Embed Size (px)
DESCRIPTION
I am speaking at a Revenue Mgmt and Travel Merchandising conference in London. Travel merchandising is certainly a huge opportunity for airlines and other travel suppliers. I will discuss learnings from Frontier Airlines and others. Pricing and revenue management play a critical role.
Citation preview
1©2011 Tom Bacon Consulting, LLC. Proprietary and Confidential.
The New World ofTravel Merchandising
Tom Bacon ConsultingDecember, 2011
2©2011 Tom Bacon Consulting, LLC. Proprietary and Confidential.
Airline Commodization
Travel Distributors:Price Focus
Airlines Match Fares; Cut Costs
Commodization: Svcs Cut;
No Differentiation
Successful Third Party Distribution
3©2011 Tom Bacon Consulting, LLC. Proprietary and Confidential.
Airline Commoditization
4©2011 Tom Bacon Consulting, LLC. Proprietary and Confidential.
Airline Differentiation
New Value Added Services
Airlines Match Lowest Fares; but
Offer Customization
New Customer Engagement
Successful Direct Distribution
5©2011 Tom Bacon Consulting, LLC. Proprietary and Confidential.
Airline Differentiation
Full-Service Fares
New Ancillary Svcs
LCC Fare Match
Ancillary Service Fees
All Inclusive
New ancillary fees:
• Allow fare match with LCC’s• Introduce new revenue streamso Increase total revenue
• Provide customers with new choiceso New customer engagemento Reduce costly behaviors
• Tend to drive traffic to websiteo Not fully supported by third
partieso Lower cost distrib channel
…AND…
$
6©2011 Tom Bacon Consulting, LLC. Proprietary and Confidential.
Travel Merchandising
Full-Service Fares
New Ancillary Svcs
LCC Fare Match
Ancillary Service Fees
All Inclusive
Travel Merchandising
E-commerce; CRM;Science of Choice
Generic
Sell-up
MarketSegmentation
BrandedFares
FreqFlyerPerks
TrvllrID’s
Personal-ization
INTRODUCING A WHOLE NEW WORLD OF AIRLINE MARKETING
7©2011 Tom Bacon Consulting, LLC. Proprietary and Confidential.
Travel Merchandising
• Most travel suppliers have not recognized the shift in customer needs
• Allegiant Airlines, however, positions itself as a travel merchandiser – not simply an airline
Advertising, referrals, non-air promotions include hotels, car rental, and events
30% of revenue is not fare-related (2X airline average)
Travel Merchandising
E-commerce; CRM;Science of Choice
Generic
Sell-up
MarketSegmentation
BrandedFares
FreqFlyerPerks
TrvllrID’s
Personal-ization
8©2011 Tom Bacon Consulting, LLC. Proprietary and Confidential.
Travel Merchandising
Full-Service Fares
New Ancillary Svcs
LCC Fare Match
Ancillary Service Fees
All Inclusive
Travel Merchandising
E-commerce; CRM;Science of Choice
Generic
Sell-up
MarketSegmentation
BrandedFares
FreqFlyerPerks
TrvllrID’s
Personal-ization
ARE YOU FULLY EXPLOITING THIS NEW WORLD?
9©2011 Tom Bacon Consulting, LLC. Proprietary and Confidential.
Tom Bacon ConsultingRevenue Optimization
Pricing* Revenue Mgmt
* Ancillary Service Fees* Revenue Forecasts
Product* Network Mgmt* New Markets
* Distribution / e-commerce
Planning* Profit Mgmt
* IT Systems* Corp.Developmt
30 Yr Track Record of Success
…across the Travel Industry
Pricing & Rev Mgmt
$20 B Global Airline
Schedules/ Route mgmt
>$1 B Low Cost Carrier
Mkg, Sales, & Distribution
>$1 B Independent Regional Airline
FP&A Travel Distributor (IT)
REVENUE
OPTIMIZATION
