Global travel technology company Sabre has found that UK travellers are willing to spend more money on ancillary fees than they already do, to better “personalise” their flight or hotel stay.
Of the 2,000 people surveyed, Sabre found that travellers were prepared to spend an average of £61 on airline extras and £56 on add-ons to hotel bookings.
Sabre said this is “this is significantly higher than revenue currently generated by airlines from ancillary sales, which is just £10 per passenger”, and “may represent a significant, but largely untapped, retail opportunity for hotels and airlines”.
Ancillary fees make up just 0.5 per cent of overall revenues across European hospitality companies.
Although a third per cent of respondents said they wouldn’t be prepared to pay anything on air travel extras, 33 per cent said they would pay £1-£50 (quite a wide parameter in terms of fees, it should be noted), while 18 per cent said they would spend £51-£100, and 15 per cent over £101. The results were similar for hotel stays.
Women were more likely than men to spend on personalising their journey, with 71 per cent saying they’d be prepared to pay for airline extras, versus 63 per cent of men.
Willingness to spend was also higher among younger travellers, with 20 per cent of 16 to 24-year-olds prepared to spend more than £100 on personalising their travel compared with just 10 per cent of over 55s.
According to the study, 69 per cent of travellers think it is important to receive options catered to their personal taste and history of preferences.
Eric Hallerberg, managing director of UK and Ireland for Sabre, said: “My bank remembers my preferences, so it’s no surprise that consumers expect the same from their travel suppliers.
“The travel industry is leaving money on the table by not making their ancillary services more widely available, wherever and whenever the traveller wants them. It’s a significant retail and revenue opportunity, and one we are very focused on helping our airline, hotel and agency customers address.”
Some UK consumers were also prepared to share personal information in return for a more personalised service, with 25 per cent agreeing to share their location with travel suppliers, and 33 per cent their travel history.
Lennert De Jong, chief commercial officer for Citizen M Hotels, said: “In the hotel industry, there is a real opportunity to use information from guests to create valuable and seamless experiences for them when they return.
“For example, you set your room to 18 degrees when you stay at Citizen M; why would we, on your next check-in, give you a room that is 24 degrees?
“There’s an opportunity for hotels that can learn from and respond to their guests, which will create not just additional revenue through purchasing extras, but also will garner more loyalty from travellers that feel like their hotel knows and cares about them.”
He added: “Travellers are likely to experience more of this seamless personalisation from their hotels within the near future.”
Would you be willing to spend more money on personalising your flight or hotel stay, or do you see the “unbundling” of fares and “added extras” simply a way to generate more revenue? Leave your comments below.
By Jenny Southan