Airlines are rethinking how they sell their offerings and service their customers. Understanding common misconceptions about airline retailing could help accelerate growth.
Travel not only has recovered but also is exceeding prepandemic levels: In 2024, airline gross bookings reached 115 percent of their 2019 total. At the same time, evolving consumer expectations and behaviors are reshaping how people plan, book, and experience their journeys. Together, these shifts are fueling a rapid transformation of the travel sector.
The airline industry is attempting to meet these expectations through, in part, improving its approach to retailing. What the airline industry refers to as “retailing” primarily encompasses selling (of, for instance, tickets, upgrades, and ancillary offerings) and servicing (of, for instance, refund requests and other traveler needs) across all customer channels, including both airline-controlled websites and apps and third-party online travel agencies (OTAs). Many carriers remain constrained in their retail efforts by siloed structures, legacy technology platforms, and concerns that up-front investments in retailing may not yield immediate or sufficient returns. While some airlines have taken meaningful steps toward modernizing their retailing, there remain untapped opportunities to boost both customer value and commercial potential.
To better understand how traveler expectations about retailing are shifting—and to identify instances in which conventional industry wisdom may be outdated—we conducted a global survey of 7,000 travelers from North America, Europe, the Middle East, and Asia. The survey’s findings highlight and debunk eight common myths that continue to shape airline retail strategies, while offering insight into what travelers actually want across the full retail journey from inspiration to post-travel engagement.
Myth #1: Airlines have already captured the full value of customer preferences
Reality: Most travelers are willing to pay more for features they care about—but many airline retail models still rely on static airfare bundles that fail to realize that added value
In our survey, 33 percent of respondents cite price as their top booking criterion. But many travelers prioritize other attributes too, including ease of booking (20 percent) and brand trust (20 percent). These findings are consistent with decades of choice-modeling research and industry knowledge, which have shown that price is just one of several decision drivers for consumers.
Our conjoint analysis quantifies these preference patterns (Exhibit 1). While price holds the highest relative weight (34 percent), other features such as baggage allowance (16 percent), seat selection (10 percent), and ticket flexibility (9 percent) are also powerful drivers of travelers’ choices—often more so than traditional premium features such as lounge access (4 percent). The airline industry has made considerable progress in revenue management over the decades, but a breakthrough opportunity awaits airlines that can understand and accommodate a range of preferences that vary substantially across segments. For instance, Japanese travelers assign 42 percent importance to price, compared with just 28 percent among Chinese travelers. Younger travelers (aged 18 to 24) place greater value on features like Wi-Fi and ticket flexibility, while higher-income travelers are more likely to prioritize features such as seat selection and priority services.
Myth #2: More personalization always equals better experiences
Reality: Travelers want personalization that reduces noise and adds practical value—they care more about clarity and control than customization for its own sake
As evidenced above, travelers are willing to pay more when they see clear value—especially for features that enhance control, comfort, or peace of mind. Personalization can support that value perception, but only when the personalization is simple, useful, and relevant.
In recent years, airlines have raced to personalize every aspect of the travel experience. They’ve added new fare classes in economy cabins, multiple seat types in premium cabins, more tiers in loyalty programs, and highly customizable onboard services such as “dine on demand” or entertainment profiles. But more choice doesn’t always mean a better experience. Even features that are widely valued—such as seat selection—can become overwhelming when the traveler is presented with too many nuanced or unclear options. One traveler described spending more time choosing a seat than booking the flight itself—because of a fear of picking the “wrong” seat. This particular choice might be made more useful if the airline presented the differences in value between seats instead of just showing a seat map.
Digital experiences have followed a similar path. Travelers might now see hypertailored offers in apps or loyalty portals, based on location, browsing history, or elite status. But when asked to recall which ones were actually useful, many struggle to name even one.
Myth #3: Travelers prefer to book travel components separately
Reality: Many travelers prefer thoughtfully designed travel bundles—as long as those bundles reduce complexity and offer real value
At first glance, it may seem logical that travelers who seek full control over their journeys would prefer to book flights, hotels, and other components individually. After all, previous McKinsey research shows that many travelers enjoy the planning process and value the ability to shape their itineraries on their own terms.
But in practice, many travelers appreciate bundled offers that simplify choices and deliver clear value. Nearly half of all respondents (46 percent) express positive attitudes toward travel bundles that combine flights with other services such as hotels, insurance, activities, or airport transfers. Only 22 percent say they prefer to book each element separately.
The appeal of bundling is rooted in two powerful psychological drivers. First, travelers often perceive bundles as offering a discount—even when the actual savings are modest—tapping into a deeply ingrained behavioral instinct to secure a good deal. Second, bundles provide a sense of relief by simplifying decision-making. In an environment overflowing with options, curated offers help travelers make faster, more confident choices and reduce the stress of planning.
But there’s a delicate balance to strike. Poorly constructed travel bundles at the wrong price points can erode trust, cause confusion, and ultimately lead to abandoned bookings. Well-designed travel bundles—tailored to customer needs and sensibly priced—can significantly boost both conversion and satisfaction.
Our survey data reveals deeper insights into consumer preferences. Hotels represent the most appealing bundling opportunity, with 60 percent of travelers indicating they would “often” or “always” consider hotel bookings offered as part of their flight packages. Travel insurance (50 percent), tours and activities (43 percent), and airport parking (43 percent) also show strong potential as travel bundle components.
Myth #4: Basic digital presence and traditional promotions are enough to sell airline products effectively
Reality: Modern airline merchandising requires sophisticated techniques, including behavioral nudging, immersive content, and seamless omnichannel experiences
Previous myths examined what travelers value—from flexible pricing models to practical personalization to thoughtfully designed bundles. But understanding customer preferences is only half the equation. How these offerings are presented to travelers is equally critical, yet it often receives less attention. Our research indicates that advanced merchandising techniques can drive a 10 to 20 percent revenue lift for retail organizations by improving conversion, basket size, and traffic. While many airlines have invested in product development and pricing strategies, they often still rely on basic website functionality and standardized promotional approaches.
The most successful airline retailers have adopted sophisticated techniques that were pioneered by leading e-commerce players. These include grid-based modular layouts that enable dynamic personalization, behavioral nudging tactics that encourage conversion, and immersive visual content that brings the travel experience to life before booking.
McKinsey research on global airline merchandising capabilities reveals clear differences between top performers and lagging players. Top-tier airlines allocate 3.5 times more data and analytics resources and 1.7 times more integrative talent to merchandising, compared with lagging players. Notably, 63 percent of top performers optimize for customer lifetime value as their primary KPI, while none of the lagging players do so.