TRAVEL & TRANSPORTATION

The travel and transport sector is undergoing profound change. Ten years from now, it will look nothing like it does today. 

There are numerous contributing factors:

• Competing crosscurrents of globalization and protectionism
• Large shifts in global wealth distribution and an explosion of disposable income in various emerging markets
• Major changes in the travel purchase behavior of both consumers and businesses
• Consolidation in many supplier markets such as airlines and hotels
• Rapid realignment of the travel distribution landscape
• The rise of Big Data and its potential to reframe travel and transportation planning
• Disruptive technologies such as  personal device ubiquity, the Internet of Things (IoT), augmented reality (AR), and the “new mobility” of ride-sharing, autonomous vehicles, electrification, and transport drones
• Increasing attention to, and associated regulation of, factors contributing to climate change

The impact will be felt in all the travel and transport industries: airlines and airports, hospitality, travel and tourism, maritime, rail, mobility, and freight and logistics — all the services that exist to connect the world by moving people and goods from one place to another and accommodating them on the way.

Industry leaders must plan for these significant macro challenges and for the specific, complex demands of their own domains. What will be the shape of travel and transport one decade from now? How will these trends transform the ability to make the world more connected for businesses and consumers? Whom will the winners be, and how exactly will they prevail?

How we support

Leaders in the travel and transport sector are asking:

• Which of these dynamics will have the greatest impact on my industry and my company?
• How will these create dislocations in my competitive landscape? Where are new threats emerging? In my own industry, or in other areas like technology?
• In the face of so much uncertainty, how can I formulate effective short- and long-term strategies?
• What capabilities should I grow organically? What capabilities should I acquire? What capabilities should I shed?
• What alliances should I be considering, both within and outside my industry?
• How should I organize and what new skills must be emphasized on my leadership team?

As a travel and transport industry thought leader, we help our clients navigate, or fundamentally reshape, the changing economics of their respective industries. Whether it’s driving airline industry consolidation or partnerships, introducing new ancillary revenue, optimizing travel loyalty programs, privatizing airports, or improving the guest experience at hotels, our work fundamentally changes industries for the better.

When it comes to identifying growth strategies and investment opportunities that reflect passenger and freight market developments, or through cost-saving and operational performance improvements in network and logistics businesses, we have the industry knowledge and expertise to give our clients a competitive edge.

Our airline strategy capabilities span all commercial issues, including network planning and expansion, distribution, corporate dealing, sales force effectiveness, frequent flier programs, merchandising, product development, customer engagement, and digital strategy. For example, over the past decade, we have advised on three of the world’s largest airline mergers and on half of the 10 most recent joint ventures, restructured three of the top five global FFPs, designed breakout network growth on six continents, and consulted on the strategy and implementation behind billions of dollars of ancillary revenue for more than a dozen carriers.

How we support

In today’s fast-changing and uncertain airline landscape, it is important for airline executives to ask themselves a number of critical questions, including:

• What is the best way to build a defensible position and sustainable economic profit in the face of intense rivalry and future increases in factor costs?
• What is the industry consolidation end game, and what does it mean for how we think about network growth and alliances?
• How can we tap in to the financial benefits of ancillary revenues without jeopardizing our overall value proposition and brand? How do we take our ancillary revenues to the next level in order to improve customer satisfaction while driving even greater bottom-line performance?
• What exactly is our relevant customer battleground, and how do we win and retain the most important passenger segments?
• How are trends in big data and personalization impacting our approach to marketing?
• What does fare fractionation mean for our business, and do we have the optimal LOPA calibration of fare products?
• Are we doing enough to engage our customers digitally, as younger cohorts are influenced by the outreach of OTAs, hotels, and other players in the travel ecosystem?
• Is our sales force configured properly, and have we optimized our go-to-market approach and contracting strategy for the next five years of growth?
• Are we prioritizing appropriately across our myriad initiatives and deploying our capital optimally?

