news, that’s just not the case. According to the Bureau of Transportation Statistics, the average price of an airline ticket has decreased from 1995 by 19.6%. In constant dollars, the price of your base airline ticket is down almost one-fifth!
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Last week, I introduced a blog series on merchandising. The first installment focused on the fact that there is a wide range of opinions and emotions across the travel industry regarding this new phenomenon called merchandising. I also pointed out that there is a fair amount of misinformation and misunderstanding on the topic, and this often inhibits effective discussion and debate. So, in the hopes of leading to more fruitful and informed discussions for all of us, this second installment is a short primer on merchandising lingo. The intent here is to give us all a baseline understanding about this powerful movement that is unfolding in our industry. Read the rest of this entry »