I’ve been conducting research recently to find out what the holiday experience is like from the customer’s point of view. One area that we’ve been focusing on is holiday add-ons (also called ancillaries) like travel insurance, transfers from the airport or extra leg-room on the plane.
It’s no secret in the travel industry that these ancillaries are high margin products – much higher than selling a seat on a plane or a bed in a hotel. So it’s not surprising that in recent years we’ve seen companies aggressively pushing these products into the online sales journey, when the customer is choosing and buying their flight, hotel or package holiday.
But our research suggests that there might be more effective ways of making these ancillary sales.
Booking a holiday is stressful. Customers might be more receptive to ancillaries after the initial sale:
Digital channels are supposed to offer a quick, convenient and uncomplicated way of purchasing holiday experiences. But many customers describe feeling overwhelmed with choice, making the experience of booking travel online difficult and stressful. Aggressively selling ancillaries during the booking process introduces additional effort – more options to look at, more information to interpret, more choices to make – which makes buying that dream holiday feel even harder and less enjoyable.
Sometimes it seems like travel providers have forgotten that few customers actually book on the day of travel. In most cases, there are weeks or months in between the initial sale and when the customer actually goes on their holiday.
This is a happy time. Travellers can enjoy the sense of anticipation and they start to ‘lean-in’ and think about their trip in more detail in the time immediately before travel. It’s easier to sell products to happy, engaged people, so while we see so many providers putting effort into selling add-ons during the initial booking, it’s strange that so few attempt this sale again during the pre-travel period. Yet our research suggests that customers might be more receptive to ancillaries at this time. Providers need to start experimenting with ways of selling add-ons to customers during this golden time in between buying and travelling.
Customers don’t want to commit to activities and excursions before they travel, they are more receptive on the ground:
Particularly in the context of package holidays, excursions and activities are a hard sell before the time of travel. Center Parcs do well at this but our respondents told us this was because visits are short, parks are busy, and they need to plan in order to get the most out of their short stay. For a two week stay in a resort town, how can we replicate that feeling of urgency to do more and commit to plans?
Travellers want flexibility to decide which excursions and activities to take part in, maybe deciding over dinner the night before, not months in advance. Rather than trying to get package customers to commit to excursions before they leave the UK, providers should get them to express their interests then focus instead on making it really easy to commit to those when they are on holiday. They could also think about offering flexibility so that if the traveller wakes up and doesn’t want to do the excursion on a particular day, they can delay and pick another day to do the trip.
Are we offering the right add-ons?
It was fascinating to hear the huge array of digital devices, like smartphones, iPads and laptops, that travellers take with them on their holidays. But they said that they didn’t use them with the same amount of freedom as they would do at home because they are concerned about data roaming costs. This suggests there might a new ancillary that travel providers could offer customers: a cheap and easy way of getting data and low cost calls while on holiday. A start-up called Handy offers a rentable phablet for travellers to Hong Kong and Singapore. Perhaps another answer to the add-ons sales problem is to start offering some fresh products and services like this which will really improve the quality of the holiday.
In summary, the travel industry may need to shift its focus away from trying to getting customers to commit to ancillaries during the initial sale, and explore ways of supporting customers throughout the lifecycle of booking, anticipating and travelling on their holiday. Travel companies should perhaps also take a hard look at ancillaries themselves and ask whether it isn’t time to innovate and create better value for their customers.