Business

Airlines seek to boost bookings by pulling data from travel sites

A Delta plane lands at the Seattle-Tacoma International Airport, May 27, 2015. Delta Air Lines has pulled fare information from TripAdvisor and a number of European online travel agencies, saying that they did not have permission to use its data, leaving consumers on the hunt for the lowest fare has become more difficult as the number of places where they can comparison-shop has dropped.
A Delta plane lands at the Seattle-Tacoma International Airport, May 27, 2015. Delta Air Lines has pulled fare information from TripAdvisor and a number of European online travel agencies, saying that they did not have permission to use its data, leaving consumers on the hunt for the lowest fare has become more difficult as the number of places where they can comparison-shop has dropped. NYT

When Josh Marion had to book a last-minute business trip to New York, he knew the plane ticket wouldn’t be cheap.

A loyal Delta flier, he went to TripAdvisor, which lists flights from many airlines, to compare Delta’s price against those of its rivals. He hit a wall. “The fare wasn’t even there,” he said.

Indeed, Delta pulled that information from TripAdvisor last year. It did the same for a number of European online travel agencies this year, saying the agencies did not have permission to use its data.

This is just what Delta would like to see more of, experts say. Airlines are increasingly pushing and prodding travelers to book flights through their own websites, where they can sell more services like in-flight entertainment and add-ons like hotel reservations. They also bypass paying a commission to websites that book plane tickets.

For consumers, this means the hunt for the lowest fare has become more difficult as the number of places where they can comparison-shop has dropped. In many cases, they just give up.

Already, travelers typically use three or four sites when shopping for a flight, according to Phocuswright, a travel market research firm. “The number goes up for your more price-sensitive travelers,” said Douglas Quinby, vice president for research.

“Consumers are going to go to the price-comparison sites and thinking they’re comparing prices, but they’re not,” said Fiona Scott Morton, an economics professor at Yale University, who conducted a study for the Travel Technology Association, a trade group representing air travel sites, asserting that the airlines hurt competition when they cut independent distributors out of the loop.

Experts say airlines’ evolving distribution strategy is another outgrowth of a consolidated airline industry, where customers now face additional charges for just about everything except using the bathroom.

Lufthansa recently took an even more extreme step when it announced that starting in September it would charge passengers roughly $18 for the option of booking plane tickets through third-party sites. To avoid the fee, passengers must book the ticket through Lufthansa-owned channels.

The company said Lufthansa was just ensuring that customers pay for only the services they want. “More customized services will better reflect customers’ preferences,” said Juergen Siebenrock, a Lufthansa vice president.

Tug of war

As recently as a few years ago, that would have been hard to imagine. Only one prominent carrier, Southwest Airlines, has booked tickets predominantly through its own site. But that could change if other carriers see an appeal to Lufthansa’s strategy.

The airlines say they still offer travelers plenty of ways to shop and that their fare and schedule information is still available on the big online agency and comparison sites like Expedia and Kayak.

Delta, for one, is unapologetic.

“Delta reserves the right to determine who it does business with and where and how its content is displayed,” a company spokesman said in an email, adding that the carrier continued to work with a limited number of online partners.

Both sides in this tug of war have a case to make.

“The airlines absolutely want fliers as much as possible to come to their own website,” Quinby said

There are two financial advantages: Airlines want to be able to offer their own fare packages, bundles and add-ons like extra legroom and in-flight entertainment.

“The more that the airlines can get the fliers to book on their own sites, the more opportunity the airlines have to engage with those travelers,” Quinby said.

In the industry, that is called the upsell. “Where a significant portion of Delta’s profits come from is ancillaries after you buy the basic transportation,” said Max Rayner, a partner at Hudson Crossing, a travel industry consulting company. “That’s one big reason for Delta to be hellbent on denying access.”

Last quarter, for example, Delta’s extra revenue from everything from baggage fees to merchandising rose 27 percent – an extra $50 million.

Luring customers

Airlines also want to avoid paying fees of around $5 to $12 a ticket when fliers make third-party bookings. Lufthansa said its new fee was being levied only on booking channels where the carrier’s costs have gone up.

The third-party players, for their part, want to present a transparent website that lets travelers make an apples-to-apples comparison on flights. At some websites, airlines are a loss leader. The sites make money by earning commissions from hotel bookings, but the flights help lure the customer in the first place.

“The travel search funnel often begins with a traveler saying, ‘Can I get there?’ ” Rayner said.

If it’s too difficult for travelers to figure that out, they will relent and go directly to their preferred airline’s website, said Bryan Saltzburg, general manager of TripAdvisor Flights.

For Marion, the hassle of searching for the lowest fare ultimately proved too much. “I ended up booking it through Delta’s website,” he said. “I did pretty much exactly what Delta wanted me to do.”

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