May 2017, London
Dynamic packages: the big opportunity on a less beaten track
From flash sales firms to big OTAs, dynamic packages open up a whole new avenue of growth in 2017
Whether it’s big travel companies getting bigger and better through acquisition, tech entrepreneurs carving out new markets to change consumer behaviour or more spontaneous, digitally savvy consumers driving innovation in travel, it’s hard to keep up.
In the fast-growing niche of travel flash sales, for example, demand seems to be driving innovation for travel hungry consumers. In the market for luxury hotels, a whole raft of players including Secret Escapes, Voyage Prive and Jetsetter have sprung up in recent years offering savings of as much as 70%.
Meanwhile, a broader range of national and international deals comes from players such as Groupon Getaways and Living Social. And with the growing popularity of alternative lodgings, in the vacation rentals, space flash sales have been identified as a gap by firms such as UK-based Snaptrip.
So how do companies differentiate?
One of the opportunities that travel brands – and not just flash sales players – have identified for 2017 is dynamic packaging. The common view is that what is needed is a shift towards more flexible packages with, possibly, flights and other forms of travel included.
According to Sebastian Fallert, UK managing director for Secret Escapes, its data shows that consumers are on the hunt for “the best-in-market product and to book when it suits them”.
In other words, they don’t want to be restricted by defined date parameters, and they want to choose when and how they want to travel.
…dynamic packaging opens up a whole new avenue of growth
Being able to deliver this is good for consumers but it also has business benefits. “From our point of view, dynamic packaging opens up a whole new avenue of growth and allows us to broaden our offerings,” he says.
It’s also a trend that eDreams ODIGEO has spotted.
Says Gerrit Goedkoop, chief operating officer:
“We’re also seeing a rise in dynamic packaging which allows customers to choose the services they need when they’re booking, not just flights and hotels but also things like hire cars, trains and other ground transportation options.”
Data from this European OTA shows many consumers putting convenience and value over brand loyalty.
“A huge number of our customers will create trips where they fly out with one airline and back with another, and I think this trend is set to grow in 2017 across a whole range of travel sectors.”
Creating memorable experiences
Another European development that continues to grow from a strong base is short breaks. Trips to perennial favourites such as Lisbon, Barcelona and Rome remain popular, but ODIGEO is also seeing a surge in bookings to less trampled cities such as Turin, Rotterdam and Inverness.Increasingly data shows that customers are looking for experiences and they want to create memories. Demand for this is expected to continue and is being driven by three trends:
• People are increasingly convenience-driven and time-poor
• Material goods are becoming more affordable and more readily accessible
• Use of social media – there is nothing like the perfect Instagram to drive travel envy
Says Fallert:“Our members are on the look-out for extra inclusions, whether it’s a Northern Lights tour, snowmobiling in Iceland, or a massage treatment and an afternoon tea at a top UK spa hotel.”
But travellers are also a diverse bunch. Maybe not such good news for Secret Escapes, as ODIGEO’s data shows that consumers aren’t always looking for the luxury, all-inclusive hotels that may be further out of the city.
Says Goedkoop: “We see many travellers looking for good quality, centrally located accommodation that will give them maximum opportunities to explore on their own.”
Bottom line? People want adventure but they also want convenience and on a short break, they don’t want the hassle of trying to arrange these things after they’ve arrived at their destination.
It’s exactly this demand that has helped the rise of firms such as Airbnb, spurring its push into tours and activities. And, of course, Airbnb does not exist in isolation and its presence is prompting hotels to look at ways they can meet the demand for ‘alternative accommodation’ in cities – hence Accor’s acquisition of Onefinestay, which has over 2,500 properties in cities that include London, New York, Paris, Los Angeles and Rome.
Dynamic packages are made more possible by technology. Consumers are able to do more research before they leave; they are able to book almost any aspect of their trip in advance. Getting this right will be the challenge for suppliers, particularly on mobile where the shift towards bigger screens and improved usability is already leading to higher conversions.
dynamic packages are about meeting the needs of each individual customer in a matter of seconds and bringing together unique combinations
According to Goedkoop “now more than ever, we all need to be constantly innovating”. But the warning from Fallert is that brands should also “be looking into new innovations and technology to make dynamic packaging a viable option, before investing in the user experience of this feature.”
For Goedkoop while dynamic packages are about meeting the needs of each individual customer in a matter of seconds and bringing together unique combinations of different flights, hotels, transportation and ancillary services, it doesn’t stop there.
“We need to be able to support that individual level of service throughout the traveller’s experience,” he says, “by investing in 24/7 customer service, in apps and mobile content so customers can research and book from anywhere, and in having a team of really smart developers who are constantly challenged to think about how they can provide even greater value for our customers.”
One could say that dynamic packages need to dynamite.
eDreams ODIGEO’s Gerrit Goedkoop and SecretEscapes’ Sebastian Fallert will be speaking alongside other well know brands and emerging innovators at bigger than ever EyeforTravel Europe (May 3-4)