The new battleground in travel retail

TD Editor

As international travel gradually opens up, many holiday-starved travellers will start eagerly planning their first trip in many months, if not years. And many holiday-starved travellers will get to the end of the booking process, only to discover the deal they thought they were getting has vanished. In its place – a long list of hidden costs.

It could be the airfare which slaps you with additional fees to carry a bag onboard. Or perhaps the processing fee to use any credit card other than the airline’s co-branded one. It might be that club access isn’t actually included in the too-good-to-be-true rate for your club room. Every traveller has almost certainly experienced some hidden cost or another when presented with their final bills.

Chua Hui Wan, Head of Agency Sales for Asia Pacific, Travelport

While it will hardly come as a shock to learn people loathe these clandestine charges, what is perhaps surprising is just how much travellers hate them. So much so, in fact, winning over consumers’ trust now hinges more on price transparency than even long-term safety records. You read that right: Right now, travellers care about price transparency more than safety.

This is what we discovered when we surveyed 11,000 travellers around the world (almost half of them in Asia) to find out what they trust about the travel industry, and—importantly—what they don’t. The research results were overwhelming: Consumers are tired of having their pockets shaken down or feeling like they’ve been baited-and-switched.

Nowhere were trust issues more apparent in our research than in New Zealand and Australia, where the study revealed a huge chasm between expectation and performance. Price transparency and fully flexible or refundable tickets were ranked as the top two most influential factors over whether to trust a travel firm. However, the same travellers rated industry performance in these areas 40% lower than the score they gave our industry for the things we need to do to win their trust.

Pricing transparency may soon replace Covid health and safety measures as the next big battleground for retailers as travel resumes.

75% of those surveyed globally also told us they felt their trust had been broken more than once by a travel business. The takeaway is clear: Our industry cannot view pent-up demand as a guarantee of bums-on-seats. Pricing transparency may soon replace Covid health and safety measures as the next big battleground for retailers as travel resumes. The appearance of affordability is misleading, and the illusion is starting to wear thin.

Part of the ongoing issue with hidden fees is everyone is doing it, leaving retailers who maintain complete transparency at a distinct disadvantage. Higher prices up front mean appearing further down in search results, which means lower chances for conversion (even if the overall cost is lower than those less-transparent results that rank high in the search). And, given how impactful we know search rankings are on revenue, broken trust tends to be written off as an unfortunate, but unavoidable cost of doing business.

However, the data proves it is not.

Restoring trust is often far simpler than people think. It starts with better merchandising and retailing. It doesn’t mean discontinuing basic fares, but they must be accompanied by restriction disclosures, so travellers can manage expectations about what is and isn’t included. Make it clear a rate is non-refundable, seat selection is extra or no bags are included. And above all, get the right product to the right customer.

Four out of five times the product the customer needs is not the cheapest. This means travel businesses must master the upsell effectively and cross-sell relevant extras at the right time (without breaking trust).

Technology must be upgraded for the industry to be able to do this. Progress must be genuine and consumer-centric. Upselling and cross-selling must demonstrate immediate, relevant value—not only to the seller, but also to the buyer. And those wondering if they can simply build a more sophisticated form of trickery should think again.

Trust is earned, and companies that continue to squeeze consumers’ wallets via hidden costs are playing the short game. These companies will eventually struggle to engage those seeking a value exchange that better reflects the realities of a post-pandemic world.

Travellers are itching to get away. We in the industry need to do our best to remind them of the magic of travel, not the annoyances.

Chua Hui Wan is Travelport’s Head of Agency Sales for Asia Pacific.

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