Why Stopovers are Air Travel’s Opportunity for Recovery
The time is now. The travel industry is in critical condition, and it’s absolutely imperative for airlines to get passengers back on board and differentiate from the competition so that recovery is on the horizon. One way for the airline industry to achieve all of this is with stopovers.
For airlines, stopovers can be an attractive marketing tactic to increase passenger demand and drive direct traffic to the airline’s website and hub. By offering a different travel experience to travelers, airlines can differentiate their brand and capture more revenue per passenger. For passengers, a stopover comes at no extra charge for the flight while opening revenue opportunities for airlines from offering third-party ancillaries like hotels, car services, and local attractions. So, if a traveler is on his way from Europe to Asia, how about a quick stop, offering the opportunity to explore Dubai for a couple of days? A stopover makes this possible.
Benefits for Airlines and Travelers Alike
What is a stopover? One thing a stopover is not is a layover, which is when the traveler has a (hopefully short but sometimes long) pause in an airport in a city somewhere between the departure city and the destination city, and it’s not something that’s planned for in advance. A stopover is included on purpose at a mid-point destination, where the traveler can spend a few days. So, you’re giving the traveler an opportunity to visit two destinations at the price of one flight.
In the context of recovery, stopovers can be an opportunity to revive air travel. Now, airlines can capture connecting traffic to offer more than a flight and upsell hotels, experiences, attractions, and packages. It can be a very integrated experience that can be an opportunity to build a brand connection with travelers and increase revenue per passenger. Loyalty programs support using earned miles as currency to pay for all sorts of things. Travelers enjoy an end-to-end experience by easily getting everything in a package that can be booked in the same booking flow: the flights, the car, the hotel, and the experiences. The airline makes it easy to arrange it all and can offer better deals.
Currently, there are many stopover destinations that are popular because of their central locations (between the US and Europe, and between Europe and Asia). These cities offer beautiful landscapes and fun city attractions, and airlines can easily promote this and benefit from it. Stopovers have also grown in popularity because they stimulate tourism, an important source of revenue for the local cities. And travelers get more value for the money they are spending on their trip by getting to see more without having to put in the booking legwork, so it’s a win-win.
Now, you may be wondering why you haven’t considered this option in the past.
Booking a stopover is a complex booking process for both airlines and travelers. Airlines have a hard time presenting a multi-city booking flow on their website, and because of this complexity, airlines end up presenting a bad UX and usability to travelers for booking a stopover. This causes travelers confusion, and instead of booking a flight with a stopover, they end up booking several segments that come at a higher price than what airlines promote (the price of a stopover being the same as a flight with a layover).
In order to overcome this complexity, airlines need flexibility of their booking engine and a digital-first user experience in addition to a revenue management solution. Most airlines face barriers such as:
- Lack of flexibility: 84% of airlines say their digital platforms are either not flexible or that it takes time and effort to implement new products and processes.
- Legacy booking engines: These require upgrades and are a key area for investment.
The path to digital retailing plays a key part in resolving these challenges and creating opportunities. By embarking on this transformation journey, the value from retail, such as stopovers, is estimated at $40 Billion, according to McKinsey and Company, so airlines understand that this is the path to sustainable growth.
For travelers, this journey starts with inspiration, and there are multiple ways airlines can inspire travelers with the content. It could be by promoting bookable deals through email, or by attractive social media promotions of cities and destinations.
Once brought to the airline direct channel, whether it is web or mobile, booking a stopover can be so much easier through a responsive booking widget that prompts the travelers if he/she wants a stopover.
In addition to the flight, airlines also have the opportunity to offer third-party ancillaries like hotels, cars, and experiences. For travelers, this means an end-to-end experience when booking the stopover, and for airlines this is a revenue opportunity to upsell beyond the flight and build their brand image.
PROS Solution for Stopovers
Until PROS, there was no product to support a stopover experience business case. PROS Retail solution is designed to be able to take any connection and make it a stopover destination. PROS has completed multiple stopover projects with a lot of user testing what resonates with travelers. This led to adding design enhancements like mapping with the itinerary. This helps airlines visualize stopovers to help travelers understand their trip better.
With PROS solution, many airlines were able to introduce a stopover booking engine. The simplified booking experience for travelers and the responsive design led to significant results - a 1,000% increase in stopover conversion rates and a 500% mobile conversion increase, leading to 10% increase in online revenue.
“What we have built goes beyond the typical round trip and one-way bookings.
We have been looking to simplify the booking process for those travelers who desire to book a ticket with a stopover on our website.
Launching this new booking engine is not only welcomed by our customers but also a vital part in supporting our country’s tourism industry.”
-Airline’s Vice President for Distribution, Commercial Excellence & Data Science