Travel Matters - June 2016

14 / 20

...that the US Embassy on London’s Grosvenor Square will be
converted to a 5-star hotel when the Embassy moves out next year
and re-locates to the Nine Elms area of London.
DID YOU KNOW?
14 | TRAVEL TRENDS
IS THE PRICE RIGHT?
Paul Wait, Chief Executive of the GTMC, debates the challenges
of multi-channel distribution and why price parity is the only way
forward to build trust in the marketplace
For anyone managing a travel policy
and making buying and budget
decisions, the confusion over different
prices depending on the channel you
book through is something we could all
do without. The world doesn’t need a
price comparison site for TMCs, and as
much as I love a meerkat, I don’t need
them in my business life.
Of course, every business needs to
offer their products and services for
sale through multiple different channels.
Decades of customer research shows
that you cannot get all people, or all
businesses, to behave in the same way.
Therefore you have to be on sale – and
easily accessible – in all the places and
platforms that your customers are.
Multi-channel distribution causes
challenges for airlines, hotels and rail
operators. They need to be confident
that each channel will pull its weight,
and have room to grow. As a customer
you want to be reassured that the
channel you choose brings the value
you want – that might be flexibility,
reporting or efficiencies.
This unfortunately means that
sometimes businesses show favouritism
to one channel over another. When
this happens, you often see the
attractive offers and benefits loaded
into the direct booking channel. The
airline, hotelier or train operator tries
to push the customer to the channel
that is the simplest for them, regardless
of what might actually work best for
that particular customer. For example,
direct channels are often not fully
loaded in order to make the direct
channel look cheaper.
The GTMC’s disapproval of those who
prioritise direct is that it doesn’t reflect
the route that many valuable customers
want to book. While we are not anti-
direct selling, we are against different
pricing or product benefits for those
booking direct. This will not deliver long
term business success.
We want to see price and product
parity across all booking channels, and
allow customers to make a decision
as to which channel to use based on
perceived value. Unfortunately we
are seeing a situation where airlines
are beginning to charge a fee for the
customer booking via a GDS. They are
requesting a fee for a booking channel
that actually reduces their workload.
Creating a level playing field is better
for customers, and better for businesses.
It also empowers business travellers to
make decisions on what is best for their
own business, rather than what works
better for the travel provider. Plus, price
parity also builds greater trust among
buyers, the trade and consumers.
When I was GM Sales for Virgin
Atlantic we had a multi-channel
distribution channel that allowed just
this. Customers and agents in the
business and leisure sectors knew that
whichever channel they used, price and
seat availability would be the same.
This strategy builds trust with the
marketplace, one of the most important
elements of customer loyalty and
business growth. I am entirely convinced
that part of our revenue growth
success at Virgin Atlantic was due to
this channel policy. If you allow the
customer to decide how to do business
as opposed to trying to force them, then
your chances of success will increase.
Being fairer across the channels is
not just good for business, it also has
clear brand and reputation benefits.
By encouraging a TMC to sell on price,
then any airline, train operator or
accommodation provider has nothing to
differentiate with other than the cost.
A multi-channel distribution strategy
with price parity is essential. Ultimately
this allows you, the business traveller
or buyer, to choose how you want to
book business travel based on what
creates most value. Price certainly isn’t
everything, and a cuddly toy meerkat
doesn’t meet your business objectives.