BookingData
BookingData creates third-party ancillary offers for airline passengers based on a number of factors including traveler profile, travel dates and length of stay.
Founded in 2020, the company is currently implementing its technology with Eurowings and SunExpress and also plans to begin work with Norwegian.
What is your 30-second pitch to investors?
Airlines have always actively retailed first-party ancillaries (extra luggage, upgrade in business, etc.) delivered by the airline itself, while third-party ancillaries (hotels, car rentals, etc.) have always been just a link at the bottom of the page with a less than 0.3% conversion. Yet passengers spend more on hotels and car rentals than flights.
Airlines know everything about the profile and the travel pattern of their passengers and have the option to communicate with them. Airlines can capitalize on those features by using BookingData to enable tailored private offers directly from ancillary partners to passengers. This personalized and targeted approach boosts their conversion, hence their commissions, with no associated liability, as transactions are executed on the partner's website.
Describe both the business and technology aspects of your startup.
Business: BookingData is changing the dynamic - airlines let the third-party ancillary provider select the various profiles it wants to make a private offer to through the BookingData platform, where the offer is created. The offer is then presented to the passenger via the airline communication channel, and the offer contains a deep link directly to the third-party ancillary partner with the passenger’s travel pattern already pre-filled.
On conversion the third-party ancillary provider pays a commission to the airline, and BookingData is taking a share of this commission. Third party ancillary providers can select profiles on multiple criteria: couples, families, business travelers, travel dates, length of stay, travel class, origin, destinations, etc.
Technical: BookingData receives the tickets with HOT files (files containing ticket information received from IATA Billing and Settlement Plan) for hub airlines or ODS (operating datastore from Navitaire) for Navitaire, with a process that has been audited by the Lufthansa group.
This data being readily available in airline systems, it makes the on-boarding very easy for airlines. The profile filtering and the offer creation is made on the BookingData platform. Offers are associated to discount codes, which are associated to the airline, making the leakage on this offer not possible.
On the hotel and car rental side, BookingData is using the path that their system uses to give travel agents preferred conditions and commissions with the agent code.
Give us your SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of the company.
- Strengths: Industry expertise - Using ticket data readily available in airline systems
- Weakness: Addressing the third-party ancillary sales conversion issue, and this issue has long deemed unsolvable by airlines, making the willingness to work on addressing it sometimes low.
- Opportunity: Airlines know much about the passengers and should be the channel of choice to retail hotels or car rentals, but yet the booking journey is currently broken after the flight purchase with customers starting a new booking journey for hotel and car rentals. Passengers will spend more on hotel and car rentals, where commission is around 10%, than on flights where operating profit is around 1 to 3 %. Hotels or car rentals are willing to send offers, but are currently not informed that someone is traveling, and they cannot communicate with them.
- Threats: - OTAs reaction (exclusivity, etc.)
What are the travel pain points you are trying to alleviate from both the customer and the industry perspective?
- Passengers: Travelers are in need of hotels and car rentals (and e-sim card data, etc.), and will shop for it. All the OTA channels are offering a wide range of offers, but price are public prices that are the same as if you go to the hotel or car rental website. Through BookingData, passengers will receive from the airline one or two offers with prices that are better than public price, making them rather attractive!
- Hotel and car rentals: hotels (or car rentals etc.) are willing to send offers, but are currently not informed that someone is traveling, and they cannot communicate with them. The airline channel through BookingData is very interesting as passengers are qualified, they have a ticket in hand, the audience can be selected - meaning the offers are only carried out to profiles that are selected (ideal for discounts or inventory offloading) and the booking is performed on the hotel own website, making a hotel customer and not an OTA customer, with all the opportunity to build loyalty.
- Airlines: Hotels and car rentals will get as much revenue from the airline passengers as the airline on flight tickets. Even if we consider that 50% are in need of a hotel, there is more money to make out of 10% commission on hotel and car rentals, than on 1 to 3% profit margin on a ticket. Flights somehow could be the “loss leader” to retail ancillary “the breadwinner.” Their current setting with an OTA link however does not deliver, making third-party ancillaries a minimal revenue stream, with a conversion of less than 0.3%.
