Post on 16-Dec-2015
Ancillary RevenueCommission based solutions for DMOs
February 2011
Ancillary revenue
A la Cartefeatures
LoyaltyPrograms
MediaCommission
basedProducts
Hot item for airlines
AirlineAncillary Revenue
as % of total revenue 2009
AllegiantSpiritRyannaireasyJetTiger AirwaysJet2.comAir Lingus
29.2%23.9%22.2%19.4%19.4%18.1%14.4%
Top 5 airlines ancillary revenue – Euros per passenger
2009 2008
€ 20.00€ 17.14€ 14.97€ 14.75€ 14.28
AllegiantUnitedAer LingusAmericanJet2.com
€ 9.95€ 9.55€ 8.52€ 7.35€ 7.17
AllegiantVuelingRyannairAer LingusLTU
Source: IdeaWorks
AirlineAncillary Revenue
2009
UnitedAmericanDeltaQantasRyanaireasyJetUS Airways
€ 1,527,310,000€ 1,507,750,000€ 1,117,120,500
€ 782,903,000€ 663,600,000€ 608,796,693€ 540,589,500
Ancillary revenue & hotels
Cross selling / upselling– Spa, Golf, sea sports, kids clubs, dinners, wine tastings etc.
Commission– sightseeing, tickets for events, concerts, theatre etc.
Media
Ancillary revenue & hotels
Process of buying travel
Dreaming Enthusing
SelectingPlanning
ComparingReviewing
Booking
Travelling
VisitingEnjoying
RecommendingEvaluating
2/3 weeks up to 3 months
Process of buying travel
Dreaming Enthusing
SelectingPlanning
ComparingReviewing
Booking
Travelling
VisitingEnjoying
RecommendingEvaluating
HotelsAirline
Up to several months
Car rental Up to one month
Sightseeing
Dinner reservations
When do people book:
Process of buying travel
Dreaming Enthusing
SelectingPlanning
ComparingReviewing
Booking
Travelling
VisitingEnjoying
RecommendingEvaluating
DMOCore Business
Process of buying travel
Dreaming Enthusing
SelectingPlanning
ComparingReviewing
Booking
Travelling
VisitingEnjoying
RecommendingEvaluating
DMOFull range
Process of buying travel
Dreaming Enthusing
SelectingPlanning
ComparingReviewing
Booking
Travelling
VisitingEnjoying
RecommendingEvaluating
DMOFull range
Airlines
Process of buying travel
Dreaming Enthusing
SelectingPlanning
ComparingReviewing
Booking
Travelling
VisitingEnjoying
RecommendingEvaluating
Airlines
Conversion rate for thirdparty products between 0.5% and 3%
DMOFull range
Travel search: the DMO site
In general, how useful are the following types of web sites forresearching a possible vacation destination?
Rate each web site using a 5 point scale
3.9
3.8
3.7
3.6
3.6
3.5
3.2
3.0
2.9
2.9
2.9
Destination site
Search engine
Hotel site
Travel search engine
travel reviews site
airline site
OTA
car rental site
cruise operator site
Tour operator site
Other
Source: PhoCusWright 2009
Why the DMO site?
Independent
Lot’s of quality content which– is searchable (text, images, videos, blogs etc.)
– keeps the (online) conversation going
Closest to suppliers, the setting and the place
Trustworthy
They are official
DMOs: why online booking systems?
Good position to ‘close the deal’
Market failure
Measure the effectiveness of your marketing
Market intelligence
Dynamic Packaging
DMOs: why cautious with online booking systems?
