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Travel never sleeps. If the past few years have taught us anything, it’s that nothing remains the same for long. Technologies change, traveller expectations evolve, and trends come as quickly as they go.
One such area of transformation has been the dynamic packaging market. Today, the European sector is valued at €9 billion[1]
annually and is growing at rates up to a fifth faster than the rest of the travel market in the region. Indeed, the dynamic packaging market is expected to be worth €15 billion by 2026.
We began to shift our focus to a dynamic packing model a decade ago and have seen the strategy pay dividends in recent years. Travellers have come to value our ability to leverage technology to simplify, personalize and enhance the travel experience
But, before we go further, let’s explore what we mean when we talk about dynamic packaging.
Dynamic packaging
In short, a dynamic packaging solution means lastminute.com can create the right proposal for each traveller, in real-time. lastminute.com combines 440 airlines with 2.1 million hotels examining trillions of combinations to offer our customers exactly what they need for the specific destination and dates they are looking for.
Over the past five years, Amadeus has been a great partner in the creation of this offering, as we work to refine the technology together. It utilizes a cache-based system, one which delivers search results in milliseconds, allowing lastminute.com to drive higher booking volumes as travellers see what they are looking for, right away.
Our sales of dynamically packaged products increased by 60 per cent in 2022, with further gains expected.
Benefits for the traveller
The benefits of dynamic packaging for the passenger are clear. These deals often provide a price advantage, meaning lastminute.com can ensure our packages are often cheaper than if a traveller books a flight and hotel separately, as we can offer consumers dedicated exclusive rates.
Created alongside Amadeus, our dynamic pricing engine also provides impressive flexibility when it comes to combinations of flights and hotels for each destination. The wide range of content in our system means we can create the most personalized solution and present it in a simple way. Indeed, lastminute.com is today able to offer dynamic packages in more than 30 markets across Europe.
lastminute.com compares and mixes travel options from different providers and delivers great value holiday packages to millions of customers across Europe. In addition, the OTA inventory of travel options also includes alternatives such as trains and buses, thus offering customers even more travel choices.
A trip is also fully protected against changes by the travel provider, for example airlines cancellations, – we will always find alternatives as required. Finally, we can offer financial flexibility. Today, 40 per cent of our dynamic packages are sold with deferred payment solutions, usually offering a zero percent interest rate.
Evolving as partners
During our partnership, Amadeus has offered us the technology to make this evolution possible and we utilize a range of solutions from the travel tech leader.
We take air content from Amadeus, which offers us access to more than 400 full-service, and hybrid airlines, as well as the growing range of merchandising content that is available to tailor the journey.
Amadeus also provides lastminute.com with the technology we need to create seamless end-to-end experiences for the traveler. Amadeus Ticket Changer, for example, cuts the time our teams need to process changes to itineraries, while a virtual card payment solution, B2B Wallet, helps us optimize payments to suppliers, including low-cost and full-service carriers, through virtual cards. These solutions drive operational efficiency at lastminute.com.
Looking ahead
Today, 60 per cent of our revenues come from dynamic packaging. But we believe there is still more to be gained with better service and even lower prices.
Working alongside Amadeus, we are expanding our offering to allow us to grow into new markets and open new opportunities.
We believe Amadeus is the right partner to help us create even more personalised trips that meet the diverse needs of travellers.
[1]Source: All statistics from Euromonitor and estimates from lastminute.com Investor Relations presentation
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