By Kevin Mitchell, Chairman, Business Travel Coalition
Orbitz recently announced results of a nationwide survey of travelers to celebrate its 10-year anniversary. The survey sought to understand how consumers perceived the experience of traveling as having changed since Orbitz’s inception. There’s reason for both hope and concern in the results.
Two findings caught my eye. First, 61% of survey respondents chose the ability to comparison shop among competing airline offers as the best change over the 10-year period. On the flip side, some 81% of those surveyed felt the worst development has been the optional fees airlines are now charging for services previously included in the price of an air ticket such as for checked bags.
Airlines took advantage of the 2008 jet-fuel price crisis to move decidedly down the path of unbundling and charging separately for existing as well as new services. There is the possibility that the industry has stumbled upon a revenue stream that is both profitable and sustainable. But there are risks to the airlines in this brave new world.
Today, airlines are refusing to provide consumers who purchase in the travel agency sales channel with optional fee information that would allow easy comparative review of all-in fares across various airlines. As the Orbitz survey shows, consumers highly value this electronic innovation. Static lists buried on an airline website are unworkable when because of optional fees there are now easily hundreds of thousands of combinations for each potential trip rendering manual side-by-side comparisons virtually impossible.
Yes, there is profit in consumer confusion. And most certainly yes, consumer anger will grow and regulators and legislators will step in to safeguard consumer interests if airlines continue to stonewall on this issue.
Indeed, travel industry research firm PhoCusWright recently published a report that indicates growing dissatisfaction with among business travelers and more affluent consumers – airlines’ most valuable customers – that calls into question the long-term potential of optional services.
Travel Agent Central reports on the PhoCusWright study:
“Consumers are inherently reluctant to buy more services from companies they feel are taking advantage of them – and unfortunately, many feel that way about airlines today,” said [PhoCusWright’s Research Director Carroll Rheem] Rheem. “Airlines have therefore put a ceiling of their own creation on the potential success of optional services. If they focus on repairing relationships with their passengers, airlines have the ability to break that ceiling. Whether or not they have the inclination remains to be seen.”
So, when Orbitz celebrates its 20th anniversary, will airlines have killed The Goose That Laid The Golden Eggs through unrestrained greed and commercial shortsightedness? Or, will enlightened airline leadership emerge to do right by the customer and usher in an age of true airline prosperity? I am hoping for the latter but working with Open Allies to protect against the former!
