Spirit Airlines: Buzzing from L.A. to Vegas for a Buck

The airlines have discovered a nifty way to really get the attention of consumers and competitors. Just yesterday, Spirit Airlines announced service from Los Angeles International (LAX) to Las Vegas McCarron (LAS) with introductory one-way fares of just $1.00 per seat, plus applicable taxes. While this bargain fare is heavily restricted to travel on certain days and flights, it is creating quite a buzz.

Spirit Airlines is one of few airlines that focus on leisure travel. By this, I mean they fly to very leisure oriented destinations such as Fort Lauderdale, Orlando, and Atlantic City. They have also been part of the pioneering group of airlines that started charging for everything from pillows to advance seating assignments. So why has Spirit Airlines not already targeted LAX to Vegas? So many competitors – both low cost and legacy carriers – already serve the market. They needed a bold way to introduce their brand and get attention in order to make the five daily flights a success.

The industry impact has been interesting. Some airlines like jetBlue and Allegiant Air did engage in a “fare war” while much larger Delta Air Lines and United Airlines did not. My guess is that much of the passenger traffic on Delta and United is connecting through LAX and therefore they feel the discounted fares would not help to gain market share.

While the $1.00 fare seems ridiculous, it is a proven sales tactic that generates traffic to Spirit’s website, talk in the industry, and gets the seats filled.

Advertisements

The Baby Boomers are Coming – Make sure you are ready!

The baby boomers are arriving at early retirement and those of us in the travel industry have been waiting patiently. This gigantic group of more than 76 million Americans have huge spending power: One estimate suggests that the baby boomer generation accounts for about 50% of all discretionary spending and about 80% of today’s leisure travel (data from http://www.thirdage.com). Keeping in mind the changing characteristics of the maturing adult, now is the time to make your adjust your brand image and product offering to meet their needs.

People approaching retirement today have become much more technology savvy than previous generations. If you advertise online, do not assume that a senior discount is the only way to draw attention to your brand. Incorporate pictures of seniors in graphics, create special web pages showcasing target products, and stay on top of online forums and groups where you can highlight your product and create an impact.

Senior citizens will continue to like packaged products. A hotel that works with a nearby restaurant to provide a special meal package allows both venues to increase sales…. Just be sure that your brands compliment each other! Value added travel experiences are not new but with the size of the upcoming retirement population, it is worth revamping your product image and cooperating with others to create an experience the mature consumer will enjoy.

If you are in the hospitality industry, make sure your interior and exterior lighting is good, stairs kept to a minimum, entertainment is age-appropriate, and product has the retirement crowd in mind. A great suggestion would be to contact a local senior citizen activity center and invite a few folks over to visit. Show them what you offer and ask for their thoughts.

In any case, get ready because the baby boomers are a big crowd with a big impact!

Delta Air Lines and the STAPLES Center – brand synergy!

Yesterday a press release was issued about how Delta Air Lines has entered an agreement with AEG to become the official airline of the STAPLES Center in Los Angeles, official airline of the L.A. Kings, official partner of The GRAMMY Museum at L.A. Live, and will have rights to marketing in the L.A. Live complex. Whew! That is quite a mouthful of information for a one press release! What I find most interesting, though, is the impact of branding a brand like Delta Air Lines and STAPLES.

In the travel industry, perhaps it began with airlines promoting brand name coffee served on their flights? I’m not sure. But soon after we saw cruise ships starting to feature popular branded F&B outlets onboard like Johnny Rockets and Starbucks. Starwood Hotels has even created brands inside brands (see “Aloft – a vision of W Hotels”). I suppose that part of keeping brands fresh involves mixing other brands in to the advantage of both. Certainly but not limited to the travel industry, products need to be kept fresh and exposed to find and maintain relationships with new consumers.

Take this hypothetical example: John Doe just moved to Los Angeles from Atlanta to begin his career as a professor. In his new position he will travel to Asia often for research. He is an avid hockey fan and one evening goes to an L.A. Kings game to see his new home team play. At the STAPLES Center he notices Delta’s presence. In fact, he notices Delta’s presence all over Los Angeles and how they just began service to Tokyo’s convenient Haneda airport…. Back to the Kings game: Just after the 1st period, his assistant calls to report his laptop crashed. He glances up for a split second, and responds “Go to Staples and get a new one”.

The synergy of branding a brand or having multiple brands working side-by-side is – if nothing else – great exposure!

Press release with complete details can be found here:
http://www.staplescenter.com/doublecol.php?section=about&page=news_article&news_id=1871

The win-win cycle of loyalty programs

A hot topic is the travel industry’s use of loyalty programs to foster and maintain consumer relationships while increasing their brand recognition and improving the organization’s bottom line. The frequent traveler quickly finds that earning points increases their “status” levels and leads to priority services. The organization then increases revenue by the traveler’s loyal spending. This cycle has fueled massive program membership among all parts of the travel industry.

I engage in the cycle and have made a point of enrolling in the programs where I intend to earn even just a few points each year. Keeping an account active varies by program, but generally it is not hard to keep your points or miles from expiring. Redemption is a completely different subject and can be tricky based on the traveler’s status and the availability of the product or service.

American Express has a program called Membership Rewards® which allows cardholders to earn points and then transfer them into a host of company’s individual programs. I have found this very useful because it allows me to deploy points at my choice. Another favorite program is the Delta Airlines Skymiles® program which allows partial payment of many published fares using mileage. For instance, on a recent trip to Key West, Florida, I was able to deduct $600 off a roundtrip first class ticket and only spent money on what would average as a coach class ticket.

Even the smallest of travel related organizations should develop a loyalty program. The advantage is that by having consumers become participants they can increase brand visibility, publicize changes to their product offering, and identify trends that impact future growth. Nothing is better than a repeat customer and each loyalty program administration must agree.

Do you have any comments on the topic? Any tips to share from either the industry or consumer perspective? Let’s get some dialogue started and learn from each other!

Check out this USA Today article for more great information and tips:

http://travel.usatoday.com/deals/inside/story/2011/02/Frequent-flier-101-What-you-need-to-know-about-loyalty-programs/43216508/1