One of the most important control to get on rates are the packages rates.
Traditionally those rates were created to build up dynamic packages online, mostly with a flight to compete with the traditional tour operators. What seem a good idea at the time, resulted in a very tricky situation for most distributors.
Packages rates are the cheapest by nature, they offer an additional discount so that when you add them to a flight, you can create an opaque package price, resulting more attractive to the customers and dissuading them to buy separately. Low cost carriers building up on that theory in the early 2000´s, envisioned a huge potential on dynamic packaging.
Well reality is different.
Most Online agencies are still struggling to distribute dynamic packages and if they do, little they count (maximum of 10%) of total sales. The multi-products sales are not really there yet.
Tour Operators on the other side, have their sales highly dependent on packages. So you would ask yourself, if both are sold using online websites, how can we explain the sales difference?
Well it all depends on the technology they use.
A true distributor of packages, need to create them in advance. Meaning they need to have the flight prices and the hotel prices to create the packages that will appear on the website. Well... most OTAs do not have access to those hotel prices in advance because of the technology they are using.
See our graph for more details or please insert questions in comments...
