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Welcome to Travel Buddy
This episode of Travel Buddy explores the shift from traditional vacation packages to dynamic air packaging, where travelers can bundle flights, hotels, cars, activities, and more into one customizable trip. Switchfly CEO Nowell Outlaw explains how this approach can unlock surprising savings for travelers while creating new revenue and loyalty opportunities for airlines.
The conversation also digs into why total trip ownership matters. Bundled bookings give airlines a richer view of customer preferences, spending behavior, and future upsell opportunities. Nowell discusses the business and technical complexity behind modern travel platforms, including inventory depth, flexible pricing, machine learning, loyalty integration, room unification, and seamless booking flows.
For airline leaders, the episode highlights why speed and execution matter. Building dynamic packaging systems internally can be risky and complex, especially when proven vendor infrastructure already exists. For travelers, it shows how bundling can deliver more value and make trip planning more personalized. Overall, the episode frames dynamic packaging as a powerful way to improve savings, loyalty, and airline revenue.
*Resources*
- https://www.switchfly.com/lp/dynamic-packaging-buyer-guide
- https://www.switchfly.com/lp/airline-dynamic-packaging-infographic
- https://www.switchfly.com/lp/airline-travel-demand-calendar
Transcript
00:00:00] Welcome to Travel Buddy, presented by Switchfly. In this podcast, we talk about all things travel, rewards, and loyalty. Let's get to it.
Brandon Giella: Noel, there is a lot of conversation around, packaging in today's, airline loyalty markets. and there's, an industry shift, if you will, happening between. What you might call, ancillary add-ons and then moving into what you can also call total trip ownership, and that there is some missed revenue opportunities between these ancillary add-on products and what you might call this, this total trip ownership.
Can you talk to us a little bit about that? What is happening in your world around this shift from that add-on to the, the owning the entire customer relationship? What does that look like for y'all?
Nowell: Yeah, I think that, you know, ancillary add-ons, people tr traditionally think of, you know, adding when you buy a ticket, right? Adding your, your, where you wanna seat sit, and so you can upgrade your [00:01:00] seat, you can add a number of bags, you can add, you know, food, you can add specialty, things like that for on flight kind of things. I think about air packaging, it's a completely different thing, right? So it's taking the flight and it's. additional components of the travel ecosystem to that flight in a bundled way. So, you know, if you're taking a, a trip to, Cancun, right? Adding your, hotel, maybe a car rental, maybe a bunch of different activities to, thats single transaction, which is really outside of the way an airline thinks of. know, ancillary revenue being added just to that, that core passenger booking. It's really more bundling in everything else. That's part of it.
Brandon Giella: This is common. This has been happening for a while. Like if I go to a, one of these like online aggregators and I'm buying, putting a trip together, you can get flights plus hotels and so on. Like, what, what is, what is the shift in how you guys are thinking about it now? Because I mean, typically [00:02:00] people think of it as like, it's a vacation package.
I'm going to Hawaii and I wanna get the flight, I wanna get the hotel. Is it just semantics that this is different now, or the way that you're thinking about it is different?
Nowell: I think that traditional, you know, from the consumer point of view, right, traditional packages is, you know, Hey, I'm gonna. Bundle all this stuff together for you. I'm a travel agent and I've built this prebuilt vacation for you, period. The end, right? it includes whitewater rafting, it includes a hotel for three days.
It includes, you know, storage for your dog. It includes, you know, getting to and from the airport, all that other stuff. in the dynamic world, it's kind of choose your own adventure, so, you know, build out what trips you want. Hotels, you want activities, you want car rentals, you want and kind of bundle it all together.
you know, as, as you want. I think the, the concept of just a pure trip, like there's definitely things that fit that, like, you know, river cruises and things, but on, [00:03:00] on building your own vacation. It's more a self-guided journey, I think these days.
Brandon Giella: Obviously people would want that. A, a very personalized, that's all kind of planned out with all the pieces that you need a.
Nowell: Mm-hmm.
Brandon Giella: were just talking about that a minute ago. but what's the impact? Like, what's the need? What's the, you know, why does that matter now to think of it in this kind of new way?
