Unlocking Ancillary Revenue: Strategic Marketing Tactics for Vacation Packages
In today's competitive airline industry, it's clear that offering just a seat on a plane isn't enough. This conference session delves into the strategic benefits of combining hotels and vacation packages with flights. It's a forward-looking approach that promises to enrich the travel experience for passengers while unlocking additional revenue opportunities for airlines via Ancillaries. Through this integration, airlines have a unique chance to go beyond transportation and play a key role in crafting memorable journeys.
Full Transcript
Claudia Martinez: Hello, welcome. All right, the topic of our next session is Elevating Marketing Tactics for Vacation Packages to grow ancillary revenue. Raise your hand, those who like big deals for your next vacation. Awesome. Raise your hand those who want to increase revenue through ancillaries. Fantastic. You're in the right session. So, I'm excited because this is the first time that we have in our platform a session dedicated to vacation packages, and you will see how this is getting more, more and more relevant. Our wonderful speakers, we have been working together for I think over eight years, but specifically for vacation packages for around three, four years. They will share their perspective and best practices with you. Thank you for joining us. We are honored to have you. We have Ana Isabel Chavez, head of Performance Marketing at YaVas, and Grant Ruckheim, senior Analyst Ancillary products in United Airlines. As you can see, we have different type of airlines, different regions, but also really comprehensive because they are different business models. So, I will let you introduce yourself better a little bit more. Thank you.
Ana Isabel Chavez: Thank you, Claudia. Hello everyone. Good afternoon. YaVas is the only OTA, which is endorsed by Volaris, a Mexican airline. We are not a white label; we are not a commissionable business. We think that the best way to approach our business was to develop our e-commerce with EveryMundo and Juniper technology. In this opportunity we have a B2C model and soon a B2B business. We have dynamic markup, and because of we have all our offer via API, we have higher capabilities of negotiation for all our products. We sell hotels, vacation packages, transfers, why not Disney tickets. And in this way, we are bringing the airline a higher revenue. And also, for YaVas, we are giving our customer a more valuable proposition because they can book their trip in a one stop shop and they have all their need for the trip.
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Claudia Martinez: Thank you. Grant.
Grant Ruckheim: Thanks Claudia. Yeah, so I work on the ancillary products team at United Airlines, and so we're the team that's responsible for all of our ancillary revenue from our paid seat products, bag revenue, wifi, day pass, pet and cabin priority boarding, and premier access, all of those fun things. And I work specifically on United Packages which is different than YaVas. It's actually, it is a white label hosted by Priceline. So, we partner closely with them and we earn ancillary revenue through the commission. And also, it creates a good product offering for our customers and that they're able to have access to steep discounts on our fares that's bundled with flights and/or bundled with hotels and cars.
Claudia Martinez: Awesome. Thank you, Grant, Isa. Getting into the topic, ancillary revenue is getting more relevant than ever. In the last decade it has been duplicated and the last year reached the maximum height of 15% of the total revenue of the airline in the industry. But specifically with ultra-low cost like Volaris, like Frontier, it has been reaching up to 50% of the total revenue of the airline. So, airlines are allocating more resources into enhancing the experience of the user going beyond offering a seat and delivering memorable journeys, but also strengthening the brand and loyalty with users. And that's why also PROS has been developing new solutions and technology to help you succeed on your goals. Please let us know, Isa, how is the perspective of why YaVas started and how is this perspective of the ancillary revenue for you guys?
Ana Isabel Chavez: Yeah, of course. So, we discovered that the business rules in YaVas were way different from the airline, and also we realized that we cannot compete in budget with the other OTAs. So we need to find our blue ocean. So, we use the airline, the airTRFX landings to create a brand awareness strategy. While our team was focusing on the core business, what happened these landing pages start giving us authority and coverage on the internet so that in the meanwhile we can be able to connect whole different products for our client.
Claudia Martinez: Grant, can you help us with the perspective of United for this project vacation packages?
Grant Ruckheim: Yeah. Ancillary revenue is really important to us at United and United Packages falls within our ancillary revenue portfolio and contributes to that. But I'd say too aside from just the ancillary revenue, it's an important brand offering for our loyal United customers. Our MileagePlus members that are always traveling with us on business, it gives them the opportunity to book a leisure trip with their family and get a great deal when they bundle their flight and their hotels together.
Claudia Martinez: Awesome. Thank you Grant. Okay. Let's start with the challenges. How was before airTRFX? airTRFX is the scalable technology that helps you create landing pages for all the route network with dynamic price modules. So how was YaVas before airTRFX?
Ana Isabel Chavez: Yeah, so COVID was an accelerator live test for YaVas because we were just launched a project. We realized we don't have any sources of traffic. The only source of traffic we have was the referral from Volaris. So, we start creating with the landing pages organic traffic. And also, this is very interesting because this was the way we start facing our competitors. Now we have an average rank, average from four. We are about as Despegar and Kayak. Again, we cannot compete with their budgets, but these products allow us to boost SEO and mix with our media plans so we can scale the business and leverage sales.
