New marketing tactics, along with recent market developments in Europe, offer an opportunity for travel marketers to reset the relationship, according to a new eMarketer report, “Europe’s Online Travel Showdown: Providers Vie with Online Travel Agents over Digital Booking Business.”
The popularity and influence of online travel agencies (OTAs) among Europe’s consumers is skyrocketing. But their dominance has proved a mixed blessing for hotel operators and airline brands, which find themselves increasingly reliant on OTAs to acquire customers and paying escalating commission fees for the privilege.
OTAs have traditionally been a less important distribution partner for Europe’s airlines. The highly competitive European airline market, led by popular low-cost carriers Ryanair and easyJet, has headed a multiyear effort to encourage direct bookings, a campaign that is now being adopted by Europe’s “flag-carrier” national airlines as well.
Revenues from add-on purchases like baggage allowances are one factor contributing to direct booking on airline sites. Some of Europe’s flag-carriers, including Air France, KLM, British Airways and Swiss, are seeing a marked increase in ancillary revenues due to new bag fees introduced on intra-Europe flights last year. According to a report by airline marketing consultancy IdeaWorksCompany, European carriers earned $12.6 billion in ancillary revenues in 2013, accounting for more than 29% of revenues worldwide and the second-highest total of any region after the US market.
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