3 October 2006

Dynamic Packaging – What is in It??

Returning to work from a long weekend has been a feel good factor to me. I met Ajith in the morning today at office. Apart from the commonality that we both are from the same domain, unlike me Ajith is a die hard techi. The crux of our discussion was about “Dynamic Packaging in the Travel & Leisure Domain” and how it is critical to today's travel industry as airlines, hotels, tour operators and travel agencies realize the financial and commercial benefits of offering custom packages to consumers.

For some time, consumers have been purchasing packaged vacations. However, in the last few years, the travel industry has been buzzing with the catch phrase “Dynamic Packaging”. Many vendors claim to offer dynamically packaged vacations, but the true definition has been a topic of great debate.

So what exactly is Dynamic Packaging??

Today’s online travel consumers manually visit multiple Online Travel Portals [OTP's] to plan their trip, register their personal information many times, spend hours or days waiting for response or confirmation, and make multiple payments by credit card. Lack of functionalities is discouraging consumers – Where as in practicality there is a critical demand for an ability to create, manage and update their itineraries in real-time.

Dynamic Packaging can be defined as the combination of different travel components, bundled and priced in real time, in response to the requests of the consumer or booking agent.

Leading OTP’s let travelers build their own vacation by dynamically mixing-and-matching the purchase of airline tickets, hotel rooms and rental cars into one bundled low price, inclusive of fees and taxes.

The key point of differentiation between dynamic and traditional vacation packages is the ability for the travel consumer to dynamically tap into several, separate inventory management systems. The air could come from an airline’s inventory system or a GDS (global distribution system) the hotel room could originate in the hotel chain’s inventory system, a GDS or a block of inventory managed by a tour operator or vacation packager and the activities (show tickets, tours, etc.) could each come from a variety of different systems.

The entire process offers travel consumers access to a tremendous selection of inventory and is completely seamless to the travel consumer, who is unaware of where the inventory originates. A dynamic package is assigned a super PNR (passenger name record) as a reference code for the entire package. The super PNR reference code makes it easy to keep track of the reservation and its contents. Each individual component also has its own sub-PNR as assigned by the airline or hotel chain. Sub-PNRs reference the individual component and the system from which it originated. Though compiled by selecting inventory from a variety of systems and sources, the entire dynamic vacation package is easy to track, retrieve and modify.

Customers can be sure they are getting exactly what they want by choosing an online provider that displays specific airline and flight information, rental car provider, and hotel chain and location on one screen before booking.

They give consumers a competitive advantage with -

  • Specific offers and pricing per distribution channel

  • Real-time access to local or remote inventory

  • Custom or pre-bundled offers for instance - providing a single, fully priced package (hiding the pricing of individual components)

  • The technology includes the ability to combine multiple travel components (typically air, car and hotel) in real time.


  • Dynamic packaging platforms are based on an object-oriented XML architecture that allows seamless integration and migration of legacy and state-of-the-art systems. This offers stronger security and authentication between travel packagers, their retailers and consumers

    The packaging company can quickly and easily connect suppliers to its new selling system platform Hub which is compliant with Open Travel Alliance specifications wherever possible.

    These platforms are designed with procurement managers to secure products from selected suppliers based on specific travel queries and to return packaged responses according to validated pricing and business rules.

    Without a second thought, today travel distributors that offer dynamic packages are raising the bar in the travel industry. Those that give travel consumers more variety, flexibility and booking incentives (found only with dynamically packaged vacation products) will continue to be on top of the competition curve.

    Today the future of packaged travel is dynamic – and no doubts that it's here to stay. The new benchmark is being set – dynamic packaging is simply the most cost effective and reliant way for travel distributors to package, distribute and sell today.

    1 comment:

    Balakrishna N A said...

    Hi Nari,

    Good snapshot on dynamic packaging.

    Though its a new jargon for a cheaper and more flexible way of booking a holiday, never happens in real time due to various constraints in technologies and real time data. In terms of the customer/consumer, the premise is that dynamic packaging mimics the experience of visiting a travel agent and negotiating a deal the consumer wants.

    Have you come across Travelberry ??
    It is the first ‘dynamic packaging engine’ that allows travel companies and tour operators to pick their own XML / API / GDS suppliers and sell them through their web platform with unique layouts and added functionality.

    Anyway keep your BLOG ON

    Balakrishna N A