"Today's traveller is an information consumer who thrives on channel jumping"
TDS Asia 2008 Special, SingaporeThe recent years has seen emergence of several new airlines business models. In such scenario, how has the definition of a `traveler' evolved?
Published: 19 Mar 2008
TDS Asia 2008 Special, Singapore
The recent years has seen emergence of several new airlines business models. In such scenario, how has the definition of a `traveler' evolved?
Do we need to understand that travelers are not a LCC customer or a traditional customer, but rather the modern traveler who mixes and matches based upon the requirements for that journey and their perception of the value of the product on offer?
From a GDS' perspective, Hans Belle, Vice President, Sabre Travel Network, Asia Pacific, a speaker during EyeforTravel's Travel Distribution Summit Asia 2008 conference being held in Singapore, says there's no 'traditional customer' anymore.
"Today's traveller is an information consumer who thrives on channel jumping to get what they want in their daily life—and when purchasing travel. So yes, we agree that the purpose of the trip outweighs the individual traveller profile—which is still an important tool to understand their habits. Today's traveller might not mind a cheap, less conveniently-scheduled last-minute vacation trip booked via an online travel agent or airline site. But they then might seek help from a specialised leisure agent for a complex family trip. Then for business travel, that same traveller might use GetThere, or the corporate agency, to comply with corporate business travel policies," Belle told EyeforTravel.com's Ritesh Gupta.
He added, "So how should airlines or other suppliers approach distribution to succeed given this now being the 'normal' traveller behaviour? Tt's about choices—airlines or other suppliers—need to be in front of that traveller wherever they want to buy. This means it's vital for airlines to have a multi-channel distribution strategy. Direct and indirect channels generally compliment—rather than conflict with—each other because of the fundamental difference in shopping behaviour for different types of trips. It's critical for an airline to understand what trip types it wants to serve, how these types of trips are purchased, and what the revenue per dollar of cost is for each channel before making distribution strategy decisions."
According to Belle, yield is obviously crucial—and tickets with highest yield tend to be for trip types fulfilled by travel agencies.
"Fares sold through the Sabre GDS typically average 20-40% higher than the airline's direct sales. Most of the bookings made by the four largest corporate travel agencies in the world are made through Sabre.
Distribution is a vital cost for airlines - and like any business cost it must be weighed against the income it produces. Sabre continues to spend millions on R & D to ensure its customers have the tools and visibility to meet the continuously-evolving needs of today's - and tomorrows - information-savvy traveler," he said. "Sabre also ploughs time and effort into research to track trends and predict needs of the 'traveller of the future'--and these are other vital elements when understanding distribution in light of the needs of the traveller."