Merchandising and ancillary sales mean profit
“Travel agents are slowly adapting to a new fragmented travel booking ecosystem created by the variety of booking tools used to buy a more diverse set of ancillary products.”
So says a Skift report on why some agencies are still reluctant to sell ancillaries – a process that has somehow become fraught with challenges.
Some agents want airlines to pay them commission on the ancillary products they sell to their clients, arguing they are at a severe disadvantage when selling these add-ons when compared to airline booking sites.
Skift cites data from IATA and the Atmosphere Research Group polling 1,034 travel agency executives in the US, Brazil, Australia, Canada and other countries, revealing 41% of travel management companies (TMCs) and 38% of retail leisure agencies believe airlines have an unfair advantage when it comes to selling ancillaries.
One of the key problems identified is that agencies need to be educating individual agents on the flexibility that New Distribution Capability (known as NDC) can bring to the booking process.
“All NDC providers, including global distribution systems, airlines and mid- and back-office software firms, will need to educate their agency partners about their plans for NDC-enabled transactions and process,” says the report. “Many travel agencies, especially retail agencies are unfamiliar with NDC. In this vacuum of knowledge, many ideas, right, wrong and possibly even amusingly outlandish, may be circulating.”
NDC (New Distribution Capability) is a travel industry-supported programme (NDC Program) launched by IATA for the development and market adoption of a new, XML-based data transmission standard (NDC Standard).
The NDC Standard enhances the capability of communications between airlines and travel agents and is open to any third party, intermediary, IT provider or non-IATA member, to implement and use.
The NDC Standard enables the travel industry to transform the way air products are retailed to corporations, leisure and business travelers, by addressing the industry’s current distribution limitations including product differentiation and time to market, access to full and rich air content and transparent shopping experiences.
Agents who are actually educated on the ramifications of NDC on the travel selling process said easy access to all relevant fares and products, using a single screen for all products and a quicker transaction process are key benefits for agent efficiency.
But most agencies and airlines are still getting to grips with this new way of working and in the meantime, another challenge has arisen - Online Travel Agencies (OTAs) have been ramping up their efforts to cross sell and in 2015, they were hailed the trailblazers of online travel merchandising by GDS provider, Amadeus.
Just a few years back, ancillary sales by OTAs were negligible. Today, 15 out of every 100 air bookings by OTAs include an ancillary sale, and that figure rises to 30 or 40 for certain carriers, the company claims.
In addition, there are three times more OTAs with integrated airline ancillaries in 2015 compared to 2014.
This change is being driven by customer demand and the significant number of airlines that have made their ancillary content available in the GDS.
“Online travel agencies constantly need to improve their user experience to stay competitive. If I want to book a window seat or bring one extra bag, and an OTA does not give me that option, I can find another travel vendor in just a few clicks,” says Amadeus.
“OTAs have also recognised that merchandising is simply good business.”
Merchandising also appeals to today’s trend towards personalisation – travellers expect to be given options so that they can hand-pick every aspect of their journey to suit their own individual needs.
The onset of rapidly-evolving distribution methods and the aggressive online merchandising efforts of OTAs and airlines alike is no doubt daunting for some.
However, agents that demonstrate strong product knowledge and selling skills, supported by technology that dynamically packages complex, ancillary-crammed itineraries, need not worry.
Traveltek solutions empower agents to search and book a range of ancillaries such as car hire, transfers, insurance, airport parking, attraction tickets, resort services, lounge passes and more, with multiple supplier options available for each.
These can be booked individually or as part of a package, helping agencies to add value and boost revenue.
Our smart technology is also intuitive and anticipates your customer’s ancillary needs.
For example, if you're using our cruise dynamic packaging system and your customer has selected a cruise, flight, hotel and an ancillary, our solution will automatically work out what transfers are required for each stage of the trip. It will calculate routes between airports, resorts and ports and present multiple transport options, from private taxi to shuttle bus.
Our portfolio of products, including our ancillary services, also integrate and communicate with one another.
All bookings are managed in our iBOS back office system and you can save ancillary quotes and send them to customers leveraging our CRM solution.
Travel firms can even manage their own transfer stock and include it in their search with our iTour Transfer product.
What’s more, ancillary searches can be applied to customer or trade websites and to our API, so you can ensure you remain top of the game when customer are seeking those added extras.
Agents who demonstrate strong cross-selling skills and replicate this online, giving clients choice and the ability to personalise their trip, will boost customer retention and profit.
Partner with Traveltek and your ancillary sales will rocket.