A recipe for success– value with bundling | TravelResearchOnline

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A recipe for success– value with bundling

Thinking back a few decades ago, one of the main products retail travel agencies sold was airline tickets. And the other products sold from tours, hotel packages, and cruises added to the revenue stream that complemented airline sales. But with commission cuts and changes, the retail travel industry has evolved. And today the travel professional role has evolved into one more of specialization. Yes, we’ve become more than just being an “order taker,” and where we really provide value! Filling in the gaps and needs of our clients by joining those services and products together – in effect, bundling.

What is Bundling?

Over the few past years, the term “bundling” has become a bit more prominent. A more traditional definition is “joining related services together and then selling them as more of a single unit.” As travel professionals, we work to make sure all the details coordinate together for our clients so they can have extraordinary travel experiences and not have to deal with unexpected issues.

Negative Effects of Unbundling – Higher Costs

Think about some of the services you purchase today. Do you pay extra, higher fees for those services if you purchase them separately? A quick example that comes to mind is insurance. Usually you get a discount if you use one insurance company to purchase your car insurance as well as home owner’s insurance policies.

When you don’t do that, it can result in paying higher fees – the unbundling of those purchases.

Unbundling by Airlines – Being “Nickel and Dimed to Death”

A perfect example of people getting “nickel and dimed to death” involves the airline industry. Today the majority of airlines today have extra charges when it comes to checked bags. It’s not the exception, it’s the norm. And there’s no bundling.

Charging people for their checked bags started to occur in 2008. Fuel prices started to soar so many of the airlines began adding a checked bag surcharge. It was supposedly an effort to combat the rising cost of fuel, but when the fuel prices decreased, airlines didn’t change their policies. The one exception has been Southwest Airlines, who lets their fliers check two free bags.

Not only are people charged for checked bags, but they’re also charged for meals. That’s now the norm, not the exception. And it’s something today’s fliers have become accustomed to.

As a result, the flying experience is one of being a transport service, to get from point A to point B. And it’s usually not fun.

Who are the end winners? The airlines, of course. With all the ancillary fees involved, airlines are making millions of dollars and have recorded record-breaking profits.

Ken Muskat

Ken Muskat, Executive Vice-President, MSC Cruises USA

When the new era of cruising began back in the late 1970’s and early 1980’s, cruise guests had to pay for drinks via cash as well as other amenities while onboard. Over the years, changes in the cruising experience have occurred with more options and choices. We’ve seen drink packages along with dining ones being added.

An area that MSC Cruises really pioneered has been bundling amenities. In 2014, with the launch of their innovative pricing structure, MSC Cruises created four different levels of inclusiveness. Ken Muskat, Executive Vice-President, Sales, PR & Guest Services, MSC Cruises USA, Inc. has seen the value of bundling through providing options of a more inclusive experience.

When I asked Ken Muskat what the reason was behind this move, he explained, “MSC Cruises launched Inclusive Experiences with the goal of providing consumers more flexibility and choice in planning their cruise vacation, as well as making it easier for travel agents to sell and market us. Consumers preferences vary greatly, with some guests wanting to pay upfront for the cruise only and others seeking all-inclusive vacation experiences where all the services and activities they want can be paid for in one bundled package. MSC Cruises Inclusive Experiences structure allows consumers to choose a vacation package based on their own personal preferences and the specific extra amenities that they desire.”

Positive Responses with MSC Cruises’ Inclusive Experiences

Ken and I then talked a bit more on how the feedback and responses have been since MSC Cruises began offering their inclusive packages for the past two years.

Ken mentioned, “Feedback has been very positive. Guests like having options and that they are getting more value for their money.”

He then continued, “Given the success of our bundling pricing structure, we just added a new inclusive experience – the wellness experience powered by Technogym. The wellness experience is designed for health-conscious individuals and is a complete 360-degree customized health and wellness program that begins with a pre-cruise questionnaire and includes a range of exclusive privileges such as workout gear and sport drinks in the stateroom, experienced trainers, best-in class fitness equipment, next-generation technology, exclusive shore excursions, and dedicated health and wellness dining options.

Ken’s Insights for Travel Professionals

As far as the positives behind these levels of inclusive packages that travel professionals should be aware of, Ken provided more and noted, “A huge benefit of MSC Cruises’ pricing structure is that we offer something for everyone. That means a travel agent is able to suggest an experience that is truly tailored to their client’s vacation desires and their budget. In addition, consumers are getting more value for their money and we’ve improved customer satisfaction as guests have more opportunity to customize their vacation experience based on their own personal desires.”

As far as thoughts on how travel professionals should think about leveraging this bundling and inclusive package option to successfully grow their businesses, Ken provided some additional insights. He said, Travel agents receive commission based on the cost of the package chosen. Therefore, once travel agents have qualified their clients, MSC Cruises’ unique pricing model means increased profitability as travel agents have the chance to upsell their clients, resulting in higher commissions for them.”

The Bundling Recipe

When dining out, do you order everything separately or do you like it when the restaurant might actually have a salad or soup included with your main entrée? Or when’s the last time you ordered a steak and it came with nothing else?

Think again. A steak alone is just one part of the dining experience. As travel professionals, by providing those additional options that complement our clients’ travel experiences, we are bundling things together. But it’s also in a very positive, customized way and that’s where we excel.

Cindy Bertram has  15+ years of cruise and travel industry expertise in marketing, sales, training, diverse content creation, as well as areas of social media, including blogging. She handles projects through her own company, Cindy’s Inside Cruise and Travel Track, LCC, in addition to working in small business consulting. A diverse writer who’s nationally published, Cindy has presented workshops at travel and cruise conferences, along with being the opening speaker for PR NEWS’ Writing Boot Camp Chicago November 2014. Passionate about having a positive impact, her short story, “A Cruise and a Promise,” was included in Chicken Soup for the Traveler’s Soul (published 2002.)    She can be reached at cindybert@att.net  

 

 

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