Virgin Australia among carriers sharpening e-commerce tools to attract direct bookings

As online travel agents (OTAs) and metasearch engines invest heavily in their platforms Asian and Australasian carriers have been sharpening their e-commerce tools in a bid to attract direct bookings on their web sites, and generate ancillary revenue for travel extras.

The core business of OTAs is online, “whereas the core business of an airline is flying planes and servicing customers”, notes Virgin Australia manager, e-commerce Nandor Locher, who says OTAs “are becoming increasingly sophisticated and offer various travel products, [and] allow price comparisons, etc. This puts a competitive pressure on airline web sites.”

Whilst Virgin Australia supports a “channel neutral approach as far as pricing and availability is concerned”, says Nandor, there is a series of ways in which the carrier tries to incentivise direct/online bookings beyond offering what it believes is superior booking and self-service features on its web site.

These are:

• Price guarantee. Although Virgin Australia says it is not ‘under-cutting’ other channels, it guarantees that the lowest fares are available on its site.
• Inclusion of value-add products, both integrated in the booking path and standalone. The carrier highlights deals from its partners in the hotel, car rental and events space.
• Development of mobile web and mobile apps. The carrier is keen to support the growing number of guests who prefer to use smart phones and tablet computers to engage with the airline.
• No booking fees (other than credit card fees and call centre fees).
• Continued investment in developing Direct Connect capabilities. Direct Connect allows airlines to bypass global distribution systems (GDSs) by connecting customers to the carrier’s host reservation system.
• Improved content to both inspire and support travel research and planning.

Lawrence Fong, manager of e-business at Cathay Pacific Airways, agrees that web sites are evolving to enhance the entire customer experience by offering a one-stop-shop travel solution. Cathay, for instance, has been working to improve the usability and design of its site, payment options and security, as well as its search-engine optimisation.

“I think e-commerce professionals’ roles are now evolving to be more focused on merchandising and offering a retail kind of shopping experience to customers; not only focusing on getting the booking/ticketing done, but more on driving the sales by offering an integrated shopping experience and travel solutions across channels including web, call centres, mobile and social networks,” says Fong.

Among the challenges he cites is the ability to offer good, consistent usability and design on the various devices and browsers coming to market every month, as well as ensuring consistency across all touch-points where customers opt-in for different products and services.

Fong also notes that social media has become a tremendously important part of Cathay’s brand, as it acts as the carrier’s public persona and in turn an invaluable customer service tool.

Kim Walbridge, head of online for Air New Zealand, points out that e-commerce executives are increasingly looking at improving the conversion rate.

“There is a focus on more effective tactics for visitor acquisition and conversion. An important trend for visitor acquisition is retargeting, and for conversion, the opportunity provided by specialist optimisation and user experience analytics software,” says Walbridge.

Ultimately, he says, the objective is to “keep cost of sale for the channel below indirect GDS-enabled channels, as a rule of thumb”.