Strategic alliance between airlines, leading hotel chains, and multiplexes:

Two news items caught my attention.

 

1. Indian carriers, both low-cost and full-service, are revising their in-flight menus to offer passengers a differentiated fare, as competition is heating up amid the boom in air travel with the waning of Covid 19. The need has been felt by such carriers, to differentiate in services like meals, enhance ancillary revenue, and create a distinct space in flyer’s minds, and

 

2. Theatre chains typically get 50-60% of their revenue from ticket sales, and the rest from F&B and advertising. There may be months when no film works. Globally then, F&B and advertising helps de-risk the business. With this in mind, most of the biggies in cinema exhibition business have been investing in food variety long before the pandemic. Further, the need for premium experience for the movie goers at Multiplexes has also created a need for an upward push on F&B spends, which have shown a rise of 20 to 50% across the business. For almost three years now, the 702 screen Inox has had a tie-up with ITC’s ready-to-eat, gourmet brand, “Kitchens of India”. Since the pandemic began, PVR and Inox among others have been retailing their food on Swiggy and Zomato. And over the last eight months Inox has been doing a lot of culinary sessions with expert chefs in their properties. The idea is to convince people that multiplexes can do gourmet food. This in turn has helped F&B revenues.

 

Clearly, these two news items indicate the possibility of a promising strategic alliance between airlines, leading hotel chains which boast of distinct F&B offerings, and multiplexes, with each alliance partner leveraging its respective core competencies, to provide a combined value proposition to their respective target audiences.

 

Besides, exploiting the tremendous opportunities for cross-selling, such alliance partners can also leverage their respective analytics capabilities, and share with each other the insights gained on the perceptions and expectations of their respective target audiences. The attendant benefits would be obvious.