Why Ancillary Revenues Don’t Much Matter

Let’s cut to the nub of this issue.  No one will  ever know for sure if ancillary revenues make airlines more profitable.  There are just too many moving parts in an airline’s  revenue stream.  Sure, airlines may report an extra billion dollars in ancillary revenue (AR, from here on) – but what did fares do?

If fares went down, then maybe the extra AR revenue Continue reading

Google – the Ultimate Direct Connect Platform?

Let’s connect some dots.

Dot 1: Google is in a quandary. It needs to enter big markets with high growth opportunities.
Dot 2: Google likes the travel industry. I’ve heard estimates that about 10% of its revenues are attributable to travel.
Dot 3: There’s a big travel-related search market that Google hasn’t cracked. It sits behind the walls of the GDSs.
Dot 4: ITA Software has deep expertise in airline pricing, shopping and availability searches. ITA powers Continue reading

Reverse Auctions for Airfares, Hotel and Car Rates?

Here’s an interesting twist on the reverse auction strategy of getting suppliers to under-bid each other for the buyer’s business.  Instead of a buyer initiating the reverse auction, have the supplier do it.

It’s not a silly as it sounds.  In fact, it is being done successfully by Air New Zealand, according to this article in Tnooz.  Called GrabASeat, the business model is simple – list a limited number of seats on a route, decrease the price every so often, and let shoppers decide when they want to buy the seat.

It’s revenue management juiced up by the buyer’s fear of losing Continue reading

Most Popular Reads of 2009

This blog’s most popular posts involved innovation, fighting words, myths and data sources.  Not quite sure what this topical variety tells me about the direction I should take with this travel management blog in 2010, but stay tuned! (Sign up here for immediate delivery of new articles via e-mail)

The most-read posts in 2009: Continue reading

Social Scanning, Fuzzy Shopping and More Travel Innovations

**Update: The four finalists are noted below in bold purple text.**

The Phocuswright Travel Innovation Summit showcased 34 firms yesterday. Each has an interesting new angle on some aspect of the travel business. For me, the firms in the social scanning and fuzzy shopping categories were the most intriguing.  See this post for my take on the implications for travel procurement. Continue reading

What’s Next in Travel Innovation?

Today I watched 34 firms pitch their innovations at a major travel industry conference. Nearly all were aimed at the leisure travel segment, but keep reading…because innovations in the consumer market will shape the face of business travel. Continue reading

Top 5 Posts – Last 40 Days

Here are the five most popular posts on this blog from the last 40 days:

  1. Trippy – Tomorrow’s Biz Trip Planning Tool? (Trippy is a mash-up of Google Wave, Google Maps and Lonely Planet content)
  2. Travel 101 (a 4-minute video introduction to the travel category, and four posts covering Travel Data 101)
  3. Travel Procurement’s Fighting Words (started by a slam against using procurement principles in the travel category)
  4. Future Innovations in Airline Distribution – Condensed (a summary of problems and  innovations needed in the airline distribution channel)
  5. Why Travel Disses Procurement (explains the friction found between travel and procurement staffs and what to do about it)

I’m surprised that two of these posts don’t relate directly to travel procurement (“Trippy…” and “Future Innovations…”).  You’re saying it’s OK to cast a wider net in terms of topics.  Cool.  I’ll continue to bring in this type of content from time to time.  What else would you like to see here?

“Future Innovations in Airline Distribution” Condensed

Here are the highlights from my recent presentation at CASMA titled  “Future Innovations in Airline Distribution”.   The original deck has about 50 slides, but because it was designed for a live 60-minute speech, it’s hard to get the meaning of many of the slides (nearly all pictures) by themselves.  So here’s the 3-minute version:

Channels have limits.

Channels Have LimitsDistribution channels are essential to commerce, but they have limits.  The Panama Canal has to build wider locks to accommodate the newest and largest cargo ships.  This is a metaphor for the GDS distribution channel, as it cannot handle the “wider” content that airlines want to distribute today.

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The Future of Airline Distribution

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Update: Here’s a more current post that gives you the 3-minute condensed version of this presentation, including the most popular slides.

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Here’s what I presented today at the CASMA conference: Continue reading