ith transparent pricing, competition
on the Web is sometimes called a "race to the bottom," as in the
rock-bottom price. As the airlines were among the first to
discover, it's not a race you necessarily want to win. Now it seems
that some travel suppliers are looking for ways to opt out of the
Responding to retailer demands for a "level playing field,"
Carnival a few months ago vowed not to give particular sales
outlets better rates than others.
To wean the traveling public away from discount Web sites,
hoteliers have begun offering rate guarantees.
Most recently, Marriott put the word out to consumers that they
shouldn't expect to find lower rates than the published rates
available through the company or through travel agents using
traditional GDS technology.
Tauck World Discovery took a different approach, advising
retailers, online and off, not to promote Tauck products at
discount prices. Under Tauck's new policy for 2004, retailers can
still offer discounts, up to a point, but they cannot promise a
discounted price in advertising or promotional messages.
Now Oceania, a one-ship cruise line that's just getting its sea
legs, has adopted a similar policy.
And why not? After a prolonged period of sluggish sales owing to
the economy, terrorism, war, SARS and what-have-you, everybody in
this business is looking for demand to catch up with supply so that
prices can rise, so that margins can improve, so that profits will
increase and growth resume. You hear it across the board from
airlines, from hotels, from car rental firms and tour operators --
even from the most profitable cruise lines.
Of course, it's always a challenge to maintain "price integrity"
in the unwieldy bazaar that our multichanneled distribution system
has become. What makes it so critically important today is that for
the past two years, too many people in this business have been
preoccupied with cutting costs, cutting corners, cutting staff,
cutting prices, racing to the bottom.
Maybe it's time for things, even prices, to be trending upward
for a change.
• • •
gainst this backdrop, it's
refreshing to hear from America West that it wants more travel
agency business, and is willing to do something to garner it.
Imagine: A U.S. airline is actually investing in technology that
will enable it to increase the amount of business it gets from
Not only that, the airline is willing to compensate agents for
taking the trouble to deliver business in a way that enables the
airline to avoid the cost of the GDS.
As we report in our news pages today, America West intends to
put these ideas into practice with a beta-test in February, having
consulted with ASTA and with individual agents about how to do it
This is not a new idea, but it's a good one. It apparently works
at AirTran and at a few other airlines.
It's nice to see a good idea catching on.