Airline Channel Management

A lot has been written (including in this Blog) on the fragmentation of inventory and the emergence of alternate distribution platforms. One underlying theme that has not been discussed is the need for airlines to execute effective channel management strategies. There are a number of software solutions that allow hotels to manage different buckets of inventory through different channels, why doesn't this apply to airlines? The primary problem lies in the nature of the legacy airline reservation systems (CRS not GDS). It is difficult to deliver unique pricing to a particular channel if the infrastructure platform (e.g. the ability to store unique fares) is not in place. It is my belief that 2006 will see increased efforts by airlines to more effectively execute a multi-faceted channel pricing strategy, primarily designed to drive more business through specific channels. If the airlines can every combine dynamic pricing with customer value, the market will permanently change allowing the best customers to receive preferential pricing. This represents the ultimate in channel and customer relationship marketing.

Adventure Travel

Back in October I had the pleasure of speaking at the first Adventure Travel World Summit in Seattle. This was a super event that brought together for the first time a variety of outdoor and multi-cultural providers. The content was top notch and the attendees represented the leaders in this segment. A recent study by Cendant stated that " (the next generation of consumers) will challenge traditional vacations as they seek, on average, up to four very different experiences a year. A passion for 'doing' rather than 'having' will double the number of consumers flying by 2020. " This passion for doing reflects both adventure type of travel as well as multi-cultural trips. We all need to keep our eye on this segment.

Sub Market Online Travel Growth

2006 promises to see a significant growth for online travel sites that are targeted to specific sub-markets. Based on some current projects it is clear to me that online travel growth will come in terms of vertical market specific sites. These sites will either focus on specific market segments such as large ethnic markets or types of travel such as long haul travel to emerging markets. Sites like this have been in existence for some time. The interesting spin on these types of new companies is their ability to implement next generation platforms as their foundation infrastructure. These new platforms will capture inventory from a variety of sources (multiple GDS, Web search tools, direct connects) and combine it with unique content to deliver niche solutions for specific types of travel. As these sites emerge in 2006 and become more prominent, the traditional OTAs (Expedia, Travelocity, Orbitz) will likely try to create segmented versions of their products for specific markets in order to tap this sub-market approach. More specifics on this subject in 2006.