Are Airlines Getting it Wrong?

Posted by Nicolas Visiers on September 15, 2016

Yieldr recently published a flight booking study which I found extremely interesting for several reasons (http://bit.ly/2b1ltGg). According to their study, the majority of flight bookings occur from 0-10 days ahead of the travel date. But, despite this, airlines are not fully capitalizing on these last-minute bookings, and this is partly why Yieldr predicts that there will have been 920 million empty seats on airlines in 2016. It’s not hard to imagine what 920 million empty seats means for lost revenue.

So, I wonder, in an economy where we are trying to optimize the use of our homes when we are away or our cars when we don't use them, why aren’t other travel/hospitality sectors – like airlines – developing better direct-to-consumer strategies that can deliver higher occupancy rates?

Companies like lastminute.com or hoteltonight.com thrive on the use of excess inventory to make offers at a lower-than-average cost. I have personally received offers from hotels offering heavily discounted weekend rates, not for when I want to travel, but when they want to fill up the hotel (I admit, I’m always tempted by the Le Parker Meridien in NYC, the home of the Burger Joint… Who doesn’t love that hotel?).

Here’ my point: having a better understanding of your users’ booking behavior can help you modify your marketing strategy and think of ways to fill those empty rooms, empty seats, empty cabins, etc...

Personalization and testing can also give us a better understanding of booking behavior that will further shift the priorities of travel & hospitality companies. For example, specific matching tactics could be a great way to find value and optimize market share -- like finding a way to match the traveler to a specific seat rather than a flight, or connecting the traveler with a specific room that’s available rather than directing them to the hotel.

The bottom line is… revenue is directly tied to insights. The more insights into user behavior a company has, the more likely they are to use those insights to create revenue through things like testing, personalization, optimization, creative thinking, and problem solving. Similarly, the less responsive an industry is to data insights and user behavior… well, that’s when you get 920 million empty seats.

Topics: Test and Optimization

Written by Nicolas Visiers