I was delighted to read the findings of the Amadeus-Forrester report: "Ancillary revenue vital to travel retailers" as reported by Kevin May on Tnooz.
The report suggests that ancillary sales will grow by 30% over the next 5 years, against a wider industry growth rate of just 3% - so, ancillaries represent an "untapped opportunity".
However, Director of the travel services business group at Amadeus, Marcos Isaac, says that to realise these new revenue streams, sellers will need to use tools and technologies that reach customers beyond the initial point of sale, and up-selling via mobile phones, before and during the trip will become increasingly important.
This topic has been a common theme of this blog for the past 3 years (e.g. here, here, here, here, and here), I've been harping on about using mobile to extend the ancillary sales window, and sharing examples of successes we achieved promoting travel ancillaries via mobile, for as long as I can remember, although it's often felt like I was banging my head against a brick wall.
So, I applaud the Amadeus-Forrester research, and for those travel companies seeking success with mobile, I'd recommend bearing these points in mind:
- Retain control of the mobile customer relationship
- Lead with service, follow with revenue
Retain control of the mobile customer relationship
Airlines, travel agents, and tour operators have a huge advantage when it comes to providing a mobile experience for travellers. I wrote that back in 2008, and it remains true today. Visibility of the customer's itinerary is key to delivering a meaningful mobile experience. Any targeted content you want to deliver by mobile, be it flight status updates, travel guides, weather forecasts, road traffic conditions, whatever - it all relies on knowledge of the itinerary.
Use this knowledge of the itinerary well, and you'll create a mobile dialogue that is relevant, and that your customers will keep coming back to - creating the new mobile touch points that you need.
Yes, the itinerary is precious, potentially invaluable, information and you should treat is as such.
So, why do some travel companies give this data away, effectively disintermediating themselves from engaging in a mobile dialogue with the traveller (e.g. think BCD Travel or Virgin America giving their itinerary data to TripIt)? This seems so short-sighted and, to me, demonstrates a lack of understanding of the power of the mobile channel within the travel industry.
So, I encourage you to recognise the value of the itinerary and use this as the basis of your mobile interactions.
Lead with service, follow with revenue
Solely using the mobile channel to send out offers for upgrades and additional products just doesn't cut it, your customers will soon lose interest.
The best mobile strategy is to provide customers with a service that they value, a service that keeps them coming back time and again ... and then interweave ancillary promotions into each of these interactions. And, the best promotions are done subtly, its more about helping the customer (e.g. let them browse and learn about a small number of relevant tours for their destination, let them add the tours to their itinerary, and then give them the option to book via call center).
We've just implemented something similar for airport parking in the UK with our partner Airport Parking and Hotels (APH). We use the itinerary knowledge (departure date, departure airport, return date) to show available airport parking options for the customer's trip and then allow them to book. We display the offer from the time they add their trip with us until the day before departure (because, on departure day, there are more relevant promotions to use). We're running the parking promotion within Vodafone Travel and our own StreamThru application for trips from UK airports, and early signs have been very encouraging.

Over the past few years running mobile travel services, we've seen time and again that travellers want access to and value relevant content, they don't want to waste time searching for this content, nor do they want to download lots and lots of apps to get at this content. So, I believe if you do a good job providing a mobile experience that delivers value to your customers, you will create the new ancillary revenue touch-points that enable you to realise Amadeus-Forrester's "untapped opportunity".