20 September 2006

Business Fares - Fooee Don't Pay Retail

So who pays retail in business fares... well to some extent we all do. In a headline entitled: BUSINESS FARE SURVEY RESULTS MISLEADING Kevin Mitchell and the BTC challenged the Amex Annual fare study as being unrepresentative of the state of the market. Well if we are all paying retail then we are all 100% mad. But that is not the case (unless you are trying to get a room in New York this fall!!!) http://www.businesstravelcoalition.com/statements/5_yrs_later.doc

Kevin's point is valid - people don’t pay full retail. Amex's point is that fares are going up. They are both right. The real issue underneath all of this is one of my favorite topics - the creation and display of a true market fare. There is no decent benchmark for this in "official" terms but if you want to go and see it - go to the Orbitz Matrix and its right in front of you.

You would think that someone had figured this one out by now. But the game we all play - as consumers - is to find a best fare option. No one fare is the true lowest fare. The intersection of your need to go (desire) the fares available (shopping) the flexibility and the other people who want to go... coupled with the watching of the fares by the competitors and the desire for the airlines (and American Express) to sell the most at the overall highest price will always be sport. Herein lies another interesting debate. Does the simple solution of Southwest or the highly complex displays of Air Canada make it easier or harder on the consumer? Frankly if you try to confuse me - I will run away. (aka click away). So give me a straight story that is believable and I am much happier –I will trust you and buy from you. Somehow I don’t think I am that different from the vast majority of the buying public.

Oh yes and despite "being in the biz" I still have to buy a ticket about 90% of the time. And yes its hard and yes it is an unnecessarily complex transaction. But do we have a choice at present? No. Should we.... YES!

Long term if its too hard the consumer will go elsewhere. If you make it too hard and put too many barriers to purchase he will buy elsewhere OR a different product. Your $300 fare on the weekend can just as easily go to buying a lawnmower or a nice suit. Put that in your Revenue Management System!


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