Nowell: I think from the consumer point of view, it's what's, what's the value behind it, right? So most people don't know this. I didn't know this right when I first started, that if you buy a flight and you bundle a hotel, it unlocks, at different rate structure for the consumer, right? And you're able to get discounts and package prices. That aren't necessarily available to you if you're just buying a single use hotel or a single stay hotel. and separately the air, right, or separately, the car rental. When [00:04:00] you bundle all that together, the rate structure that is, available right to people or two consumers. Is better. Right? And so, you know, you can have things where, you know, because you've bundled a bundled a flight and a hotel and a car and all the rest of the stuff, you're saving thousands of dollars.
Right? And, and that's why dynamic packaging is really kind of unique thing for the consumer.
Brandon Giella: Remember you bringing this up on a previous episode, and we've even talked to, to Ashley Martinez about this. Said the same thing both of you is, when you're going to book a trip, book everything as much as you can at one stop shop. Like put, you know, if you're going to, you know, however you're, you're bundling your trips together.
Buy all the things at once because there's codes and all kinds of things that are happening on the backend that you have no idea about, but it actually does help your, your, your overall bill. So that's, that's what I gather. Yeah. Hm.
Nowell: And you know, when you get to, you know, the air carriers, [00:05:00] sometimes, you know, an airline will discount the air component. For a particular route. So let's say, you, you know, the airline is interested in, people to Hawaii, right? They will actually, the route, you know, it's, let's say it's Seattle to, to Honolulu, they will actually discount that route only for the packaging component, right? Then also discount the hotel and things in order to drive higher, you know, kind of yields and results into the airline by selling those
Brandon Giella: Hmm.
Nowell: right? And so most, most people would never know that, right? but it is a real thing for the consumer. Right when you add it all up and then you go, wait a minute, most people go, well, I'm gonna look on the airline website and then I'm gonna look on, you know, a OTA site and I'm gonna look up the hotel and then I'm gonna try to find this independently.
I'm gonna see if I can find my best
Brandon Giella: Yeah.
Nowell: And then they go to the, the packaging site and they go, I, I. can't beat the
Brandon Giella: [00:06:00] Yep.
Nowell: like Exactly right. Because behind the scenes they're doing things that you don't know, are happening on the rate structures. So
Brandon Giella: was about to say, that's exactly how I go on book trips. I go on one site to do one thing, I go to another site to do another thing. But,
Nowell: Oh,
Brandon Giella: but I have done that where
Nowell: is the
Brandon Giella: my, the rental car has, you know, basically like I got a free rental car for a couple days or for a week or whatever. By, by putting it all together, I was able to get a, a lot of savings.
I've done that before. Yeah. Okay, so I wanna talk more about the, the kind of nitty gritty, but nuts and bolts of on the, the business side of things of doing this. So by having this kind of frame away, perhaps from vacation packaging to more of this dynamic packaging, and it's not just about vacations, it's not a pre-packaged deal.
That, that really can impact conversion, you know, and, and have other kind of, you know, business impacts and things like that. Like, so talk to me a little bit about why that transaction matters so much and the [00:07:00] kind of the typical ways that people have done it and where you think we could go going forward.
Nowell: I think, and, and I use this phrase, more readily now, that. Especially now, given everything that's going on in the economy, are looking for
Brandon Giella: Hmm.
Nowell: to save
Brandon Giella: Yeah.
Nowell: We see this consistently and the concept of vacation packaging, doesn't necessarily value to the consumer, right? It's like, oh, well that's a package. Maybe it's more expensive. And this concept of bundling things together and saving them and saving money at, at bundling them, I think is a real opportunity for brands to show consumers how they can put things together and essentially drive more savings from, from building, one trip, if you will, with the airline. that make
Brandon Giella: Yeah, I've, [00:08:00] I've, you know, seen, some of the airline CEOs talking recently just because of the price of gas, because of geopolitical tensions around the world, if I can say it like that. and it's just the gas, the fuel is just going up so much so expect that I've heard even 20% increases on airline tickets over the summer.
so yeah, so we're always looking for ways to save money if that's the case, but yeah.