Claudia Martinez: Thank you. Grant, how was the challenge before airTRFX for United Packages?
Grant Ruckheim: Sure. Yeah, and United Packages is a relatively new product offering for us. We launched in 2020 also, like right during the pandemic when people were not booking leisure trips and looking for flights. So, I think while United has a pretty big brand recognition United Packages, it was a challenge for us to build that. And while traffic directly from the United Mobile app or.com was really beneficial to the product, partnering with airTRFX was kind of a no-brainer. We had actually, as a company, already been working with airTRFX to boost SEO for flights. So, customers searching like flights to Cancun. We already had template pages that existed, and so it kind of became a no-brainer for us to work with airTRFX. And we've seen, so I think we launched the airTRFX pages for packages and a couple years after we launched United Packages. But we've seen over the last six months, you can see like the clicks on our, the organic traffic to our airTRFX pages for packages has steadily increased and it's been consistently improving.
Claudia Martinez: Thank you. Yes, we have seen a trend growing year one, year two, year three on airTRFX. And also, we have been discussing in other panels how is the incremental traffic that provides to airlines. But we have seen that this proportion on vacation packages is even higher, we have seen with our customers that it contributes on up to 50% of incremental organic traffic and 22% of incremental revenue. But besides the landing pages for routes, there is a possibility to create unlimited pages, custom pages as well for any topics with the dynamic price or modules. How is airTRFX helping United to get more incremental traffic and revenue?
Grant Ruckheim: Sure. In a number of ways. So, like I mentioned we had already been working with airTRFX for organic or boosting our SEO for flight search results, for customer searching flights to Cancun or flights to Las Vegas. And so, one quick win was to incorporate a module on those already existing template pages that were ranking pretty well, so that when they landed on that flights to Cancun page for United, they could see an actual live price for a hotel plus a flight and images of the hotel property. So, we incorporated a carousel module onto all of those existing template pages. Another thing that we did was, like Claudia just mentioned, custom pages. So, we've been working to launch a number of custom pages for capturing some of that the high funnel traffic for people that are searching, that are kind of at the exploration phase of their trip, and maybe they're searching for like “ski destination vacations” or “vacations to beach” destinations or “family friendly vacations”.
Grant Ruckheim: So, we have custom pages that we've been building out to secure some of that traffic, which has been really successful for us. And as you can see in the left, we've been incorporating like interlinking modules, or we have interlinking links to all of those different custom pages within our packages homepage. And the last thing too, I'll say is the tool's been really easy to use, like we've been able to incorporate and I've been able to just go in and schedule like banners that help promote things like sweepstakes or bonus mail promotions that help, that we often will have paid campaigns for that brings in some additional traffic. And they're really easy to schedule and make responses so they look good on mobile and.com.
Claudia Martinez: Thank you Grant. Yes, I wanted to highlight, this is the best practice to link those strategic pages on the header of the core website. And Isa, also airTRFX has been helping you to strengthen your partnerships. Can you elaborate a little bit more on that?
Ana Isabel Chavez: Yeah, of course. So, we have different referral points on Volaris website, which give us a very high quality traffic to YaVas.com. But also, Volaris has EveryMundo landing pages and this also allow us to create campaigns between the airline and YaVas OTA. So, in this way, we have a powerful interlinking between both sides. And another thing with EveryMundo landing pages is that we can create very powerful custom pages. Basically we can do everything in landing pages and they are very flexible. So, we use the custom pages to create corporate campaigns with our partners and some states. So, what do we do? We create some investment from our partners, and in this way we increase our budget, our marketing budget, and we create powerful performance campaigns. This was several examples we made. We, have growth in Vegas in 63%, versus 2023, our average room rates increase 49%.
Ana Isabel Chavez: And this is something, outstanding as well because the average ticket in hotel increase as well in 20%. We don't use only landing pages for vacation packages. We also develop custom pages for all the different products we have on our OTA. So that's the way we leverage the sales on the standalone product as well. So we can almost, do everything with landing pages. We can also just filter one specific product from our partner. For example, this one is with inclusive collection, all the Secrets, Dreams, Soundscape hotels. So, we make a corporate campaign with them. They, finance 50% of this campaign, we finance the other 50% of the campaign. And in this way we are upscaling the business because Volaris has a low cost strategy, and we are not going to have even, more budget. And because of the OTA, it's a different model. We need to find ways to grow, the Volaris, agency. So that's what we are doing.
Claudia Martinez: Awesome. Let's talk about the increasing conversions on the other marketing channels. We talk about SEO and you both having awesome collaborating with other areas of the organization and creating more impact, increasing conversions in more channels. Isa can you elaborate a little bit more on your campaigns? You mentioned that all the touch points go, go to airTRFX and you're using airTRFX in all the journey from the inspiration to conversion. How?
