Recently, like so many other passengers, I also traveled during the holidays. I flew coast to coast, to see friends and family. My trip included a premium seat I booked through a travel agency – one that did not have as much integrated content to offer last year, as they do now. This, and the long flight, gave me enough time to reflect on the year 2016 – the lessons, trends and expansion. And it surely has been a very exciting year, as we achieved a lot, together, thanks to your constant feedback, in terms of increasing content, new revenue strategies and lots of small to big feature updates. Here’s a dive into some key highlights from last year:
Content continues to grow
Amadeus continued to grow the merchandising content available seamlessly to our travel agencies. In North America, our agents can now book ancillary services on more than 43 airlines (22% content increase from 2015) and fare families for more than 31 airlines (55% increase from 2015). See a full list of carriers available here.
Ancillary adoption and revenue is on the rise
With more content at their fingertips and an intuitive booking flow, travel agents are booking more and delivering excellent customer service to their travelers. In 2016, Amadeus North America saw an increase of 238 percent in the attachment rate of ancillary services to airline bookings made by our agencies.
Increases in merchandising adoption, and ultimately revenue, is taking place industry wide. In a recent article published by IdeaWorksCompany, 2016’s global airline ancillary revenue is projected to be $67.4 billion, which is a 13.8 percent increase above 2015. Airlines are achieving this by offering a la carte and bundled offers across the direct and indirect channels.
Airlines aren’t the only ones who can use merchandising to increase revenues
More revenues from an increased sale of ancillary services are not reserved only for the airlines. Ancillary services provide travel agencies with the ability to offer the best, tailored package for their travelers. Amadeus has seen a growing trend where agencies are turning merchandising content into a revenue stream. Two agency revenue models seen are:
- Ancillary fee mark-up
Example: A $50 seat can be sold by an agency for $55 – a $5 mark-up on the airline ancillary fee, generating a revenue for the agency. An agency selling 10,000 ancillaries/year could generate up to $50,000 in additional revenue using this model.
Mark-ups can be a flat amount or a percentage based on the ancillary fee.
- Service fee
An age-old revenue method is now being extended by some agencies to ancillary products. Agencies may have a flat fee model, or a tiered service fee model.
Example: An agency may choose to charge a flat $10 service fee to process all ancillaries in a PNR (Ex. Bags, Seats) for their travelers; or may choose to charge $5 for each ancillary processed in a PNR.
Updates & enhancements
You asked, we listened, and implemented it. Thanks to your feedback, we have made some great improvements in our merchandising flow, to make your booking experience even better in the platforms that you already love:
- Standardization of Baggage Services means improved baggage booking experience, by easily identifying first and second chargeable baggage service in the Amadeus ancillary services catalog, in a uniform manner across all carriers.
- Ancillary upsell teaser at itinerary pricing gives agents more information, as the pricing output now identifies which ancillaries may be at a charge or not included in the fare.
- Rich Content such as images, enabled in the ancillary catalog and fare families upsells creates more desirable offers.
- Improved fare families booking flow means a more descriptive and informative upsell teaser and upsell panel.
Go explore these enhancements in Amadeus Selling Platform and Amadeus Platform Connect today!
A look into 2017
In 2017 we strive to bring you even more key merchandising content, along with great features and enhancements that make your booking experience even more pleasant, and allows you to offer that much more to your travelers.
To let out a tease, an exciting feature that we are eager to launch this year is the ability to compare multiple fare families at shopping – thanks to some of the agencies who helped us beta-test this new feature. Below is a screenshot of how the feature would work when launched later this year.
After a successful 2016, we are poised to achieve more in 2017 and continue shaping the future of merchandising together!