Member Article

Travel businesses look to up-sell non-travel products

The travel industry is gearing up to increase ancillary revenue in the new year, research has found.

A survey from global provider of revenue and membership products, Collinson Latitude, has shown that many travel businesses will change their strategies to drive revenue.

Almost half of respondents (49%) believe cross-selling and up-selling through the booking process will be the fastest-growing area of ancillary revenues for travel businesses in 2012.

Jane Titterton, director of Collinson Latitude, said: “We surveyed loyalty and ancillary revenue managers, particularly across the airline industry, and the results encouragingly prove the industry is seeking to maximise the benefits of customer data insight.

“With travel companies holding so much knowledge about their customers, cross-selling and up-selling strategies can be tailored to match benefits and promotions to customers’ wider profiles.

“This targeting can increase the attractiveness, perceived value and ultimate success of ancillary revenue programmes.”

The survey also shows that conventional travel related offers will continue to be important in ancillary revenue programmes.

19% of respondents predicted greater cross-selling and up-selling of travel-related products through the booking process, and 21% predicted an increase in on-board ancillary revenues for airlines.

The findings highlight the fact that airlines and other travel companies must be careful not to alienate customers by focusing too heavily on profits.

Jane continues: “Traditional travel-related ancillary revenues will clearly remain important. For example, 22% of survey respondents currently implement ancillary revenues by unbundling previously packaged products and services.

“However, this process need to be handles carefully: although ancillary revenues can bring costs down for customers, as unwanted services are no longer paid for, the perception if often very different.

“As services previously viewed as ‘free’ become billed separately, the travel industry needs to demonstrate to customers that such services really do provide choice and value for money.”

This was posted in Bdaily's Members' News section by Tom Keighley .