- Platform: Hotels don’t care which airline carries the passenger to destination, and airlines don’t care which hotel carries the deal that converts. This situation makes a neutral platform in the middle the ideal partner. Hotels want to have all the airlines on one platform, airlines want all the hotels in one platform.
So you've got the product, now how will you get lots of customers?
On the passenger side, there is always a demand for private offers, scrolling the web to find deals. On the supplier side, hotels and car rentals, the frustration of not being able to actively retail to travelers is big, hence the willingness to work with BookingData is immense. To mention a few: Best Western, Accor, Avis, Sixt, Mandarin Oriental, Scandic, Thon hotels, Strawberry (Nordic choice), etc.
On the airline side, or frequent flyer side, there is a strong resignation that they are not successful at selling 3rd party ancillaries, and that they are better off with a link to an OTA, that brings very little revenue, but with little to no effort.
The challenge that BookingData is facing is to be able to carry the message that with the very same little to no effort, they can be THE channel for private offers and thus make 3rd party ancillary revenues a significant revenue stream. But rather than having OTA inventory at public prices, they have direct offers from hotels and car rentals at off-market prices.
Tell us what process you've gone through to establish a genuine need for your company and the size of the addressable market.
Several airlines are already on-board with the data, such as Eurowings (ODS), SunExpress (HOT Files), and in discussion for the rest of the Lufthansa group and the Norwegian rewards program. The size of the market is massive. The vast majority of hotel chains or car rentals’ customers are flying to their destination.
Simply, the European hospitality business is more than €100 billion, and close to €500 billion worldwide. More than 50% are flying to those hotels, and commissions are 10% for airlines, BookingData takes a share of it. Meaning that the total addressable market for BookingData just in Europe is more than €1 billion.
How and when will you make money?
BookingData is success based, taking a commission on the commission paid by the third-party ancillary provider. We are half-way through the implementation for Eurowings and SunExpress, meaning that the data is delivered to BookingData, however the process of carrying out the offers via email is still in implementation.
Once the offers are out we are will make money. Our model is not to charge airlines or the third-party supplier for implementation but to take a revenue share - but it is free to try on both sides with no commitment. The Norwegian reward implementation is planned for beginning of Q4.
What are the backgrounds and previous achievements of the founding team?
The team background is Amadeus and airlines. The CTO is an ex-Amadeus (hotel and travel intelligence team), the CPO is an ex-Amadeus and ex-Lufthansa, and the CEO is ex-Amadeus (19 years - travel intelligence team).
How have you addressed diversity and inclusion in your business?
Founders are from various backgrounds (North Africa, Asia and Europe), so it is in our DNA from the start, and it will be considered while scaling too!
What's been the most difficult part of founding the business so far?
Overcoming the resignation that airlines/frequent flyer programs have over third-party ancillaries being a marginal revenue stream and concentrate on addressing the issue.
Generally, travel startups face a fairly tough time making an impact - so why are you going to be one of lucky ones?
Traveler volume is back and they are fishing more than ever for deals so the demand is there. Third-party ancillaries, in most airlines, are just a link to an OTA, meaning there is not really a workforce behind it. BookingData can thrive in this environment as everything is handled on our platform, and airlines just carry the offer via email as a pure marketing advertising. Meaning that airlines can just let us turn around their third-party ancillaries conversion issue, while having no financial investment (no upfront cost for using BookingData) and extremely limited workforce investment. On top of it there is no reputation risk as offers come directly from reputable partners such as Best Western, Avis, SIXT, etc.
A year from now, what state do you think your startup will be in?
We aim at having implemented a couple of middle size airlines in order to prove the conversion to mastodon airlines.
What is your end-game? (Going public, acquisition, growing and staying private, etc.)
We honestly currently look at creating the best product that answers the need of airlines, third-party ancillary suppliers and to passengers. Genuinely acting this way is the way to open your options in the future.
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