Airlines are doing it. Hotels are doing it. Now’s the time for the rest of the entertainment and leisure sector to (ahem) entertain the idea of bespoke software and upselling platforms.
2020 was a tough year for travel and hospitality. Globetrotters became armchair travellers and visiting a friend’s house generated as much excitement as an annual holiday. So how did four budget airlines manage to make billions and stay afloat (or in this case, aloft), and generate revenues that dwarfed those from ticket sales? We take a look at the impact of upselling platforms and how to copy the best (and avoid the worst) in the sector.
In 2020 the aviation industry suffered losses of $175 billion, according to the International Air Transport Association, while in the same year 660,000 people employed in the UK’s hospitality sector lost their jobs. Yet four airlines were flying high: how!? The answer is in ancillary services.
Ancillary services take off
In 2020, WizzAir, Allegiant, Spirit and Viva Aerobus earned more from upselling services than they did from selling tickets, according to an annual report by CarTrawler and IdeaWorksCompany. This is thanks to digital upgrades and integrations of upselling software into airlines’ bespoke apps and websites, as well as those of third parties.
A second industry which faced tough times, hospitality, is also harnessing this approach. A survey of hoteliers last year by software giant Oracle found that 81% expect a big shift in service model, with 49% strongly agreeing that amenities and upgrades are critical to their revenue strategy. The post-covid period has provided little let-up for the sector, with inflationary pressures, competition from rental properties and staff shortages among challenges. It’s therefore no surprise that hospitality businesses are looking to adopt techniques – enabled by bespoke software and upselling systems – to boost and diversify revenue.
The downside of upselling?
Call it ‘ancillary services’, call it ‘upselling’: most of us who’ve booked tickets with budget airlines will simply know it as ‘annoying’. It’s a familiar customer journey: you spot a £16.99 London to Lisbon ticket which you select. Instead of flying through to the checkout, the screen suddenly expands to display a preselected ‘plus’ option, adding almost £30 to your fare. Despite Ryanair insisting this is ‘ideal for your trip to Lisbon’, you revert to your original fare.
This is just the beginning. A second attempt to upsell a ‘regular’ fare (‘just £22 more – or the cost of a whole extra ticket) is followed by invitations to select a seat, add cabin bags, check in luggage and equipment, purchase insurance, security fast-track, pre-paid credit for in-flight services, car hire, parking, and bus and train tickets. What was once unnavigable is now an ingrained part of the customer journey, with many of us simply accepting the inconvenience in exchange for lower air fares.
However, while this approach to upselling ancillary services may work for airline revenues it can be damaging to brand reputation and customer satisfaction. Last year the story of a couple being hit with a £110 fine for printing their boarding pass at the airport made headlines across the UK. The airline? Yep, it’s our good friend Ryanair.
Bespoke software for a smooth journey
A balance is clearly needed. Upselling software must enable businesses to easily market and sell ancillary services to customers, while not impacting or complicating the customer journey. This process must remain fluid, engaging and easy to navigate. Too many pop-ups or those pushing irrelevant services may cause a customer to abandon their purchase or make errors in the customer journey (purchasing services by accident, for example), which can cause a headache for customer service teams further down the line.
Bespoke software and upselling systems provide a solution. Features and functions can be tailored to the business and its customer needs, with cost – and return on investment in the software – negotiated on a case-by-case basis. Hotels are one area of the entertainment and leisure industry that are successfully implementing such technologies. Aside from straightforward room bookings, these platforms allow hoteliers to market and upsell things like room upgrades, transfers and transport, tickets to local attractions, personalised concierge, and dining options.
Opting for bespoke software means the platform will be tailored to the business’s needs: a small chain of luxury hotels is able to offer and upsell personalised room and in-room service recommendations based on loyal customers’ previous visits and preferences, for instance. A larger resort hotel on the other hand could use a bespoke upselling system to market and sell ancillary services to non-guests, such as conference facilities and wellness and spa packages.
Upselling platforms take centre stage
When it comes to unlocking revenue from ancillary services, the entertainment and leisure sector as a whole could learn a lot from the (often poor) examples of the airline industry and the (often excellent) examples of hoteliers. The theatre industry, for instance, suffered heavily during the pandemic. Things have improved – in 2022 the West End reported a rise in attendance compared to pre-pandemic, but rising costs (such as maintaining historic theatre buildings) and the need to keep tickets affordable in a cost-of-living crisis, means challenges remain.
Bespoke software and upselling systems could help address some of these challenges, encouraging return visits, offering new and additional services, and increasing per-visitor spending. Regular theatre-goers could be offered annual memberships for instance, or – like digital streaming – monthly subscriptions to attend different shows at a lower rate. Fundraising could get a boost by integrating donation options to the customer journey, and add-ons like backstage tours and food and drinks packages could further increase revenue.
Businesses in the sector should look to upselling platforms that enable personalisation, using customer data to offer relevant services and enhance – rather than frustrate! – the customer journey. A family could receive a discount on a family meal deal at a sports arena, for instance, while a couple could be offered a 2-for-1 deal at their local spa or gym.
Searching for and booking leisure and entertainment experiences can be enhanced on both the customer and business side by implementing bespoke upselling software. Many in the sector could emulate the success of those doing well while learning lessons from brands who seem to sideline customer satisfaction. Get in touch to discover how bespoke software development and upselling systems can benefit your business.