A survey of British consumers has revealed people are willing to spend up to £61 on hotel and airline extras that personalise their trip – be it champagne on arrival and your favourite minibar snacks, or preferred seating and fast-track security.
Known as “ancillary fees”, these add-ons came out of the low-cost airlines’ “unbundling” of fares. Where once your choice of seat, luggage and meal were included in the ticket price, nowadays they tend to come as options that need to be paid for separately.
And it’s not just no-frills airlines that are adopting this approach – even carriers such as BA are now charging for cabin bags, pre-booked “enhanced” meals and the ability to choose a seat with extra legroom.
In many ways this is bad news for travellers, but travel companies have been clever in turning it into a positive. They give you the “freedom to choose”, “guarantees” and, of course, “personalisation”.
How much are travellers will to pay on personalisation?
Ancillary fees make up just 0.5 per cent of overall revenues across European hospitality companies, with an average of just £10 per passenger spent.
However, a recent survey from global travel technology company Sabre found that UK travellers would be willing to spend more money on ancillary fees in the future, to better personalise their flight or hotel stay.
Sabre found that of the 2,000 travellers surveyed, people were prepared to spend an average of £61 on airline extras and £56 on add-ons to hotel bookings.
Sabre said this is “this is significantly higher than revenue currently generated by airlines from ancillary sales”, and “may represent a significant, but largely untapped, retail opportunity for hotels and airlines”.
Although a third per cent of respondents said they wouldn’t be prepared to pay anything on air travel extras, 33 per cent said they would pay up to £50, while 18 per cent said they would spend up to £100, and 15 per cent over £101. The results were similar for hotel stays.
Women were more likely than men to spend on personalising their journey, with 71 per cent saying they’d be prepared to pay for airline extras, versus 63 per cent of men.
Willingness to spend was also higher among younger travellers, with 20 per cent of 16 to 24-year-olds content to fork out more than £100 on personalising their travel compared with just 10 per cent of people over the age of 55.
How important is personalisation to travellers?
According to the study, 69 per cent of travellers think it is important to receive options catered to their personal taste and history of preferences.
Eric Hallerberg, managing director of UK and Ireland for Sabre, said: “My bank remembers my preferences, so it’s no surprise that consumers expect the same from their travel suppliers.
“The travel industry is leaving money on the table by not making their ancillary services more widely available, wherever and whenever the traveller wants them. It’s a significant retail and revenue opportunity, and one we are very focused on helping our airline, hotel and agency customers address.”
What role does data play in personalisation?
Some UK consumers were also happy to share personal information in return for a more personalised service, with 25 per cent agreeing to share their location with travel companies, and 33 per cent their travel history.
Lennert De Jong, chief commercial officer for Citizen M Hotels, said: “In the hotel industry, there is a real opportunity to use information from guests to create valuable and seamless experiences for them when they return.
“For example, you set your room to 18 degrees when you stay at Citizen M; why would we, on your next check-in, give you a room that is 24 degrees?
“There’s an opportunity for hotels that can learn from and respond to their guests, which will create not just additional revenue through purchasing extras, but also will garner more loyalty from travellers that feel like their hotel knows and cares about them.”
He added: “Travellers are likely to experience more of this seamless personalisation from their hotels within the near future.”