Dynamic Packaging, Past, Present and Future

Dynamic packaging has shaped the way we book travel. It’s based on the old travel industry concept of packaged travel and has changed the way trips are being sold online. We are now at the beginning of a new evolution of dynamic packaging, which we will outline later in this article but which cannot be understood without revisiting the past and present of dynamic packaging.

The Past

The concept of ‘packaged’ travel can be traced back to as early as the 1840s with Thomas Cook, a British agency, credited with launching the first package tour. During the 20th century, with improvements in transportation and the rise of the middle class, package holidays, combining flights, hotels, and sometimes meals, became a popular choice, especially among European and North American tourists visiting Mediterranean destinations. After the emergence of online travel, dynamic packaging emerged in the early 2000s. It enabled agents and end customers to quickly search through a vast number of available packages online in order to find the best possible package for a given traveller. 

The Present 

There are two techniques typically used in dynamic packaging solutions: Caching and real-time pricing/availability. Some dynamic packaging solutions pre-compute flight and hotel combinations based on vast caches, and storing those combinations as well. These package caches can be searched very efficiently, and later the selected package has to be checked for availability again. These solutions are very fast and support wide searches, but lack flexibility. In these types of systems, there is only a limited possibility to adjust the package after selection. 

Other solutions do use cached flight and hotel data for showing early results in the funnel, but actually compute hotel and flight combinations based on live prices and availability for the concrete offers shown later. These solutions can provide more flexibility in flight and hotel choices and also dig into more pricing options. The drawback is that live searches take a bit more time than searching a pre-computed package cache. But clever use of flight and hotel caches for the first part of the funnel can mitigate this to a large degree. 

One of our customers has been using our platform by taking a pre-computed package and then slicing it apart in order to further modify it. Now, we are launching the native capability for the second mode. This will allow our customers to be at the forefront of current dynamic capabilities and to get ready for the next step in dynamic packaging evolution.    

The Future 

Despite the many strengths of dynamic packaging, current systems still only allow a very limited amount of personalization and flexibility. There are a few dimensions where more flexibility would be extremely valuable: 

1. The ability to change all elements of the existing package (e.g. flight, hotel, transfer) in a flexible way. This allows better personalization of offers, which is a key customer requirement today. 
2. The ability to seamlessly add more services such as cars, transfers or excursions to a package. Being able to capture this will not only increase the service towards travellers, but also allow travel brands to increase shopping baskets and therefore the profitability of their business. 
3. The possibility to further extend the package by adding a second stop or even build it out to a multi-stop trip. 

1. and 2. can be done by some of today’s solutions with the real-time approach in limited fashion. When it comes to 2., then it’s mostly in an “upsell” mode and not integrated in the overall planning process. 

3. is something that is still missing from today’s travel technology landscape. However, there is a strong business rationale to be able to do 3. eventually. For example, there are a lot of very popular dual-center combinations (e.g. city and beach such as Bangkok and Phuket, Singapore and Bali, and lots of others, but also combinations of two cities) that travel brands cannot efficiently sell today. Furthermore, being able to do 3. could provide a much easier entry point to selling flexible multi-stop trips online by capturing the customer with a simple combination and then allow them to add more complexity later on. 

At Nezasa, we very much believe in this future of dynamic packaging. The combination with our new real-time dynamic packaging solution with our TripBuilder platform will soon be able to provide the flexibility outlined above. We are excited about what possibilities this will provide to our customers and their end consumers. More flexible dynamic packaging has the potential to transform not only our customer’s business, but also the travel market as a whole.