Nowell: And it's, you know, by changing it to, you know, a bundle and save, of value story to the consumer. not necessarily about, we've pre-built something for you, right? It's, Hey, if you bundle this together, you might actually save money through with the airline, with the hotel, with the car rental, with the activities. And so why not give it a
Brandon Giella: Yeah.
Nowell: And and the nice thing is that it's, since it's not pre-built, it can be any trip that you want. Right. So, you know, if you're going to Vegas, which you know now international is reducing, especially in North America, [00:09:00] and consumers are, you know, looking to go to Orlando or
Brandon Giella: Yeah.
Nowell: Vegas more than they are going to Europe, and as the airline fairs go up, right, like how do we, you know, you can see this visible
Brandon Giella: Yeah.
Nowell: in where people are looking, searching and booking,
Brandon Giella: Yeah. Yeah, we were talking about that on the last episode about like summer trends that you guys are seeing in data and also some different analyst reports and things that people are, are traveling a lot more around America. So,
Nowell: Yeah.
Brandon Giella: I'm curious, so something we were talking about, before we started recording was the importance of, you know, kind of making this shift and thinking about the d the different ways to kind of set this, this, I don't know.
Packaging discussion up. The importance of it is, around the data that you get from customers that are on platform and being able to kind of remarket to them and, and they become, you kind of think about this like total ownership of that customer journey, if you will. Like, talk to me a little bit about that, and how thinking more about this can do a lot more than just that transaction alone.[00:10:00]
Nowell: Well, if you think about, let's say you're an airline, right? And you've got, I fly United all the time. You know, you really have the coach customer and the first class customer, right? They might fly a lot. You know, they get free, you know, premium economy seats. Maybe they upgrade into first class. Maybe they don't.
Maybe they're flying coach. But that really doesn't tell you a lot about that customer, right? So, you know, one of our board members, he flies a different airline. He flies in a coach seat, Because he's value driven. doesn't have, I mean, he could buy the entire first class lounge if he wanted to, right? But he doesn't, he doesn't choose to do that. However, where he stays on his trips are super nice, right? And if you don't have any insight into who's sitting in, in the back of your plane, maybe that would be an important thing to have, right? Because [00:11:00] now let's say, you know, you know, a person bought, you know, the, the cheapest tickets that they could find, because it's only a two and a half hour journey, But they're staying at the Ritz Carlton five star resort. Wouldn't that be an interesting thing to know and to really understand that
Brandon Giella: Yeah.
Nowell: And so, so adding this other dimension all of a sudden lets you understand who is flying on your airline and also how you can upsell and basically improve, you know, the, the economics longer term, I think with them, I think that's, that's a big part
Brandon Giella: Yeah. Yeah. Having a, a multidimensional view of the customer, it takes on a whole other life of its own through marketing and through the customer loyalty and things like that. Yeah. Yeah.
Nowell: Yeah, for sure. Because I mean, even if I have a lot of points on your airline, which means I fly a lot, it doesn't tell you a lot about me as a consumer, right? I mean, you know, the airlines know, well, you're a, you know, you usually book within seven days or 14 days or [00:12:00] 21 days, and you know, are you price oriented?
Are you buying first class? That's all they know, right? They don't know about the rest of your travel journey, and I think they're, they want to know around the rest of that.
Brandon Giella: I, I have talked about this on the show before, but I have two little kids, three in one, and I feel like if I put on the itinerary that I'm traveling with a 3-year-old or a 1-year-old, there should be something a little special that I get. I get to bored earlier. Or I get to, and I know some airlines do let you border earlier if you, if you tell them, but I'm just thinking these like little.
Just these little joys that make my travel easier because a three-year-old on a plane is not always the most calm thing in the world.
Nowell: crazy.
Brandon Giella: okay. So when you're thinking about this, when you're thinking about air packaging, what is it that drives performance in your mind? And what should these airlines and, and, leaders thinking about, this issue, what should they be focusing their attention on?
Like, what is the thing that really moves the needle?
Nowell: I think it's really around consumer value,
Brandon Giella: Okay.
Nowell: [00:13:00] right? So, you know, when we talk about this bundle and save option, you know, are you really, are you really focused on a particular route
Brandon Giella: Hmm.