Provide information, not to make bookings
No commercial culture
Competition
Legal restrictions
Commercial message may disturb the general message
Commercial income? Cuts in public funding
DMOs: sources of income
Fees on sales of bookings
Merchandise shop
Affiliation programmes
Advertisements
– Context sensitive Ads
Advertorials that look like editorials
Through newsletters by including some editorial
Sell enhanced entries to tourism suppliers
Ecommerce & DMOs: lessons learnt
Visitbritain – Englandnet established in 2002: the national tourism database– 2004: formal complaint for illegal state aid and unfair
competition;– Englandnet was wrapped up and integrated into visitbritain;– Today they do not handle financial transactions or visitor’s
personal and financial details
Visitscotland – Established as a PPP in 2002 -> today public again;– it did not promote all accommodation providers;– overestimated industry’s appetite for online booking systems;– High number of visitors, low conversion– High cost leading to negative own capital– Web site: www.reclaimvs.com – Too optimistic business plan
Visitbritain
Visitbritain
Visitbritainshop
Visitbritainshop
Visitnorway (Q1 2011) / Visitsweden (online)The National Booking Switch
PropertyExtranet to DMS
PropertyPMS direct connect
Hotel groupSub headline
Hotel groupSub headline
FlightLow cost carrier
FlightRegular flight
Ferry
EventsSub headline
ActivitiesSub headline
AmadeusFlight
Train
iTicketrezView
CRS
NorwegianTravel SwithAnd National
Booking
Visitnorway.com
10 million visitor
White labelRegional DMO
Local vendorAPI (DMO, Supplier)
PMSDirect
DMSDest system
DMSDest system
DMSDest system
AmadeusFerry & train
OpenJawFerry & train
CRS
CRS
CRSSynxis, Rezidor, Pegasus RezView
PegasusSwitch
Visitnorway: search control examples
Visitfinland
Spain.infoHotel guide
Spain.info
Hotel guide
Spain.info
and start all over…
Spain.info
second window opens…
Spain.info
Spain.info
After clicking “book”third window opens…
Spain.info
and then the bookingpage opens in Spanish…
Visitcyprus
Goturkey.com - English
Goturkey.com
- Flights & Packages lead to Lovelyturkey
- Hotel leads to watchb4go.com
Enit.it / italia.it
Enit.it / italia.it
Enit.it / italia.it
Enit.it / italia.it
Enit.it / italia.it
Enit.it / italia.it
Visitportugal.com
Visitgreece.gr
FranceGuide
FranceGuide
FranceGuide
You do not see yet at which provider you are going to book…
FranceGuide
Business models – DMOs & hotel suppliers
Metasearch(list of prices)
Consumer
Supplier ASupplier BSupplier CSupplier D
Booking
NTO domain
Supplier ASupplier BSupplier CSupplier D
Visitbritain determines suppliersand establishes the link
Visitbritain
Contract
Metasearch(one price)
ConsumerBooking
NTO domain
Viamichelin
Supplier ASupplier BSupplier CSupplier D
Franceguide
Supplier ASupplier BSupplier CSupplier D
Contract
Business models – DMOs & hotel suppliers
Travel switch oftechnical provider
ConsumerContract
NTO domain
Supplier ASupplier BSupplier CSupplier D
Any supplier that uses thePlatform of the provider,
Subject to certain conditions
Visitsweden
Booking
Supplier ASupplier BSupplier CSupplier D
NTO domain
Supplier ASupplier BSupplier CSupplier D
extranet
Visitcyprus
DBSearch
Bookingat
private party
Consumer
Supplier ASupplier BSupplier CSupplier D
Contract
Business models – DMOs & hotel suppliers
Consumer
NTO domain
Supplier ASupplier BSupplier CSupplier D
KLM
PrivateCommercial
partner(ISEATZ)Search
Booking
Contract
ISEATZ determines suppliersand establishes the link
Consumer
Supplier ASupplier BSupplier CSupplier D
Contract
NTO domain
Supplier ASupplier BSupplier CSupplier D
Visitfinland determines suppliersand establishes the link
Visitfinland
Supplier ASupplier BSupplier CSupplier D
extranet DB
Travelplanner
Booking is recorded in the travel planner
Booking
Metasearch
CSF for implementing third party, commission based products
Credibility, awareness and trust
Customers knowledge...
…and offer what they really
need…
…and when they need it
Promote full offering
Choice
Easy access / simple
procedures
Feed sales data back into
your system
Measure!
Attractive prices