We complement our airline industry experience with a broad and deep Travel & Transport practice that serves the customer across all the adjacent areas of airports, hospitality, travel and tourism, rail, maritime, mobility, and freight and logistics. In addition, we extensively leverage our Aerospace team and their detailed knowledge of the supplier landscape.

In particular, TNG’s strong heritage in consumer-focused sectors pro­vides us with proven behavior models that can identify untapped opportunities and introduce successful new products and services to airlines.

For more than 20 years, TNG Consulting has been a strategic advisor to airports around the world. With more than 700 airports, aviation authorities, FBO, airline, and related aviation engagements, we advise many of the world’s leading airports on their most pressing strategic, aeronautical, and commercial issues.

We have superior expertise in serving airport customers, both passengers and airlines. Understanding them is the key to growing the value of the system rather than simply redistributing wealth among the existing participants.

As long-term assets, airports need to be on the front foot regarding long-term disruption. Our related practices in retail, media and surface transport are routinely dealing with the disruption of new business models such as Amazon, new mobility solutions such as Mobility as a Service (MaaS) and CAVs, and the impact of millennials’ changing habits. We bring these insights to bear in all our work in the airport sector, and help clients avoid missed opportunities or stranded investments.

To get this customer-focused value, we help airports and airport owners with transactions, privatizations, organizational structure, portfolio strategy, business unit strategy and business planning.We also work inside the airport. In the aeronautical arena, we help with regulatory submissions, commercial evaluation of alternative development paths, capacity planning, assessment/development of new operating models and aviation marketing strategy.

Commercially, we work to increase parking, food and beverage, and retail income per passenger, and to future-proof these valuable businesses in the face of major upcoming disruption. Consumer insights and other expertise from our global retail and ground transport practices support efforts in areas such as segment and competitive strategy, new concept evaluation, business case development, and vendor negotiation.

Finally, we bring our airline network-planning experience and expertise to the development of detailed and practical airport traffic forecasts that can be used to underpin major infrastructure investments.

Key questions and challenges

Some of the questions we can help you answer are:

• What is the arena in which we compete for traffic, and where can we win?
• How fast is demand growing, how is it changing and when should we invest in new infrastructure?
• What is the investment case for new infrastructure? What impact will a new facility or equipment (say, a runway) have on the airlines’ operations and costs, and on the national/regional economy? How do we make the case for investment?
• What is the right aeronautical infrastructure? Should we invest in common user facilities? Should we use operational solutions as an alternative to CAPEX?
• How can we grow retail and, in particular, the duty-free business?
• How will the consumer experience and the commercial model need to change in a millennial-driven world?
• What is the competitive strategy of the parking market? How do we outcompete our current competitors in an increasingly connected, data-rich world?
• What is the future of our parking and ground access strategy? How will new mobility models change airport access, and what impact will they have on parking? What are the implications for our parking investment strategy?
• Can we grow overall revenue through better partnering with airlines?
• How can we use big data to improve our customer understanding, and hence our performance?
• What should we pay for this airport?

Companies operating across the distribution, agencies, and tourism ecosystem benefit from TNG’s depth and breadth of market knowledge. Clients turn to us to develop strategies that unlock profits, manage risks and create new opportunities. Global hotel chains, resorts and casinos, tour operators and cruise lines, car rental agencies, and other channel participants such as GDSs and OTAs choose to partner with us because our experts have the deep industry and operational expertise required to give them a lasting competitive advantage.

Our core capabilities in this sector include advising clients on guest experience, customer loyalty, revenue enhancement, growth strategy, distribution strategy, profit optimization, marketing effectiveness, and mergers and acquisitions and alliances.

