Airlines

Can Ryanair become the Amazon of Travel?

The Amazon of Travel might be equal parts Airbnb and a leading airline like Ryanair - with a dash of Google for good measure.

Speaking to a room mostly of men, partly engaged and partly looking around the room to see who they should network on the next coffee break - Kenny Jacobs, Ryanair’s Head of Marketing reiterated an aspiration for the Irish airline to become the Amazon of Travel.

A member of the audience asked Mr Jacobs to clarify his understanding of Amazon as it might differ from his view.

Amazon, as their yearly revenue would suggest, are a beloved brand that do many things well. Ryanair are Europe’s leading Low-cost carrier with a mixed history with its customers and an unpredictable CEO (read Is Michael O'Leary the Donald Trump of the Travel Industry?).

Hence, the need for a clarification.

Mr. Jacobs spoke of Amazon as the brand synonymous with online retail. In an effort to become the online aggregator for the travel industry, he revealed Ryanair’s goal of increasing revenue from ancillary retail from 20% to 30% in coming years. And, speaking at the Goodbody Travel and Digital conference in December 2016, Mr Jacobs said in the next year customers would most likely be able to buy other branded flights from Ryanair’s site.

What about Google and Airbnb?

Google and Airbnb are making plays to own more of the customer journey with their recent travel apps. However, the shift for Ryanair might be more fundamental, from supplier to marketplace: a space where both supplier and customer recognise the perceived value of participation.

It’s hard to imagine why other brands would want to participate in a metasearch organised by a competitor. Alternatively, if Ryanair create a powerful enough travel eco-system around their brand, other airlines might not have a choice but to participate.

It's questionable if a Ryanair business model solely dominated by price points has the inherent flexibility to earn the loyalty of a broad and diverse customer-base like Amazon.

To become the Amazon of Travel, Ryanair or any ambitious travel brand must:

1) Broaden their product beyond commodity status with added value

2) Reimagine travel as a holistic experience

3) Understand the values of the next generation of traveler and guide them to the best experience.

Beyond Commodity Status

How a customer evaluates a product is by weighing the perceived value against the asking price. Ryanair and the airline industry as a whole have largely focused on the price side of the equation as it is quantifiable, whereas added value is psychological, amorphous and difficult to estimate ROI - thus it is often overlooked.

In September 2016, Harvard Business Review published research by Bain and Company on how to measure the added value, and how a combination of different value elements is directly reflected in revenue, growth and customer loyalty.

If it cannot be measured, it does not exist. - attributed to Robert McNamara

Value has entered a quantifiable and utilitarian domain; it can no longer be relegated to some fuzzy notion for the creative type, but rather, adding value is an innovative strategy and consequently the building blocks of the Amazon brand.

Travel as a Holistic Experience

The customer journey in travel requires commitment in a way that retail does not. Amazon ranks highly for 8 elements of value in online retail. The scope for added value in the traveler's journey has more potential as there are far more touch points.

The Ryanair app executes flights and some key ancillaries flawlessly. But flights and ancillaries are only part of a trip. The average trip is supported by a broader suite of products provided by a variety of suppliers with patchy integration at best. The reward for any brand to gather the supply of these products into one place is obvious, but how might an airline - Ryanair or other - go beyond the air strip and guide travelers through luggage collection right into the destination?

Becoming the Guide

Travel is statistically the biggest yearly purchase, and with this generation poised to spend more on travel than proceeding generations, it makes fiscal sense to build the core competency of a brand based on the values of these customers.

A travel brand is very different from a sporting brand. In sports, we the customer, see ourselves in our heroes. So, having Messi, Ronaldo, Federer or the original Michael Jordan front and centre benefits the brand, because it inspires the customer to try and achieve what - for most of us - is genetically impossible.

In travel, the traveler is the hero - ask any Millennial. This digital savvy generation seeks the best information or guidance to achieve that heroic experience. Airlines are not the hero, but they have an opportunity to become the trusted guide.

The Hero

Part of the brilliance of Amazon is when the customer stares full faced into the brand they see their own reflection, the reflection of the person they want to be. When the same customer looks into Ryanair they see Michael O'Leary.

O'Leary’s bravado and business acumen have largely contributed to the rise of Ryanair, but this is a new season with a far-reaching vision. The days of consolidating a customer base around the personal brand of a CEO are short sighted.

Travel is not a one-size-fits-all industry, therefore a commodity brand airline will not become the go-to marketplace for travel. Airlines must first recognise the autonomy of the traveler to provide the unique experience they are seeking.

Why We Travel

We consume the experience a product provides, not the product itself. We are not so much judged by the car we drive, but rather the experiences we have accrued and have the selfie to prove it. A large portion of today’s travelers identify as explorers, seeking authentic experience and sharing those experiences with each other. The opportunity for airlines is one of curating the experience to match the interests of the traveler.

Airlines should approach travel from the primary experience a traveler is seeking. Airbnb do a great job of this. They are the leading third party accommodation provider and yet their copy is about neighbourhood vibes, unique experiences, community and connection. Ryanair could learn from this approach. Conversely, Airbnb could benefit from a dose of Ryanair’s pragmatism to scaling a product, not to mention, access to their fleet.

If one were to combine Ryanair and Airbnb we might have something that resembles the Amazon of Travel. In lieu of this never happening, the first to add the other’s value proposition to their core competency will emerge as a go-to marketplace for travel. #RyanAirbnb

Still, for Ryanair, the greatest obstacle to becoming the Amazon of Travel is their culture of commodity. To date, it has been a winning strategy to quickly penetrate the market, but it will hinder them in becoming the brand synonymous with travel.

The Amazon of Travel might be equal parts Airbnb and a leading airline like Ryanair -  with a dash of Google for good measure. 

Or, the Amazon of Travel might just be Amazon.

. . .
LikeWhere use award winning software and a global community of local writers to add authentic content and context to a travel brand’s marketing: Positioning travel brands as the guide to the next generation of traveller.
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