How much are travellers willing to pay for airline ancillary services such as seats, bags and food when travelling? New research shows that it’s a lot more than many in the industry think.
The answer is USD 100, currently worth AUD 130, although the amount does vary widely by region. Africans, for instance, are willing to spend twice as much on airline extras than travellers from Asia Pacific.
Research by global travel technology company, Sabre Corporation has found that travellers would drop a US hundred dollar bill to make their travel a little more “about me”.
Sabre surveyed travellers from 20 countries about what they would spend and why. The results show that 80% of travellers purchased air extras on their last trip, spending an average of USD 62. When asked if they would spend more to personalise their trip, the answer was “yes” – up to USD 99 if it improved their travel experience.
The research was announced at the IATA World Passenger Symposium in Dubai, as part of a Sabre-hosted industry roundtable on how airlines and hotels can deliver more tailored offers and services to customers.
The survey also found differences between what people from different regions would spend on extras, with Africans willing to spend the most and Asia Pacific travellers the least.
When asked what they would be most likely to spend money on, the most desired ancillaries were cabin class upgrades, on-board food and beverage and preferred seating and extra leg room – all at 11%.
This was followed by inflight Wi-Fi (9%) and extra checked baggage (9%). The popularity of each ancillary varied between travellers from each region, with North Americans and Europeans choosing preferred seating and extra leg room; Latin Americans opting for on-board Wi-Fi, and Asia Pacific travellers selecting extra checked luggage. For travellers from Africa and the Middle East, on-board food and beverage, and fast track security respectively topped their pick.
“It’s clear that while there are regional differences in ancillary preferences, 80% of all travellers spend on air extras, representing a significant revenue opportunity for airlines,” said Dino Gelmetti, vice president EMEA, Airline Solutions, Sabre.
“Airlines know what their travellers want based on the data they have of past purchases. Yet so much of this data remains unused today. However, by leveraging the latest technology, airlines can unlock this data and show they know their travellers by offering the right products at the right time and tailoring a personalised experience that will improve customer loyalty and generate much needed revenue.”
While technology is preferred by most travellers to plan and book travel, human interaction still plays a significant role in some countries. In Latin America, almost half (48%) prefer the help of a consultant to plan and book travel, compared to around a third of travellers from other regions – 37% in the Middle East, 36% in Asia, 35% in Africa and North America, and 33% in Europe.
The study also revealed differences in the time it takes travellers around the world to book trips. African travellers were the fastest planners, with 33% saying they spent less than a day planning their last trip, compared to just 12% of travellers from Asia Pacific. At the other end of the scale, American travellers were the most likely to plan in advance with 9% taking longer than a month, compared to just 3% of travellers from Africa and the Middle East.
“Both airlines and travel agencies have a role to play in providing travellers with a complete booking service that combines the convenience of technology with the power of human interaction,” said Shelly Terry, vice president, product marketing, Travel Network, Sabre.
“Airlines can maximise revenue by leveraging the expertise of travel agencies and ensuring their inventories are conveniently available to passengers through both direct and indirect channels, giving people the choice and freedom to book travel the way it suits them.”
The full report can be read and downloaded as a PDF file here.
Edited by Peter Needham