1. Ancillary Revenue Commission based solutions for DMOs February 2011

2. Ancillary revenue

3. Hot item for airlines Airline Ancillary Revenue as % of total revenue 2009 Allegiant Spirit Ryannair easyJet Tiger Airways Jet2.com Air Lingus 29.2% 23.9% 22.2% 19.4% 18.1% 14.4% Top 5 airlines ancillary revenue – Euros per passenger 20092008 € 20.00 € 17.14 € 14.97 € 14.75 € 14.28 Allegiant United Aer Lingus American Jet2.com € 9.95 € 9.55 € 8.52 € 7.35 € 7.17 Allegiant Vueling Ryannair Aer Lingus LTU Source: IdeaWorks Airline Ancillary Revenue 2009 United American Delta Qantas Ryanair easyJet US Airways € 1,527,310,000 € 1,507,750,000 € 1,117,120,500 € 782,903,000 € 663,600,000 € 608,796,693 € 540,589,500

4. Ancillary revenue & hotels  Cross selling / upselling –Spa, Golf, sea sports, kids clubs, dinners, wine tastings etc.  Commission –sightseeing, tickets for events, concerts, theatre etc.  Media

5. Ancillary revenue & hotels

6. Process of buying travel Dreaming Enthusing Selecting Planning Comparing Reviewing Booking Travelling Visiting Enjoying Recommending Evaluating 2/3 weeks up to 3 months

7. Process of buying travel Dreaming Enthusing Selecting Planning Comparing Reviewing Booking Travelling Visiting Enjoying Recommending Evaluating Hotels Airline Up to several months Car rental Up to one month Sightseeing Dinner reservations When do people book:

8. Process of buying travel Dreaming Enthusing Selecting Planning Comparing Reviewing Booking Travelling Visiting Enjoying Recommending Evaluating DMO Core Business

9. Process of buying travel Dreaming Enthusing Selecting Planning Comparing Reviewing Booking Travelling Visiting Enjoying Recommending Evaluating DMO Full range

10. Process of buying travel Dreaming Enthusing Selecting Planning Comparing Reviewing Booking Travelling Visiting Enjoying Recommending Evaluating DMO Full range Airlines

11. Process of buying travel Dreaming Enthusing Selecting Planning Comparing Reviewing Booking Travelling Visiting Enjoying Recommending Evaluating Airlines Conversion rate for third party products between 0.5% and 3% DMO Full range

12. Travel search: the DMO site In general, how useful are the following types of web sites for researching a possible vacation destination? Rate each web site using a 5 point scale Source: PhoCusWright 2009

13. Why the DMO site?  Independent  Lot’s of quality content which –is searchable (text, images, videos, blogs etc.) –keeps the (online) conversation going  Closest to suppliers, the setting and the place  Trustworthy  They are official

14. DMOs: why online booking systems?  Good position to ‘close the deal’  Market failure  Measure the effectiveness of your marketing  Market intelligence  Dynamic Packaging

15. DMOs: why cautious with online booking systems?  Provide information, not to make bookings  No commercial culture  Competition  Legal restrictions  Commercial message may disturb the general message  Commercial income? Cuts in public funding

16. DMOs: sources of income  Fees on sales of bookings  Merchandise shop  Affiliation programmes  Advertisements –Context sensitive Ads  Advertorials that look like editorials  Through newsletters by including some editorial  Sell enhanced entries to tourism suppliers

17. Ecommerce & DMOs: lessons learnt  Visitbritain –Englandnet established in 2002: the national tourism database –2004: formal complaint for illegal state aid and unfair competition; –Englandnet was wrapped up and integrated into visitbritain; –Today they do not handle financial transactions or visitor’s personal and financial details  Visitscotland –Established as a PPP in 2002 -> today public again; –it did not promote all accommodation providers; –overestimated industry’s appetite for online booking systems; –High number of visitors, low conversion –High cost leading to negative own capital –Web site: www.reclaimvs.com –Too optimistic business plan

18. Examples

19. Visitbritain

21. Visitbritainshop

23. Visitnorway (Q1 2011) / Visitsweden (online) The National Booking Switch Property Extranet to DMS Property PMS direct connect Hotel group Sub headline Hotel group Sub headline Flight Low cost carrier Flight Regular flight Ferry Events Sub headline Activities Sub headline Amadeus Flight Train iTicket rezView CRS Norwegian Travel Swith And National Booking Visitnorway.com 10 million visitor White label Regional DMO Local vendor API (DMO, Supplier) PMS Direct DMS Dest system DMS Dest system DMS Dest system Amadeus Ferry & train OpenJaw Ferry & train CRS Synxis, Rezidor, Pegasus RezView Pegasus Switch

27. Visitnorway: search control examples

28. Visitfinland

29. DMOs in the Mediterranean

30. Spain.info Hotel guide

31. Spain.info Hotel guide

32. Spain.info and start all over…

33. Spain.info second window opens…

34. Spain.info

35. After clicking “book” third window opens…

36. Spain.info and then the booking page opens in Spanish…

37. Visitcyprus

38. Goturkey.com - English

39. Goturkey.com - Flights & Packages lead to Lovelyturkey - Hotel leads to watchb4go.com

40. Enit.it / italia.it

46. Visitportugal.com

47. Visitgreece.gr

48. FranceGuide

50. You do not see yet at which provider you are going to book…

51. FranceGuide

52. Business models – DMOs & hotel suppliers Metasearch (list of prices) Consumer Supplier A Supplier B Supplier C Supplier D Booking NTO domain Supplier A Supplier B Supplier C Supplier D Visitbritain determines suppliers and establishes the link Visitbritain Contract Metasearch (one price) Consumer Booking NTO domain Viamichelin Supplier A Supplier B Supplier C Supplier D Franceguide Supplier A Supplier B Supplier C Supplier D Contract

53. Business models – DMOs & hotel suppliers Travel switch of technical provider Consumer Contract NTO domain Supplier A Supplier B Supplier C Supplier D Any supplier that uses the Platform of the provider, Subject to certain conditions Visitsweden Booking Supplier A Supplier B Supplier C Supplier D NTO domain Supplier A Supplier B Supplier C Supplier D extranet Visitcyprus DB Search Booking at private party Consumer Supplier A Supplier B Supplier C Supplier D Contract

54. Business models – DMOs & hotel suppliers Consumer NTO domain Supplier A Supplier B Supplier C Supplier D KLM Private Commercial partner (ISEATZ) Search Booking Contract ISEATZ determines suppliers and establishes the link Consumer Supplier A Supplier B Supplier C Supplier D Contract NTO domain Supplier A Supplier B Supplier C Supplier D Visitfinland determines suppliers and establishes the link Visitfinland Supplier A Supplier B Supplier C Supplier D extranet DB Travelplanner Booking is recorded in the travel planner Booking Meta search

55. CSF for implementing third party, commission based products  Credibility, awareness and trust  Customers knowledge...  …and offer what they really need…  …and when they need it  Promote full offering  Choice  Easy access / simple procedures  Feed sales data back into your system  Measure!  Attractive prices

56. Thank you