What is dynamic packaging?
Put simply, dynamic packaging is travel industry jargon for a
cheaper and more flexible way of booking a holiday. In terms
of the customer/consumer, the premise is that dynamic packaging
mimics the experience of visiting a travel agent and negotiating
a deal the consumer wants.
In terms of the agent dynamic packaging allows them to package their own
holidays and make better margins, whilst still offering a competitive
price compared to their direct competitors. That said, you'll rarely see
the phrase on a web site. Sites have adopted rather more straightforward
descriptions of the technology other then dynamic packaging such as: Book Together and Save, Build Your
Own or Flight + Hotel, etc.
Apply
mark-ups/discounts to individual products
Choose
which suppliers to use
Add
brochure content and resort information
All
products are completely live bookable
Search
all products
simultaneously
Today most suppliers are seeking new ways to move their inventory and
gain market share without competing one-to-one on price. Dynamic
packaging introduces the ability to obtain hidden discounts, enhanced
marketing and merchandising to communicate consumer benefit of purchasing
in this new way.
The major benefit of Dynamic Packaging for agents is to limit,
if not eliminate, pricing transparency for the abundance of individual
travel components. Dynamic packaging can also act as a tool to
re-establish brand as a decision factor for consumer via their
online distribution strategy.
How does it work?
The user of the site (customer) stipulates the place and dates they
want to travel, just as they would when searching for a normal package
holiday. But instead of proposing the usual selection of fixed packages,
the web site offers a choice of flights and hotels at different prices.
Once the customer has settled on the right combination, dynamic packaging
allow the travel company to try and sell car rental, or even an insurance
policy and other add-ons such as city tours, travel extras, airport,
parking or room upgrades. Water sports lessons, ski gear, lift passes,
theme park and museum tickets are all likely to become available as dynamic
packaging grows more popular.
What's the advantage?
The customer and travel company are not restricted to a set package with compulsory departure dates. And the customer is likely to benefit from the lower fares which scheduled airlines are prepared to offer as part of a package, but not when sold alone. These are know as Inclusive Tour rates and usually undercut the published fare by 10-25%.
