Flexibility in Payments: How Travel Companies Can Bring Back Early Bookings
It’s no secret that travel and holiday companies want every customer to book their holidays as early as possible. Filling flights and hotels is the goal of every single one of these companies, and the earlier they can do this, the better – which is why it’s often cheaper to book a holiday 9 months in advance rather than 2, as travel companies look to incentivise customers into booking early.
This works to benefit the customer in two very simple, yet greatly appreciated ways: firstly, a cheaper holiday saves money first and foremost, but secondly, they also have much longer to save for the holiday itself – whether that’s for the overall package, spending money, excursions, or all three. However, it also means that consumers are tied to these bookings, and they are increasingly reluctant to lock themselves in – after all, a lot can happen in 9 months!
The tried and tested method of booking early has always been a popular option, but in the technologically advanced world that we currently find ourselves in, we can now see live updates of prices and availability in an instant. As a result, fewer customers are now booking well in advance – in fact, 22% of 25-34-year-olds choosing and booking their holidays within just three weeks of the departure date – knowing that last minute getaways can be worth the wait when it comes to both cost and options.
Getting with the Times
Customers increasingly don’t want to be locked-in to one booking for months on end when they know that important aspects such as flights and accommodation are constantly changing. They are confident that better options for their holiday will come available over time, and they’re happy to wait. Most of us lock down our precious annual leave at work as early as we can, but only a shrinking few want to do the same for their holiday options.
Equally, there is a strong trend within the travel industry at the moment towards an
increasing level of ancillaries, and giving consumers helpful choices and options not only for a better experience, but for cost savings too. Whether it regards baggage, in-flight meals, sea-views, upgrade cars, destination tours or even meal options, travel companies want to offer as much as they can to the customer. But while some of these can be added on at any time after booking the holiday, others can’t, and the current payment structure across the industry is far too rigid for what is best for holidaymakers.
Flexibility in Options
With this growing reluctance from consumers to book their holidays earlier, it’s down to travel companies to figure out how to get their customers committing well in advance once again, but for that to happen there has to be an overhaul of the current model of bookings and payments.
For consumers, it is natural to select a few optional extras when they first books their
holidays – baggage allowance or transfers for example. However, there are also many options that the same customers are more inclined to choose at a later date when they begin to plan around the booking, or even in-resort.
It’s paramount that if the travel industry wants to get customers booking early, it needs to start offering more flexibility on options and payment models; including the ability to change them post-booking. The answer is through a managed account model.
Managed Account Model
This, of course, sounds complex, and a managed account model requires a greater level of technological support in order to facilitate customer changes and calculate the commercial impact (and cost). However, the technology is already available – it just needs travel companies to think beyond what they already know.
With a personal account rather than a one-off series of bookings, customers would be able to chop and change their options – be that booking different flights or better rooms, booking excursions, or cancelling different items. It’s all compiled into one total account cost, which can be paid gradually or all at once – whichever is most convenient for the customer.
These are all things that consumers will respond to very positively. Not only do they receive the long term comfort of having their holiday booked months in advance (and the time to save for it), they can also rest easy knowing that if a more convenient flight comes available, they have the freedom to swap it with their current choice.
A managed account model offers the convenience, cost saving and flexibility that customers crave, all while locking in bookings as early as possible for travel companies.
With this restructured approach, there isn’t just a significant increase in customers booking early, but it also adds real value to customer loyalty schemes, for both the customer and the travel company. All consumers know that flights and room availability are constantly changing over time; offering an account where a customer can change such things to their personal benefit gives an incredible customer experience. Moreover, for the travel company, it means that they can get early bookings from customers, while also increasing real