Key questions and challenges

Executives charged with maintaining and growing airport logistics need to ask themselves a number of questions, including:

• How can we optimize our products or services to differentiate the guest experience?
• How can we foster sustained loyalty from our customers?
• How should we invest in enabling optionality and personalization — and toward what objectives?
• What are the optimal merchandising strategies, upselling strategies, and new products and services that will drive ancillary revenue growth?
• In today’s rapidly evolving distribution landscape, how can we make the best use of all available distribution strategies?
• What analytics will help us best understand and optimize our marketing activities?
• How should we identify, validate, and value new, inorganic growth opportunities?

 “Winter is coming” to the hospitality industry. After enjoying years of unprecedented growth, hotel owners must now prepare for tougher times ahead. Growth in revenue per available room has slowed. Some bellwether markets are experiencing declines as new construction that started during the boom years continues to add to capacity. Meanwhile, digital is reshaping the industry. It puts instant buying power in guests’ pockets via their smartphones. But at the same time, it creates complex “frenemy” relationships between hotels and online travel agents like Expedia and Priceline’s Booking.com, which are simultaneously suppliers of bookings and high-fee competitors for both profits and brand loyalty. A similar dynamic applies to relationships with credit card companies as they try to develop their own loyalty programs that come between the guest and the hotel brand.

Global opportunities abound — for example, there is explosive growth in China and other parts of Asia and in Africa. Local flags are rushing to fill the gap in those markets, where no brand yet dominates. The new generation of millennials also is on the rise, with new preferences and priorities. It’s more than enough to keep hotel executives up at night.

How we support

With extensive experience in the hospitality industry, TNG Consulting is here to help senior leaders in the hotel industry think through the major questions confronting them, including:

• How can we maximize both revenue and profit in the face of declining bookings and intense competition on so many fronts?
• How can we market successfully to a changing customer base? Do we need to create customized offerings for distinct customer segments? What should those offerings be, and how can we plan and execute them?
• How should we be using mobile technologies to create more and better touch points with guests?
• How can we best leverage the extensive data we are accumulating to productive effect?
• What is the right strategy for managing our profitability, brand, and guest relationships in the face of significant distribution trends?
• How should we view our relative market position in a consolidating landscape, and what is the role of partnerships against this backdrop?
• How should we plan to seize global opportunities? Alone or in partnership? In what markets? At what scale?

As the world becomes more populated, connected, polluted and city-centric, the need for effective and efficient movement of people and goods has become more pressing for a range of stakeholders. The application of disruptive technologies in transport is enabling the rise of multiple new mobility trends: connected and autonomous vehicles, mobility-as-a-service (MaaS), on-demand transportation, electric vehicles, ride-sharing, ride-hailing, micro-mobility, drone delivery, and more.

These trends, and the technologies that enable them, are developing in different ways in different global markets, but one fact is clear: Mobility is undergoing a transformation that will have a global impact across many industry sectors. Having a practical and objective view of how these trends will progress is critical as private and public sector organizations address the opportunities and challenges ahead.

TNG Consulting’s New Mobility practice is a leading adviser to governments, investors, disruptors, and industry incumbents on the commercial impacts of these trends and making choices on how to develop winning strategies.

Key questions and challenges

• Our clients in the new mobility ecosystem are asking a number of critical questions:
• What are the relevant new-mobility trends, at what scale and in which geographies will these be adopted, and over what horizon?
• Which service models are likely to prevail across the mobility landscape in 5 to 10+ years, and why?
• What are potential future outcomes that may result from new mobility, and what risks and opportunities do this present to my organization?
• What are the infrastructure impacts and new requirements that will emerge?
• How will shifting value chain dynamics encourage new service models to arise and flourish, and what barriers exist to change?
• How should existing business models adapt and change, and in response to what triggers?
• Are there M&A opportunities or internal developments that could be strategically important for adapting to future mobility scenarios?
• What will the government’s role be — both in the development of integrated mobility across public and private transport and in encouraging improved air quality and low-carbon vehicle adoption?
• How are consumers/businesses using different models of transport and logistics services, and what are the broader societal impacts?
• What should my organization do to respond to new mobility in the near and long term?
• How should my organization evolve in this context?