Airline guy Tom Bacon recently attended EyeforTravel’s North American show and learned some valuable lessons from a hotelier with the right ancillary mindset

The hotel estate is infinite! What Kristie Goshow, Chief Marketing Officer of Preferred Hotels, means by this, is that we all need to unlearn the standard notions of hotel products and reconstruct amenities and services around diverse and changing customer needs.

Goshow, a keynote speaker at EyeforTravel North America last month, opened the conference with a plea for brands to rethink the travel experience. As an example, Goshow indicated that even the corner chair, a standard feature in every hotel room, should beware! This chair is rarely used – it is a convenient place to put your luggage or drape your coat but mostly it just collects dust. After all, few travellers would elect to pay extra for a chair they are unlikely to use!

Goshow also cited airlines as a model for new ancillary revenue streams, including bags and seats. However, even airlines could benefit from Goshow’s radical perspective: after all, airlines, too, have an ‘infinite’ landscape and should look to find the equivalent of the corner chair in their travel experience.

Getting it right

With a new mindset, the airline or hotel ‘product’ can be ‘bares bones’ or ‘highest in luxury’ - or ‘perfect for families’ or ‘business oriented’ or whatever – all replacing the generic one-size-fits-all. This is the revolution of unbundling and rebundling around different travel segments, and forms the basis for the future personalisation of travel.

New options for travellers can, of course, be done poorly. For some, the choice can be overwhelming – driving abandonment and procrastination instead of engagement. For some travellers, more choice is perceived as ‘nickel-diming’ and intense marketing spiels can undermine integrity and are perceived as not delivering genuine value. The Holy Grail is choice that should present real value for target travellers.

Done well, providing a choice becomes a win-win for travel suppliers and travellers. Customers get the exact experience they want and only pay for those features they value. For example:

• Emirates’ new business class product distinguishes between Business/Sleep (few amenities besides a lie-flat seat); Business/Product (most luxury amenities); and Business/Full (the whole traditional business class experience).
• Airline seat maps. Customers choose the seat they prefer whether window or aisle, near the front or in the exit row. 
• Hotel maps of rooms. Guests choose not only top floor versus ground floor but the exact room they prefer: perhaps a king room overlooking the pool but far enough up to also get a broader view of the city.

With unbundling, suppliers have the opportunity to add back premium features to the ‘bare bones’ product bundles:

• Premium, brand packages. Goshow indicated that she would pay extra for a package of premium hairdryers and make-up mirrors in the bathroom – potentially offering customers a special experience not available at home. Another hotelier has talked of a piano in the room as an option. The estate is ‘infinite’ when it opens up possible product partnerships with premium brands that may offer value to different customer segments.
• Differential services. Housekeeping itself could become a revenue generator with customers paying different amounts based on the frequency of room cleaning and towel replacement. Unbundling includes rethinking all existing services and replacing with an entire service continuum. This is another dimension of the “infinite” estate. On the airline side, would some travelers choose to spend only an hour in the lounge? Or to visit the business center in the lounge rather than use the other lounge amenities? Would some passengers appreciate carry-on luggage storage at the gate while they shop or dine?
• Early check-in/late check out offered granularly, hour by hour. When precisely would you like to check in? Would you like to stay through the day rather than be out before noon? 
• New opportunities in loyalty. Kristie also observed that by unbundling, travel suppliers could then add back certain features as a benefit for their most loyal passengers. Many airlines rely heavily on new bag fees and then offer free checked bags for their loyalty members.

Goshow’s vision of unbundling pushes us all to rethink the customer experience and to recognise that each of our customers, in fact, value different features. And, unbundling isn’t just stripping away features but also includes adding unique features that may appeal to different customer segments. Rethinking the airline landscape and the hotel estate both should open up new opportunities for meeting customer needs – the possibilities become ‘infinite’.

Tom Bacon has been in the business for 25 years. When he isn’t penning his regular column for EyeforTravel, he is an industry consultant in revenue optimisation, and leads audit teams for airline commercial activities including revenue management, scheduling and fleet planning. Want to find out more? Email Tom or visit his website