Hotel + Flight to Tenerife: the success case

For years, the hotel sector has focused its business strategy on internal variables: pricing, distribution, direct channel or customer experience. However, and especially in holiday destinations such as Tenerife, there is a factor that decisively conditions demand and conversion, and that remains outside many strategies: flight. 

This was the basis of the reflection I shared in TecnoHotel OnTour Tenerife. It is not just a question of integrating a dynamic package functionality, but of understanding that the customer does not separate the hotel from the way to get to it. What it really assesses is the total cost of the trip and its viability. Ignoring that reality means working with a partial view of the market. 

The case of Tenerife makes it possible to demonstrate it with specific data. 

In the last 12 months, the Hotel + Flight in Tenerife has generated more than 465,000 searches and about 4,700 reserves, with a conversion of 0.98% and a total production of 15.7 million euros. In addition, the flight represents approximately 25% of the total value of the package. Beyond volume, the relevant is the amount of information that is obtained even from users who do not convert, which in a hotel website is usually the vast majority. 

From here on, the analysis is structured on three levels of knowledge: descriptive, predictive and prescriptive. 

Descriptive knowledge: understanding what is going on 

The first level is descriptive knowledge: to analyze what has happened and why. 

A particularly relevant fact in Tenerife is that 44% of the reserves are concentrated in the two months before arrival. A priori, this could be interpreted as a last minute trend. However, when it is crossed with the evolution of the flight price, the reading changes: on many routes, the behavior is directly conditioned by the lower air fares in recent months. 

It also changes the way markets are understood. The British market, which represents a key part of the destination, is not homogeneous. There are significant differences between regions and airports. For example, very different behaviour has been identified between Dublin, Manchester or East Midlands, where a fall in the flight price of 27% led to conversion increases close to 70%. 

This level of analysis allows you to abandon traditional segmentation by country and start working with a much closer logic to the customer's operational reality. 

Predictive knowledge: anticipating demand 

The next level is to understand what's going to happen. To this end, it is key to monitor the air inventory: available places, operational changes and price developments. 

When analysing the evolution of the flight price against conversion, the relationship is clear: when the price rises, the conversion goes down; when the price goes down, the demand reacts. 

But the relevant thing is how this relationship impacts on planning. 

In future analysis, for example, there are significant differences between months: 

  • October presents average flight prices around 565 € per person, with less conversion. 
  • November goes down to approximately 308 €, generating a clear improvement in demand. 
  • In specific routes such as Luton, price falls of up to 62% are detected, with direct impact on conversion. 

This introduces a new logic: not every month and not every market must work the same. Attempting to push demand in periods where flight is expensive or low reduces commercial efficiency. 

Receptive knowledge: converting data into action  

The third level is the most relevant: how to convert these data into actions that turn. 

 

This is where the analysis ceases to be informative to become operational. In Maarlab we have created a solution that allows the hotel to anticipate air demand. 

It's called Oceanlights Marketing. A portal that allows the hotel to access all the knowledge of the air ecosystem in real time that is materialized in an Opportunities Report and in the Dynamic Widgets: 

  • The report, which is shown in the screenshot, is based on a predictive algorithm of air demand that analyses the behaviour of the routes by destination and origin to determine on a heat map the hottest points. 
  • The Dynamic Widgets are intelligent modules that are directly integrated into the hotel's website and show a Hotel + Flight offer in a custom way according to the customer's IP that when you click it sends you directly to the quote.

A strategic issue for the hotel sector 

In Tenerife, where almost 100% of customers arrive by plane, air connectivity is no longer a factor. It's the basis of the business. 

But this is not limited to island destinations. The entire hotel sector is conditioned on flight, to a greater or lesser extent. According to the Observatori del Turisme to Barcelona, in the case of Barcelona, 85% of the guests who visit the hotels of this city arrive by air. 

If the hotel does not incorporate this variable into its strategy, it loses the capacity to influence demand and increases its dependence on third parties that are using it as a commercial lever. 

So, beyond the sale of packages, integrating the flight is a matter of knowledge and competitiveness. It's a business issue. 

 

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