The travel industry businesses anticipate a change in ancillary
revenue strategies in 2012 according to a recent
Collinson Latitude survey. Non-travel related product sales and
maximizing channel revenue through cross-selling and up-selling
strategies will play a pivotal role in the future of ancillary
revenues.
Traditional travel products will of course remain very important
in any ancillary revenue program or strategy. The important fact is
that you need a plan on how to capitalize on your ancillary revenue
potential without losing sight of the importance of customer
loyalty and adding value. See previous
post.
The Travel industry, airlines in specific, is the sector which
has grown its ancillary business the most or at least at a rate
faster than any other industry. I focus on the Charter Airline and
Tour Operator part of the travel industry but when you mention
ancillary revenue management, Ryanair usually comes up as the
thought leader in this field. Important to understand is that
they focus on transporting passengers from one destination to
another and don't care too much about the experience and adding
value. They deliver value through cheap fares and delivering on
their promise to take passenger from A to B. When it comes to the
charter travel industry, focus needs to be, and rightfully is, on
the customers. Ancillary services should add value and choice!
Ryanair didn't introduce the ancillary revenue concept until
around 2000, if I am not mistaken? In the Nordic region we
have had ancillary sales much longer than that even if it wasn't
called that at the time. In 1991, Inflight Services started providing
services to the travel retail industry that led to sales and
revenues from other sources than their core business. The
non-travel related product was of course duty free sales and is
still a very powerful ancillary revenue program for the charter
travel industry in the Nordic region. The question is when
other European countries will see this potential?
An ancillary revenue business strategy is a must these days and
according to recent trends need to incorporate both travel and
non-travel products.