October 2018, Las Vegas
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Purpose of trip: it’s time for airlines to get granular
From business to leisure or even bleisure, there are a huge variety of options available to travellers, and the opportunity for travel firms even bigger, writes Tom Bacon
Travel purpose is sometimes categorised at a fairly high level – is the trip for ‘business’ or ‘leisure’?
Such classification is, of course, useful: various fare attributes (advanced purchase, flexibility, price sensitivity) often vary with whether the trip is primarily business or leisure. However, as airlines offer more features (big seat, checked bags, lounge access, onboard meals, links to car/hotels, ground transportation, event tickets, etc), travel purpose needs to be defined in a much more granular way to best engage with the customer and to best meet his needs.
For example, ‘business’ needs can differ widely across more narrowly-defined business segments:
- Commuters (regular weekly trips) versus a one-day sales meetings versus three-day conferences
- Trips that extend into a weekend (for a combined ‘bleisure’ journey)
- Individual travellers versus multiple colleagues on one trip
But even the above examples may still be too broad a categorisation for meeting customer needs. Travellers to a three-day conference, for example, can be further broken down into smaller segments, useful for helping travel suppliers better customise their trip:
- Speakers – whose participation may be cut short by sudden business demands back at the office; their goal may be to make an impression and get out.
- Sponsors – small teams who may need to set up a booth beforehand and whose primary objective is to identify new customers.
- Organisers – larger teams with even greater pre-conference obligations; their objective is a seamless conference for all participants.
- Attendees – individuals or small groups who may value time out of the office and who are more likely to value destination-related activities and who may be open to extending their trip.
A business traveller who is a sponsor for a conference, for example, will plan long in advance (qualifying for a low fare) but will not be as price sensitive as most such travellers. She may need extra baggage and she may appreciate popular local ideas for entertaining customers. Also, she may be quite open to extending her stay to unwind afterwards or even flying in a spouse to relax together for a few days.
A closer look at leisure
Within the broad leisure category, similarly, there are stark differences in needs among travellers:
- Visiting friends and family
- Individual versus couples versus families (with children of varying ages)
- Destination-oriented (city vs beach vs mountain vs site-seeing vs special event)
Again, refining ‘purpose of travel’ is necessary to properly customise a trip given the much broader offerings of airline merchandisers. ‘Leisure’ may have historically been helpful for broad segmentation based primarily overall price sensitivity versus ‘business’ travel. But for more customised product definition, including both flight-related options like checked bags and reserved seats as well as non-flight-related options (hotel stays – location, room types, and amenities; travel activities; event tickets; ground transportation), ‘leisure’ is much too broad to be effective.
Airline marketing departments can do more to add value by developing better segmentation schemes. Indeed, what is becoming increasingly clear is that effective merchandising of the tremendous variety of options for travellers requires a much more granular ‘purpose of trip’.
Tom Bacon has been in the business 25 years, as an airline veteran and now industry consultant in revenue optimisation. He leads audit teams for airline commercial activities including revenue management, scheduling and fleet planning. Questions? Email Tom or visit his website