By EyeforTravel.com Correspondent in London<br><br>As dynamic packaging continues to gain prominence, the buzz around it
Published: 13 Nov 2005
By EyeforTravel.com Correspondent in London
As dynamic packaging continues to gain prominence, the buzz around it being a real opportunity for suppliers continues to get stronger.
This aptly came to the fore during the `Dynamic Packaging - A holistic solution' session in the Travel Distribution Technology 2005, being held in London.
Dynamic packaging allows hoteliers to move inventory while maximising profits, and provides the consumer choices that suit their tastes, preferences and financial needs, according to Henrik Kjellberg, managing director Supply Europe, Expedia Europe.
"Consumers' choices have evolved from single, stand alone products, such as hotels or flights, to now include full service 'package' offerings. From their debut in early 2001, dynamic packages have enabled consumers to create trips with different combinations of multiple trip components all sold together for one price," said Kjellberg.
On benefit for suppliers, he added, "It's a win-win situation for suppliers and consumers." He also highlighted issues such as opaque model, which hides component prices to provide additional pricing and margin flexibility allowing suppliers to discount product further without impacting general market pricing one composite price and the opportunity to maximising yield - growing your business.
During the same session, Paul Evans, chief executive officer, Lowcostbeds.com, which offers holidays, aimed at independent-minded holidaymakers, says it's a segment which is growing, with an ever increasing appeal.
"Certainly you can see consumers becoming far more confident in self packaging, and as this increases the market will keep growing. If you look at the growth of online sales just in the past year, you can clearly see this happening right across the board," he said.
On how the concept of a package has changed with online travel, Evans recently told eyefortravel.com, "It's a question of what is the value of static packages anymore? What a dynamic packager like lowcostbeds.com can offer our customers is all the elements of a package, and if they want the complete package they can, if not they can change individual items to suit their individual needs. What is also important is that lowcostbeds.com is not tied to in house suppliers - for example on a flight we can offer a choice from over 30 airlines, which gives customers greater flexibility and access to a wide selection of prices. This increase in choice has changed customer expectations, which they have responded favorably to and hence has increased demand."
Vic Darvey, Group Commercial Director, OTC said as per the trends witnessed in the last 12 months, its proved to be an average year for travel, albeit online still exploding. He said that Europe continued to follow the US channel shift - online agents taking 15% of European market share. According to Darvey, the online sector is expected to grow 20% in 2005, the dynamic packaging expected to grow by 60% + and there is an explosion of component flexibility and 3rd party distribution .
On how the market has changed, Darvey said, "Air commission reductions have been the primary driver for product adjustment, emergence of the "merchant model" has changed the pricing model forever 25% vs. 10%, total transparency has created downward pressure on prices and margins, rapid growth of 3rd party online distribution has created a distribution power shift, new technological advancements creating higher traveller expectations. The result: a new leisure marketplace has been created."
Terming the outlook as "good" one, Darvey said, "Overall travel sector will continue to grow. Dynamic Packaging will drive growth - £2.4bn in two years. It is creating its own space - compliment not threaten." He added, "To take advantage: shift in focus to longer-term technology goals, business models need to adjust to support this - greater product flexibility and technology needs to be developed to service new channels."
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