Nowell: Or a particular area of the country or geography. you know, we run, Japan Airlines vacation packaging, right? There is a definite destination in going to Japan, right? And, you know, as you can do some of those route specials, you can do some of the, you know, hotel partnership specials to really, get consumers to switch over to, you know, try your airline, try this, this concept because of the value. Right? And so I think, you know, is really. Being driven off of, you know, that value equation. But that value equation can only be driven off of things like, you know, do I have an adequate inventory? Right? So, you know, seen people that they only single source a, you know, hotel inventory [00:14:00] system and. That's good enough, maybe for specific regions, but on a global scale, it's not big enough, right?
So different OTAs handle different segments of the world, better or worse, depending on where you are, right? So you know, the Far East is an example. There's different suppliers and those suppliers do a better job at inventory rates and everything than a North American one. So.
Brandon Giella: I imagine the technical infrastructure of actually pulling that off your partner ecosystem, the able to set pricing quickly in an engine while somebody's searching and trying to put something together, I imagine that's an extremely complex thing to figure out as well.
Nowell: Correct. you know, this is where we talk about AI and machine
Brandon Giella: Mm.
Nowell: you know, just data science in
Brandon Giella: Mm-hmm.
Nowell: the, you know, when you're looking at pricing, you know. if you think about the consumer who's showing up, right? And I, if [00:15:00] you, you know, the consumer who's like, oh man, you know what? weekend is a three day weekend. I just got Friday off, or whatever, and they're gonna buy something right away, right? That doesn't necessarily mean you have to be the cheapest discount, right? If someone has that seven day, kind of less than seven days to travel. if a consumer is showing up and they're planning stuff out, ninety, a hundred and twenty, a hundred eighty days from now, they're probably very price sensitive.
Right? And so having tools underneath the hood, if you will, that can adjust for specific routes, segments, locations, durations. So you can say if it's a consumer, you know, and we've targeted, Miami right, as a good destination, they're under seven days. Now make the margin X. But if it's, you know, 90 days out and it's Miami, make the margin y Right.
And, and just adjust things. 'cause you are trying to get the conversion down, right?[00:16:00]
Brandon Giella: What are your thoughts on like buy now, pay later? Points plus cash,abandoned cart recovery, like some of these other things that I know, different airlines have tried in the past and things like that. But,
Nowell: Yep.
Brandon Giella: you know, travel protection is a big one. that's a very obvious one that you're, you're prompted if you're gonna buy a ticket, you're prompted with that thing.
So, you know, just different things like that, like do those factor into the mix when you're thinking about Dyna air packaging.
Nowell: They do. I think one of the things is, you know, one, people are planning a vacation, right? And so this is not a work trip. And you know, I do work trips all the time. I gotta cancel it. I move it around, I get the credit, boom, boom, boom. It's no big
Brandon Giella: Yeah.
Nowell: But that's different than, okay, I'm taking, you know, my wife and my two kids gonna go on an international trip. Right. Well, that trip, let's say it costs, know, $7,000 all in. Right. Well. I wanna protect that trip. Super critical.[00:17:00]
Brandon Giella: Yeah.
Nowell: I have to be able to add insurance
Brandon Giella: Yeah.
Nowell: if something happens, right, if your 3-year-old gets sick, you don't wanna risk that $7,000, right? And so, you know, being able to protect that is, is super important. The, you know, the optionality to buy now, pay later is also good because people look at it and say, wow, that's, you know, $7,000. I know I'm getting my bonus later. So, you know, can I put this money down? And then they just come up with a flexible payment plan to, to, you know, to make sure they can go on the vacation, but not, you know, putting the whole thing, you know, outlaid on their credit card upfront.
And I think that's important because, you know, those longer journeys and longer vacation trips do cost a lot of money. and the, you know, the miles with cash in loyalty plans, you know. airlines themselves, they always wanna move points and that's how consumers come back to their brand. And so ensuring that you have the ability to redeem [00:18:00] for or miles as well as, you know, cash redemptions is, is just part of the ecosystem.
Right.