Ana Isabel Chavez: Yes. So, we develop a full funnel strategy, with landing pages. We start like the whole process because our client starts dreaming about their trip. So, with social media and paid media, we start getting them inspiration. That's like the first step of the funnel. And then the second phase is to interact with all this publicity to have quality traffic to engage with that user. And then we drive all that potential clients to a custom landing page to convert. This is like the process. We are, optimizing all the time. We are, getting like 43% more of conversion with our corporates, our states, our products. So that's basically like the three steps that we take every time we make a performance marketing campaign, and we use our landing pages to boost the conversion and to drive the user just to the offer they want.
Claudia Martinez: Thank you. Grant, besides the module that is on the flights pages, that is going to vacation packages, you having also using the airTRFX pages on many channels and doing tests on email. And can you tell us a little bit more on that?
Grant Ruckheim: Sure. Yeah. We don't have any like, always on paid campaigns for packages, but we've been utilizing custom pages and existing template pages for email tests. And so we have a pretty extensive and growing email distribution list specific just for United Packages that has been a useful resource for us. And so we send out about like an email almost every week, showcasing different destinations or sometimes different properties. And we've been utilizing that channel to take customers to EveryMundo landing pages. And, sometimes we'll split traffic, so we'll send half the traffic to an EveryMundo page and half the traffic to directly into our United packages site. And we've seen some really, really, great results from that in terms of conversion rates, and in some cases increasing like the average order value of the customer that lands on those pages.
Claudia Martinez: Awesome. Thank you. Yeah. Utilizing the landing pages on the different marketing channels helps not only increase conversions, but also offer a seamless experience to users since it's the same source of the fare that we have on the landing page, that the user will convert and also airWire. We are about to launch airWire for Facebook with the prices of vacation packages. Thank you, Isa, you have been very proactive and suggesting us all these ideas and this is how we build our roadmap. So, we appreciate the input of you, Grant and Isa, for this. What's next? What is the biggest challenge that, United Vacation Packages, will face and how we can help you succeed on your goals?
Grant Ruckheim: Sure. I'd say one of the biggest challenges is, is maintaining the growth that we've seen and, in some cases, like, I guess beyond defense. Like I've seen certain pages that used to be ranking 15th, when you search vacations or like “Cancun vacation packages”, for example, and now it's jumped up to five. And so, one of the challenges just making sure we can maintain that ranking and find ways to continue to increase traffic. And I think, one of the ways we're doing that is by continuing to optimize the pages that we have already. And that's by adding some more rich content on the pages, things like frequently asked questions, things that we think Google will rank higher and will serve to the customer when they search for different vacation related terms. And, yeah. Another area that we do to improve those is also just by building more collaboration between, our United team, the EveryMundo, airTRFX PROS team, and then our team at Priceline that we work with.
Claudia Martinez: Thank you. Isa, what are the next challenges that PROS can help you with?
Ana Isabel Chavez: We have so many challenges, but I think that in our case, because we build our own e-commerce, we have several connections and it's very difficult to get a standard for some promotions or some discounts that came from the API. So this is a very challenging goal we need to face because it's difficult to take these information from the APIs and put it in the front end. So we are facing that issue right now. And I think the other very important challenge we have is personalization. YaVas started four years ago. We are about to have our fifth anniversary this year, and we have now enough data to understand our customer, to start building new business cases to increase the conversion, to understand their behavior and to recommend new products because YaVas is not just vacation packages. We need to understand better our customer use the data we have from over four years and start making new use cases to sell them the other products we have as well. Transfers currently based on their behavior. So, I think personalization and facing all the connections and cleaning all the offers we already connect is the major challenges we have.
Claudia Martinez: Thank you. Is there anything else you would like to share? Best practices that you want to share with the audience?
Grant Ruckheim: I guess one thing is just getting your hands dirty in the airTRFX tool and actually building the pages. It's been really easy to use, and I've had a lot of ideas spark just by trying things out with custom pages specifically, and that's been really helpful.
Ana Isabel Chavez: Yeah, I agree with you. And I think another thing to do, it's to create useful content for the user because we don't necessarily need to update our landing pages like every time. We just need to create unique content with the necessary density of keywords so that we can face the competitors and scale the business, like to maintain that SEO strong. And also, I recommend you to see the marketing strategy as a balance between paid media plans and SEO because one compliments the other. So, if you are not strong enough in creating a good strategy for organic, then you will have to pay more and more in paid media plans or SEM. So, I think it's very important.
Claudia Martinez: Thank you. Thank you for sharing all these insights with the audience. It has been a pleasant journey working with you, facing the challenges together, hearing your ideas to create a better product. And to all our customers, please let us know your challenges, your needs, your ideas. This really help us to build better products to help you better. We value your opinion a lot.