Seat sales are ineffective, say airlines

Airlines have found that seat sales do little to sell seats to Bermuda, a company hired to help boost air arrivals revealed.

Brad DiFlore and Oliver Lamb, managing directors of Ailevon Pacific Aviation Consulting, told attendees at a Tourism Summit at the Fairmont Southampton that airlines had said lowering the cost of seats on Bermuda flights only decreased revenues.

Mr DiFlore said, as part of their research into Bermuda’s market, the firm spoke to a range of airlines about the advantages and disadvantages of the island as a destination.

He added: “It’s a solid market. It’s a very solid business market and they like that as it supports high fares. It’s generally a stable market — it doesn’t vary a lot over time and summers are excellent.

“But lower fares do not stimulate demand. They just reduce revenue. We have heard that from a number of carriers.

“When they lower fares, they don’t see a spike in demand. They see a little bit of demand increase, but not necessarily enough to offset the amount they dropped the fare by.”

Mr DiFlore said Bermuda was an expensive destination for visitors beyond the cost of flights, which would limit the impact reduced airfares could have.

But he added first and business class seats to Bermuda — particularly from the UK — filled up faster than cheaper economy class seats.

Mr Lamb said that the BA flights from Gatwick showed that “more than half the travellers are not in economy class. They are travelling in business, first or premium economy”.

He added: “For them usually, more than two thirds of their market is sitting in the back half of the plane.

“They look at Bermuda and think this is very, very, very weird, and the problem with it being very weird like this is their planes are configured as if the market was two-thirds economy class.”

He said that most British Airways passengers to and from Bermuda would notice that business and first class seats were full, but there was still space in economy class.

Mr Lamb added: “Every time that plane comes in, a lot of those seats remain empty, and that’s fewer people we are bringing to the island, fewer people staying in our hotels and less money being spent on island.

“We look at that as a huge opportunity. When we have half of economy seats unfilled, what can we do about changing that?”

Aaron Adderley, the president of airport operators Skyport, said that less expensive hotel options for visitors could encourage value-conscious travellers from Europe to visit the island.

He said: “Any time that we have sat down with an airline and talked about the viability of introducing a Bermuda service, the conversation has always shifted towards what kind of room inventory is available.

“The fact that we have, with the Bermudiana property coming online and properties like Grotto Bay, the idea of having those affordable price points is really attractive to UK carriers and I think ultimately we will eventually secure an alternative service to the UK.”

Mr Adderley added that there was a strong link between capacity and demand, and that additional service from Europe would increase the number of visitors, not divide them among competing airlines.

He said when Zoom airlines introduced its short-lived service between Bermuda and the UK, it had little effect on British Airways.

Mr Adderley said: “For that one summer that they were operating and they were filling those planes, when we looked at the year-over-year difference in traffic for British Airways there was a difference of one passenger.

“Every single person that Zoom brought to this island was stimulated traffic. There was no cannibalisation taking place.”

Kevin Dallas, the Bermuda Tourism Authority CEO, said he hoped that the creation of a new strategy to improve airlift would bring a “right-sized” expansion of service from the US.

He said: “My ambition would be that we get a decent season out of Newark. I think there’s a case for year-round service out of DC.

“I think we should be looking at incrementally improving what we have today rather than expecting that we are going to have 20 direct connections by 2021 — although that would be nice.”

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Published Oct 17, 2019 at 9:40 am (Updated Oct 17, 2019 at 9:40 am)

Seat sales are ineffective, say airlines

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