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Azavista White Paper_Group Flight Reservations

Azavista White Paper_Group Flight Reservations

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Azavista White Paper_Group Flight Reservations
Azavista White Paper_Group Flight Reservations

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Published by: TravelDailyNews on Apr 01, 2014
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Azavista White Paper March 2014

Group Flight Reservations: Trends, challenges and recommendations

G

roup business accounts for a significant percentage of airline revenue. However, when arranging group flight reservations, various challenges are often posed to both parties involved. Azavista surveyed 200 group travel managers and 20 major airline carriers in EMEA and United States in order to identify the nature of these challenges and offer insight as to how they can successfully be overcome while increasing profitability and customer satisfaction.

Now more than ever, the market has to be in sync and adapt to new trends in order to maintain its viability

Introduction
These past years have been particularly turbulent for the travel industry, with budget cuts and economic downturn significantly effecting all parties involved. However, according to the latest financial outlook from the International Air Transport Association (IATA), the global airline industry should make a alltime high net profit of $19.7 billion in 2014. On top of that, passenger demand is “robust,” and expected to rise 31% between 2012 and 2017. This is all well for individual and business travel, nevertheless, airlines should not neglect the needs and requirements surrounding group flight reservations. Following Azavista’s recent survey, there is plenty of room for improvement and the airline industry should approach this as an opportunity for growth and extra profitability.

Reservations
One would think that the airline industry would wholeheartedly welcome reservations for multiple passengers and encourage these bookings by making the procedure as easy as possible. This is not the case. For individual bookings the travel planner can make a reservation via a Global Distribution System (GDS) or online booking system in a matter of minutes. For group bookings, however, the process can take days, even weeks. Most communication, including the Request for Proposal (RFP) process, is done via email. Only a small percentage of airlines allow planners to send a request through their website. The majority of airlines aim to provide an offer within 24 to 48 hours of receiving a request. However, some airlines have internal policies in place which require a series of approvals that in turn can cause delays. The process can also be delayed if the end client has not made a decision, or the final number of guests traveling is not confirmed.

Group vs Individual Bookings
Is the reservation process for groups more complex than FITs? Is it more difficult to find a good price for group flights than for individual bookings?

5% 15% 14%

5%

80%

81%

Yes

No

Other

Source: Azavista group flight reservation survey, November 2013

Pricing & Payments
Price is another sensitive matter when comparing group flight reservations to individual bookings. Over 80% of respondents say finding a good price for groups is harder than FITs. Airlines attribute this difference in pricing to revenue requirements. Prices are determined based on several fare classes. In each class, there are a certain number of seats available i.e. 10 seats in the lowest fare class, 25 seats in the next and so on. Therefore, when it comes to group bookings, airlines will typically take the average price of the lowest three classes (or two classes) and divide it equally. The price can also depend on availability and other factors. Price is a key element in any business decision. In the survey, almost half of the respondents stated that price is the deciding factor when making a booking. Price surpassed other elements like routes, flexibility and amenities, ranking first out

Price Most Important Factor
Which of the following factors do you rank as most important when making group flight reservations?

Price Flexibility Other Routes 16.5% 14% 25.5%

43%

Amenities & Services 0.5%
Source: Azavista group flight reservation survey, November 2013

of the list of components most taken into consideration. Planners are confined to minimal budgets and have management or their clients pressuring them to find the best deal possible. Following Azavista’s survey, over 80% emphatically said good prices in group travel are hard to come by. Furthermore, travel planners categorically stated there is substantial room for change in the payment terms and conditions imposed by airlines. Azavista’s survey revealed a large variety of insightful recommen-

dations. Some of the most prominent were:

credit and debit • Allow card payments a small deposit upon • Require reservation (10 to 20 percent) and the balance to be paid maximum 30 to 60 days prior to departure

• Refundable deposits more flexibility in • Offer cancellations
Flexibility

“80% of group travel managers say they would like a technology solution that can handle all aspects of group flight arrangements, such as sending RFPs, receiving offers, tracking terms and conditions and handling passenger details.”

Travel and event planners often have to deal with last minute approvals, changes or cancellations. In Azavista’s survey, a tremendous 88% stated they would appreciate longer option dates for their reservations. Over 56% of respondents stated that airlines should offer more flexibility in changes to group flight bookings. Flexibility is of the utmost importance to them, but the airline industry does not seem to be that compassionate.

Should Airlines Be More Flexible?
Do airlines allow enough flexibility for changes (i.e. date and name)? Would you like airlines to offer longer option dates for groups?

Conclusion
The findings from the Azavista group flight reservation survey indicate a serious need for the industry to improve procedures and processes related to group air reservations. Respondents describe the process as chaos, while others even went as far to call it a nightmare. The majority of respondents describe group flight reservations as expensive, inefficient, frustrating and time consuming. Many highlighted the long delays in waiting for availability and quotes, as well as the tight option dates and strict conditions. Travel planners are more and more taking into consideration which airline is the easiest to work with and which can offer the best terms and conditions. Both parties should work together to facilitate a more efficient planning process.

15% 29%

7%

5%

56%

88%

Yes

No

Other

Source: Azavista group flight reservation survey, November2014

High demand

before the group arrives

These are the key findings:

[trouble] x [# of pax] = Group flight reservations International Board Meetings

Possibilities

Almost 60% of respondents stated group check-ins can be more efficient. Azavista interviewed participants and asked what they would recommend in order to do so.

The compilation and dispatch of passenger lists to airlines should also be made more efficient, per the request of travel and event planners. Sixtyseven percent of respondents stated that these procedures are time consuming and require a lot of manual work.

#s

Operations

Long Delay

Work

Trouble Headache

Oh No! Panic

Good Business

Inefficient

For airlines, on the other hand, conditions are strict because groups come with a level of uncertainty. If, for example, a group of 50 people cancels and the airplane has a capacity of 150 passengers, then the airline will lose one-third of its revenue and only has a short time to sell the seats. Therefore, airlines choose to reduce this element of uncertainty by setting terms and conditions that will safe-guard them in a possible cancellation.

• Separate counters for groups online group check-in, • Simple with pre-seating options tool that allows the • Online passenger to check in, without
being able to view rates, conditions or make any booking amendments

• Allowing group baggage check-in Nightmare boarding passes printed in • Having advance and luggage tags ready Restricting

Terms & Conditions

Price
Hard

To ug

h

Technology as a Solution
Besides the apparent need for the industry to collaborate in order to ensure a smoother group planning process, technology can also play a vital role in facing the aforementioned challenges. After conducting rigorous industry research and taking into consideration the input from travel professionals around the world, Azavista is developing the first online solution that will streamline the group flight reservation process.

Currently, Azavista offers an advanced eRFP and supplier sourcing tool that allows planners to seamlessly manage group accommodation, meeting space, dining and transport. Azavista offers this solution completely free of charge.

Click here to get your FREE account now

About Azavista
Founded in 2010, Azavista is a product of Web and IT specialists, as well as a team of travel and tourism industry professionals. Azavista is the first - all in one - Web 2.0 solution that streamlines every aspect of group travel, event and meeting planning. Using advanced technology, the Azavista platform offers a multitude of features that covers even the most challenging needs. From e-RFPs to group transportation, event management, industry data, delegate communication, online contracting, logistics and more, Azavista is an A-Z planning solution. The company is headquartered in Amsterdam, The Netherlands. For Questions, Please Contact: Cassandra Michael cassandra@azavista.com +31 (0)20 8464066 www.azavista.com

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