The intercontinental travel market is facing increased pressures due to changing travelling needs, booking habits and low-cost competitors. Our client wanted us to develop a price and offer optimisation tool to support their growth plans.
We executed an online hierarchical choice model with travellers. The large number of potential choice criteria required a hierarchical model: high level attributes (brand, price, ticket flexibility, …) were separated from detailed lower level attributes. The approach allowed us to understand both macro buying criteria and micro preference drivers (e.g. what aspects of ticket flexibility matter most).
We delivered a market simulator which continues to be used for service optimisations and pricing issues.
The client uses the model to play out hypothetical future scenarios like “market entry of a new long-haul low-cost carrier” or “introduction of in-flight catering for a charge” and reviews how these will affect KPIs. The tools became an indispensable element of pricing and innovation planning in the organisation.