Wednesday, August 16, 2017
The curious case of Look to Book Ratio!
When you start discussing with your suppliers, or while going through their agreement you would have stumbled upon this phrase for sure - Look to Book ratio (L2B). Ever wondered what that is? Here is the definition as per Travel Industry Dictionary - Look-to-book ratio. The number of people who visit a travel agency or agency web site, compared to the number who actually make a purchase. (http://www.travel-industry-dictionary.com)
GDS usually set down a L2B limit for you. Let us say you have a L2B of 250:1. What does that mean? Before that a bit of background. Traditionally GDS does not charge you for the queries you send or the hits you make to their server using the conventional blue screen. When it comes to Web based connectivity, GDS charge you for a hit. This could be due to the fact that the conventional screen requires a trained person to work on it whereas the web based system can be used by anyone who has a basic knowledge of travel industry. This could mean more hits than usual and could be a load on the GDS server and infrastructure. To avoid this or to limit this they bring in this term called as L2B. So if we take the case with L2B of 250:1 it simply means that you can look 250 times but should make 1 booking at least. You can send 250 queries to the server and this could be on availability, schedules, fares etc with multiple options, (carriers, time bands etc) but if you have made 1 booking then the GDS won't charge you for the same. For every hit or query that you take more than 250 to complete the booking, you are charged extra per hit. Even if this is something like 0.02 $ etc, for a large agency this could be a big amount at the end of a month if it is not managed properly.
GDS has varying levels of L2B also. There are different commands that you can use to get Availability, Schedules or Fares individually. These are considered to be relatively light queries and you may be given a L2B like 1000:1 whereas heavy queries like a Power Shopper or Super Best Buy or Master Pricer (as per your GDS) which combines Availability, Schedules and Fares will be charged at 250:1.
This means that wherever possible you should be using light queries to achieve your goal and use heavy queries only when the situation demands it. This is where an experienced Travel Technology company can help you in controlling your ongoing costs. We have seen many times Travel technology companies claiming for faster response, better results etc and Travel Agencies going ahead with them, but then burning their fingers when they see their quarterly bills from GDS. It makes sense to ask these questions on what kind of queries are used to get the results and how they affect your bottom line etc. Clarity is needed from both your GDS and your Travel technology partner too. You should not be afraid to ask these questions and we have seen that many times GDS revise their L2B to agents who ask for it. At the end of the day a L2B of 500:1 is always better than 250:1.
We are sure you will not disagree on that.