 |
As airlines begin to redevelop and unbundle their passenger offerings, extensions into each destination they fly is becoming more and more lucrative. Airline websites are developing an array of services to their passengers at the time of booking; joint offerings with hotel and tour groups are finding their place in airline-controlled initiatives; and while the focus on capitalizing on destination revenues is increasing, it is only inside the aircraft cabin where the airlines have the ability to influence thinking, take advantage of impulse purchasing and have the complete attention of their passengers that will ultimately determine the success of this business model.
This is not the first travel-related industry that has successfully launched this type of business focus. The cruise industry has spent close to two decades capitalizing on destination retailing programs and other port offerings. Cruise lines recognize that full service, high quality offerings both while their passengers are onboard as well as while they are in their destination brings increased loyalty as well as added revenues with little to no effort on the part of the cruise line. Shore Excursion offerings, while an integral part of the cruise experience, are not the easiest source of added profits. Coordination with tour operators, staff training on new destinations and passenger complaints from Sydney through Santiago and on to Santorini takes an incredible amount of manpower. It is the retail offerings and promotions in the port that have allowed the industry to generate over US$1 billion a year in revenues and gain a lofty profit share with very little effort and no direct customer service burden. And with the cruise industry only serving an estimated 34 million passengers per year compared to 6 billion being served in the air the potential is staggering.
Cruise lines have successfully incorporated third party branding firms for an increase in destination experience and added revenues. These promotion companies contract services to luxury brand partners and diversified retailers throughout the world to create Recommended and Guaranteed Shopping Programs to steer passengers to quality retailers and are in turn able to offer their passengers added savings and other incentives at many of the stores. The promotion companies take care of the coordination, contract signings, onboard marketing staff and all customer service issues for each cruise line. In return, the cruise line cashes in on large profit generation and an increased service offering for its passengers.
Airlines need to begin directing their attention to each destination they serve and see just how gainful destination offerings can be. They can effortlessly generate increased services to each passenger while taking advantage of profit sharing with major product and service operators. Coordination can be daunting however, which is why airline operators from across the globe will soon deploy extensive destination product and service offerings through GuestLogix’ OnTouch™ retail and merchandising division without any added liabilities. With the GuestLogix Mobile Virtual Store™ retail technology platform already deployed on 90% of North American airlines and 30% around the globe, this is one shift in the industry that is sure to be met with positive reaction from every angle.
 Print Article
|
|
|
|
