The airlines, data and targeted pricing

by Business Travel iQ | 10 August 2017

Personalisation is as much for corporate customers as for leisure travellers

Leisure market techniques for upping the revenue per passenger are finding their way into corporate sales.

Sellers aim to maximise yields/unit revenues in order to reach their business objectives just as consumers want to minimise their unit costs. Buyers would do well to watch what’s happening in the world of travel technology businesses to understand the modern supply chain’s pricing tactics.

Last week a business called Vayant Technologies was purchased by PROS, a specialist in dynamic pricing. Vayant is not a mass-market brand but it is well known to airline distribution gurus and revenue management departments. It is NDC Compliant Level 2 and also will work with other channels. The salient point is that it is committed to using whatever channel or data is relevant to find a suitable offer to convert a buyer, whether leisure or business, from a shopper to a customer.

Just as some politicians are learning only after elections that trying to close the stable door once the horse has bolted may be too late, so too are businesses discovering the true value of their data only once someone else has access to it.

Earlier this year BTiQ raised Cartrawler’s Bobby Healy’s warnings to carriers of the consequences of losing control of their data resulting from their common practice of paying Google to ensure that they came top of the search rankings.

Exclusive control of data is extremely valuable. In the not so distant past revenue coffers rose by raising fares. But that was before everyone discovered how easy it was to practise price discrimination.

And the fact that Vayant has been purchased by a larger, cross-industry player means that targeted, dynamic air fares will only grow. The more that specialists move into creating bespoke offerings which airlines can use to increase yields, the more such supplier tactics to derive more money from any single passenger, or seat, gain credence.

That’s fair. That’s business. But buyers need to be aware that this new generation of technology-enabled distribution uses technology not to make a universal, slick system but to analyse data to design a package – and, most critically, at a price – which a buyer wants.

Data can be used to create distinct offers to appeal to different corporate clients. Unlike the traditional deal, where a year-long corporate fare is agreed after prolonged two-way negotiations, these packages can be targeted in terms of the corporate’s taste in areas such as destinations, class of travel or attitude to direct flights as well as taking account of pre and post-flight factors such as booking behaviour, T&Cs and use of ancillary facilities like airport transfers and lounges.

Some benefits are more attractive to some groups of customers than others and each corporate customer will be more sensitive to some product and price changes than others. Such data acrobatics can identify the product and the price which is likely to move someone from a potential client to a client.

Your suppliers will know your trigger points – do you know theirs?

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