LockTrip Announces Economy 2.0 going Live – LockTrip
1.0 Economy → $8436.86
2.0 Economy → $6763.22
Difference → 20% cheaper, despite the 5% burn
Overall Analysis
Looking at the numbers above, it may look like low value bookings are now less competitive than high value bookings. However exactly the opposite is true.
Before the update, high value bookings were disadvantaged due to the slippage fees that inflated their prices. We know from customer feedback that a number of high value bookings were missed due to this effect. The ones we received were all paid with LOC to avoid the fees.
That disadvantage has now been resolved, as all offers are equally competitive, regardless of their price class.
Visualizing the above comparisons shows how higher value bookings are experiencing a huge improvement while lower value bookings are only affected by small margins.
In the graph above, 100% marks Economy 1.0 price levels. The colors green and red visualize how Economy 2.0 performs in comparison.
This shows us that despite applying a 5% burn ratio, most of that is being compensated by savings in slippage cost. High value bookings are experiencing a dramatic price drop despite the burn.
Of course we are steadily improving our inventory pricing through new suppliers. In 2020, we expect to add at least another 2% in savings across the globe. Let’s apply these savings to the graph and observe the results.
The red margins are getting very thin now while the green ones continue to expand. Even if we disregard these savings and assume that the pricing remains unchanged, we would still end up with the major benefit of burning 5% of each booking at no cost.
We recently announced that we will take advantage of this to boost our affiliate program. Read more about that here.
What do you think? Join our Telegram and let us know.
Published at Sat, 21 Dec 2019 17:08:41 +0000
{flickr|100|campaign}
