VANCOUVER, British Columbia – Hip Digital Media and Airline Information today released the results of the 2008 Ancillary Revenue survey. The survey focused on identifying current trends and the most effective methods for generating airline ancillary revenues. This unique survey was launched in conjunction with the 2008 Ancillary Revenue Airline Conference, which took place in Budapest Hungary in November of 2008.
Hip Digital and Airline Information distributed a custom-branded, promotional e-mail to over 12,000 travel industry professionals, including airlines, consultants, and industry suppliers, inviting them to partake in the survey. In addition, Hip Digital also designed a custom-branded website for the Airline Information survey allowing visitors to participate in the incentive program.
“The Airline Information survey displayed strategic initiatives that airlines are starting to take in order to attract and retain larger market share via new ancillary revenue initiatives,” said Peter Diemer, executive VP of strategy and development at Hip Digital Media. “By developing unique offerings, such as music premiums and incentives, the airline industry can now personalize the total consumer experience,”
Key findings of the Ancillary Revenue survey revealed:
– 87 percent of survey participants feel that selling other products and services primarily through online channels, is a trend that will sustain its positioning among airlines
– 56 percent of participants feel the best way for airlines to effectively battle rising costs of travel is to charge fees for amenities that were once included in the price of a ticket
– 76 percent felt ticket unbundling or a-la-carte pricing is a trend that will sustain among airline carriers
When asked what is the most financially lucrative product that airlines can sell/market besides airfare, respondents answered as follows:
– 38 percent chose travel insurance as the most financially lucrative
– 23 percent chose hotel stays as the second choice
– 17 percent chose vacation packages as the third choice
– 12 percent chose tourist activities as the fourth choice
– 6 percent chose car rental as the least financially lucrative choice
When asked to rate specific methods in which airlines sell ancillary products and services online, in-path sales conducted during the ticket booking process was rated as 45 percent effective; ancillary sales immediately after check out by showcasing products on confirmation pages, and emails was rated as 53 percent effective, while sales channels exploited days after booking embedded in schedule reminder or other types of post-booking emails was rated as the highest conversion in the opinion of all surveyed at 61 percent effectiveness.
“We can finally put to rest the popular sentiment that airline ancillary revenue is all about fees. There is an overwhelming desire among hundreds of airlines surveyed to offer customers a diverse and relevant shopping experience that goes well beyond selling air transport alone,” said Roger Williams, co-founder and managing partner of Airline Information.