Monday, February 23, 2015
Marketing Mischief: Travelport 2014 Results - $3.5 billion left on the table
First, Gordon Wilson shared that their "attachment rate" of a hotel to an air ticket is up to 43 hotel segments out of 100 air tickets sold. While on the face, this sounds really wonderful, the focus on selling hotels to an air traveler is actually the core problem of the travel industry and a major opportunity for the GDS companies.
In the US alone, out of the 1 billion trips taken that involved an overnight, 87% of those were by car and NOT by air. Therefore, if you are measuring your attachment rate to air, then 43 out of 100 is a miserable number.
In the US, there are 130m trips by air, so 43% of those are just 55.9m trips.
That leaves the hotel bookings for 870m trips on the table. At Travelport's average segment revenue of $4.10, by my calculations, that is $3.5 billion left on the table.
The continued focus on the air traveler will eventually be the death of the GDS, as someone else will snatch up their dominant market position, gained by this air focus over the last 30+ years.
Second, I noted that without the sale of Orbitz Worldwide in 2014, Travelport would have lost $265m.
That is a sad state affairs for a mature business, but it is a result of focusing on a stagnant sector of the business (the air traveler) and ignoring the part of the market that is completely underserved. Marketing mischief at its finest.
In reference to " Richard Anderson, Delta Air Lines (5Q Interview) " As a follow on to my earlier article last week about doing...
I am now going to shift gears away from online technology and the role that they play in the travel distribution ecosystem to a topic that I...
You fully understand that rung #1 of the ladder is spamming and you've gotten past rung #2, noise. You get it -- that in order to reall...
UPDATED - March 12, 2014 Well, in the world of travel distribution on the OTA side of the equation, if Travelocity was the "come...
Part 2 of a 2 Part Series on Individual Relationship Management (IRM) versus Customer Relationship Management (CRM) which is flawed B...
This week, Bloomberg announced that Sabre raised $627 million in its IPO. Actually I don't think you should be allowed to call ...
If you are familiar with the game of dominos, there are dots on each domino and the placement of a domino on each turn requires that you mat...
Wow, in as many weeks, I have said goodbye to two amazing men in the travel industry. Yesterday afternoon I learned of the untimely deat...
Although the customer is now decidedly multi-channel, the components of the travel cycle have not really changed over the years. ...