Amadeus tells suppliers to think laterally as ancillary market booms
Sunday, 18 Jan, 2011
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Travel technology supplier Amadeus has issued a warning to travel suppliers to partner with more third party ancillary services or lose out on millions of pounds a year.
The company, which has just published a report on the issue, says there is a great deal of untapped revenue potential in these services and that travel suppliers would see a 30% growth in revenues from them by 2015.
Placed in context, the travel industry is estimated to grow by 3% over the next four years. The report, called Cross Sell Your Way To Profit, adds that third party revenue is set to represent 2.5% of total provider income by 2015. This represents $25 million for a $1 billion travel supplier.
In the study carried out for the report, 67% of respondents were from travel brands that generate annual revenues over $1 million. Industry experts from the hotel, airline, rail and cruise sectors were also interviewed qualitatively.
The report identifies the rise and rise of new “extreme” services such as virtual reality tours and digital concierges which it believes will “transform the customer experience” over the next decade, given they are used across all media channels.
While car rental, hotel rooms and insurance will remain stalwarts of the third-party world, the travel suppliers questioned saw massive growth in new extreme services.
By 2020, some 54% of suppliers expect to offer virtual reality services that guide people around airports, hotels and cruise ships before they set off on their holidays. And 80% will use digital concierges to enhance a hotel or airport experience once the customer is there. A further 37% say they will offer in-journey spa treatments.
The study also showed that the selling of new ancillary services was dependent on suppliers properly utilising the mobile phone as a selling channel.
Suppliers acknowledged that, right now, mobiles fall behind airline ticket offices and hotel front desks in term of selling .But they anticipate a turnaround in this over the next five years, thanks to the emergence of smartphones, when mobiles will come a close second to websites as a selling channel.
Director at Amadeus Travel Services Business Group Marcos Isaac said: “Today the industry is focused on the opportunity à la carte ancillary services offer, but this study spotlights the growing and significant contribution of third-party sales.
"Travellers are set to benefit from a host of innovative services in the future, often delivered by companies outside the travel industry. Travel brands of all types need to understand who to form partnerships with, what the revenue potential is and how best to sell third-party services if they are to maximize this opportunity.”
by Dinah Hatch
Dinah
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