Recently, due to increased awareness of tools such as ChatGPT, there has been much publicity around artificial intelligence (AI) in both trade and general news media, not to mention its perceived (and often over-hyped) benefits to an organisation.

Amidst the hype of AI, a fundamental understanding of the benefits of automating key business processes often gets lost. Group bookings are an area where automation can bring huge benefits to an airline and maximise the revenue potential from this key market.

 

Calrom’s analysis finds that, despite the huge investments in technology and automation by airlines across the globe, often an airline’s Groups department lacks those key investments and still relies heavily on manual processes. This is despite Groups customers often being some of the airline’s most high profile – for example, national sports teams attending prestigious events such as the Olympics or World Cup.

The key to this success is ensuring the automation brings true value to – and generates increased revenue for – an airline from their group bookings. A system that can deliver a premium service offering to travel agents and the end customer and simultaneously contribute to measured revenue growth is undoubtedly important.

Below we’ll delve into some of the revenue opportunities available in more detail:

Increased booking levels
Optimised fare offerings
Upsell opportunities
Compliance revenue

Increased booking levels

One of the complexities we often see with group bookings is when a customer wants to fit a large group onto the available flights offered by an airline between two locations. It can be necessary to split the group across multiple flights to achieve their needs which, without automation, can be a lengthy process!

It’s really important to give airline customers the tools they need to access a variety of scenarios online in real-time, to ensure they’re always able to find the ideal flight solution to their customer’s needs, at a price that works for them. Self-servicing for travel agents means they don’t have to deal with lengthy research or response times, leading to increased satisfaction and directly correlating to increased group booking levels for the airline.

Furthermore, automation of the core flight booking flows (plus the ability to integrate with other airline systems) enables airlines to protect their seat inventory and ensures group bookings don’t impact their premium revenue opportunities elsewhere across their customer profile.

In summary, automation done well ensures the airline can protect its prime market offerings through price or other control options – a reason in itself to consider a solution that’s fit for purpose.

Optimised fare offerings

Airlines may already be able to provide optimised fare offerings to other customer types, but without a group booking platform that can link into their inventory control and revenue management systems, it’s typically been harder to roll this out for Groups customers. This is down to standard revenue management systems, which often aren’t designed to optimise the fare offerings for groups.

The additional intelligence possible by implementing a specialised group booking platform enables airlines to extend that optimisation to their Groups customers, ensuring they’re offering the correct fare to the correct customer. This protects core revenue by not underselling their seats and therefore maximising revenue they can derive from an individual booking.

It’s key that any fare optimisation to airline’s Groups customers is able to use the customer’s data (and that of their passengers) to apply specialist knowledge and expertise of a specialised group booking platform to derive their fare offerings.

Upsell opportunities

Most airlines have sophisticated channel offerings, marketing campaigns and customer knowledge to maximise their upsell opportunities via other channels by driving ancillary purchases and cabin upgrades to their customers. However, we often find Groups are the last channel to be considered for key opportunities.

In the Groups booking space, airlines often don’t offer their customers easy ways to offer cabin upgrades to travellers, but often policies outright disallow those upgrade opportunities as the airline is concerned about the ability to manage and control those options if they are made available using manual processes.

The beauty of an automated group flight booking platform ensures that, not only can they offer cabin upgrades to their customers with the confidence that they’ll be offered and managed properly, but it also allows travel agents to target cabin upgrades to the key passengers on a booking. Yes, that’s right – they’ll have the ability to mix and match passengers across the cabins available on a flight, thus meeting their own customer’s expectations and driving increased airline revenue.

As discussed in our last blog post – the challenges with airline group bookings – ancillaries are an increasingly important source of revenue for airlines, with research showing annual growth and estimated revenue of nearly US $118B in 2023 (CarTrawler Worldwide Estimate of Ancillary Revenue) – well above the previous record achieved pre-pandemic of US $109.5B in 2019.

However, most airline Groups systems have not been able to offer ancillary services to their customers or, even more detrimental, must offer them free of charge in their groups fare to ensure they can meet their travellers’ needs.

To ensure group bookings aren’t left out of this key revenue opportunity, extending the automation to allow ancillaries not only drives increased revenues but also has the ability to attract more customers since they can offer more desirable options (e.g. preferred seating) to their customers – the first-mover advantage. It’s important to note that any ancillary offering has to be easily accessible and part of the standard booking flows to maximise customer opportunities.

Compliance revenue

By their nature, group bookings incur many changes between the time of booking and travel such as flight changes, connecting flights, name changes, adding or reducing passengers and more. If an airline handles these manually, there’s no easy way to ensure all changes are tracked and managed to ensure additional fees, restrictions or rules are applied consistently, in line with policies and T&Cs.

Automation is essential to ensure any changes are tracked and their impact managed – for example, keeping the customer informed and ensuring the correct funds are received across the booking lifecycle. An automated system ensures that all relevant and applicable policies are applied to the Group booking and that the required number of passengers go on to travel.

Ultimately, automation of an airline’s Groups T&Cs protects the airline’s key commodity and ensures that they receive the revenue from tickets and compliance rules as per policy, without the need to manually review each booking.

 

When creating Groups Next Gen, we’ve used our understanding of airline challenges above to offer automated solutions to all the above challenges – and more!

Want to find out more? Get in touch – it’d be great to have a conversation about how we can help.