A new study examines the customer's selection criteria between agency and travel-supplier Web sites.
Posted Nov 19, 2004
Airlines and hotel operators have room to grow, according to the findings of a new Keynote Systems study, as they try to own the direct relationship with the customer. The study examined the habits of 1,500 business travelers with little to no corporate management to govern the booking travel, and who, as a result, have the greatest flexibility when planning excursions.
The study concludes that experienced travelers tend to gravitate to supplier Web sites and call centers as they became regular customers, because they have already chosen a regular flight-route selection and are looking for loyalty amenities. Today, roughly one in seven business travelers conducted their search and purchases directly with the airline and hotel supplier sites. Skewing this result, however, is the fact that named at the top of the list for preferred airline Web sites were JetBlue and Southwest, low-fare carriers that work on a direct-to-traveler model and are offered through few, if any, agencies.
The remainder of carrier loyalty came from frequent travelers who rated the experience and their loyalty rewards more important than pricing in their travel search. By comparison nearly half of the study participants relied on agencies alone, meaning there is still a great deal of work to be done for carriers to convince customers that the carriers can provide all the necessary information to make the right decision. According to Bonny Brown, Keynote director of research and public services, the agencies have an even larger advantage in the leisure travel space, where scheduling can be more flexible in search of a better deal, even though suppliers are trying to stake their own claim to price leadership. "A lot of the suppliers have a real edge there [with] a low-price guarantee," Brown says.
Curiously, a perception of better pricing also factored heavily into traveler decisions to choose between online travel agencies like Expedia (the leading business traveler choice), Orbitz, and Travelocity, even though in most cases the agencies all draw from the same product and pricing pools set by the airlines. Eighty-five percent of participants rate price a "leading consideration" compared to 48 percent who said a primary interest was participation in loyalty programs. In effect, despite the fact that agencies can control little but the user experience, they are being held to high standards of performance set at the supplier level.
Most important to the industry is the news that with so many choices in reservation browsing and booking, there is still no one way that business travelers prefer to buy business travel. More than one third of the study participants used both agency and supplier sites in booking travel. A significant portion of buyers also still work through multiple channels. "We found that there is a tendency to plan online and then pick up the phone, as well," particularly in hotel booking, Brown says.
As services like high-speed Internet and expanded workspaces have become additional differentiators in the hotel space, agencies (and to a lesser extent the supplier sites themselves) have struggled to keep up with all the important information--although the hotel operators have an advantage. Brown says: "Business travelers are developing a lot of [new] preferences about what will make them happy in a hotel room. There tends to be more information available on the supplier site, including information about upgraded room availability."
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