Brandon Giella: Okay. Last set of questions, is, so we've talked about how in dynamic air packaging, typically it is called vacation packaging, but that, is, that kind of connotes, prepackaged offers. Whereas if you think about it more of like. Personalized bundle and save options, it kind of opens up this wider remit that allows you to, to think more differently about the customer.
You get more dimensions on who they are. So when leaders are thinking about these projects, what are some of the things that you've seen where it stalls, in the process of, of kind of putting these projects together and what do you think can be done about it? What, what should they be thinking about ahead to get ahead of some of these, these kind of challenges?
Nowell: you know, I think what you see a lot of is. People a try, try to build it [00:19:00] themselves
Brandon Giella: Hmm.
Nowell: how hard this
Brandon Giella: Hmm.
Nowell: we just had a, a client that, they tried to build it themselves. They spent 18 months and then they realized this is not gonna work. Right. And it's, switch fly's been doing this, or actually one of our very first air packaging customers this year, and it's a major airline, will have been a customer for 20 years.
Brandon Giella: That's crazy. Yeah.
Nowell: and they're driving hundreds of millions of dollars in revenue. and, you know, so the interesting thing is when you think about implementations, I, you know, having done implementations probably my whole life, the big home run stellar projects, they either slip, fail, they miss, they're, they're hard to deliver, right?
When you start from scratch like that. And in today's world where you have to be able to do things fast, you know, those kinds of projects are really high risk. And so, you know, that's why having a, a [00:20:00] vendor that can spin up things very quickly, I think is super important. And, and I also think that people underestimate the amount of effort that it takes to do this the right way.
Brandon Giella: you talked before about the speed at which you're able to, to move, and I think that focusing on that is, is really important. But man, that sounds hard. We talked about all the complexity it goes in that.
Nowell: Well, it's, you know, it's like you could go, I mean, a lot of people are like, well, I, you know, I'm gonna go code to, you know, I'll not use names, but OTA one, they have an API and I'm gonna integrate with it. You know, those guys, I'm gonna integrate with these other guys over here. like, great. Okay, so you also need to handle what's called like room unification, because you're gonna get a data feed of two different places. You have to compare the rates, but you have to make sure that you're serving up the right content, right?
Brandon Giella: Sure.
Nowell: Well, whose content are you going to
Brandon Giella: Hmm.
Nowell: rates are you going to use?
Whose images are you gonna to
Brandon Giella: [00:21:00] Hmm.
Nowell: you know, it becomes really, this really simple thing becomes really hard, really
Brandon Giella: Hmm.
Nowell: And, You know, and then you, you add all the other components in there. That's why in a lot of cases, if you go to some places, sites, what you'll see is they don't actually have dynamic packaging per se. What they have is kind of single sales booking flows. So you can buy the air. done. You can buy a hotel separately, checkout done. You can buy the car separately. Checkout done. That's not dynamic packaging. That's, you're not, as a consumer, not afforded any discounts or value when you have air plus a hotel, plus a car all combined into a single transaction,
Brandon Giella: I haven't thought about that. I don't know if. Consumers would know. how would you spot the difference? I don't know. That's a Yeah, yeah, yeah. Yeah. I would've no idea. Huh. Interesting.
Nowell: Yep.
Brandon Giella: Well, thank you for, [00:22:00] for giving us some insight on this. I know it's kind of a growing conversation. Any other thoughts, about, you know, looking at different vendors or partners or, anything else I think about in this issue?
Nowell: Oh,
Brandon Giella: Yeah.
Nowell: as always, like, that's why
Brandon Giella: Yeah.
Nowell: a company, but, you know, and we do this all day every day. It's interesting to watch, you know, airlines kind of wanting to step these things up the right way. So it's
Brandon Giella: Yeah. Awesome. Well, I know you guys have an upcoming white paper, that will discuss more details of this issue. So thank you for your team putting that together. You can find that@switchfly.com Noel. Thank you as always. last question for you. Where are you traveling next?
Nowell: I'm going to Washington, DC because our youngest son is graduating from undergraduate, in a
Brandon Giella: Hey, congrats. Awesome, awesome. Well, excited to see that. Okay, well, Noel, thank you again. We'll see you on the next episode.
Nowell: All right.
Brandon Giella: Thanks. I.
[00:23:00]
