The tour operators try repackaging holidays

As specialist tourism booms, the large operators are attempting to muscle in with lifestyle-oriented brochures. Branwell Johnson investigates the trend

Survival depends on evolution – this is a mantra increasingly taken to heart by the package holiday industry, where major players are recognising that consumer needs are changing and that consumers want holidays to match.

Thomas Cook is the latest travel operator to embrace a sales and marketing strategy designed around consumers’ lifestyles, as opposed to specific holiday destinations. The company is searching for a director of customer marketing and strategy to implement this new approach (MW last week).

But some observers claim that Thomas Cook is playing catch-up as all the major tour operators target life stages and lifestyles, with products aimed at families with young children, families with teenagers or young couples. They sell activity holidays and cultural experiences, as well as ordinary package tours. TUI-owned Thomson Holidays launched its Gold Brochure, offering holidays exclusively for couples, as early as 1995.

Thomas Cook, though, claims it is breaking new ground. It points to its direct-sell brochure Blue Sky, launched last July, which is segmented by lifestyle rather than destination. Blue Sky managing director Simon Russell claims “every other holiday brochure is laid out by destination”.

Thomas Cook director of customer strategy Paul De-Latt says: “We want to help people with the key question: ‘What do you want to get out of your holiday?’. You will see a shift in our marketing towards brands.”

Despite the move towards lifestyle products, travel companies are unlikely to abandon their core destination-driven sevenand 14-night packages. These products deliver large sales volumes and the resulting economies of scale make their operations profitable.

However, the major tour operators are aware that this “one size fits all” approach needs modifying, given consumers’ increasing tendency to put together their own holiday packages. The big four operators – TUI, Thomas Cook, MyTravel and First Choice – are developing new ways of presenting and marketing their products to meet this trend.

Recognising that the independent specialist operators have rising bookings and are chasing customers aggressively with lifestyle-oriented products, the large operators have gone on a shopping spree, buying up many of the niche companies.

Michael East, leisure travel analyst with leisure and travel consultancy Eastcastle, says that these niche businesses have been integrated with varying degrees of success and that First Choice is acknowledged as the expert in this area, having managed to buy businesses without diluting their specialist appeal.

Tour operators can no longer treat holidays as commodities, selling on price alone. They are having to increase the role of marketing within their organisations and learn about such matters as customer relationship management. As East says: “Once you go down the niche route you are into ‘markets’ rather than ‘sales’.”

But the independent niche operators are fighting back. Mark Warner, which offers activity holidays, will launch its biggest advertising campaign so far in January and has set a tough sales growth target of 30 per cent. The company has also recognised the need for closer targeting of customers, and has appointed a customer retention manager.

Industry consolidation and a move by the large holiday companies to integrate their retail and tour arms more closely has also led to changes in the way that the big four market their holidays. One observer claims that the major tour operators now sell up to 80 per cent of their products through their own outlets, compared with about half five years ago. The other half would have been sold by independent travel agents or retail outlets belonging to rival operators, which would have built up their own customer databases. The major operators are now busy gathering customer information through their own shops, in order to profile and target customers more effectively.

They are already making more use of newspaper and magazine advertising to reach specific groups, such as young families or couples. ABTA research shows that travel industry advertising spend increased by two per cent in the year to the end of August. While spend on television fell from £95m to £70m, spend on newspapers and magazines increased by £4m to £197m. Much of this is tactical work based on price, but the mass-market tour operators are now using certain newspapers, such as The Times or Mail on Sunday, to target specific demographic groups.

It is likely that holiday companies will also make greater use of direct mail and marketing alliances. Cosmosair has just piggybacked the Next Directory mail-out, with a tailored holiday brochure. Marketing director David Burdon says the partnership gives the company a chance to reach 1 million potential customers who are fans of Next’s aspirational mass-market brand. He adds: “It is really about trying to dress up a product which has not appreciably changed in 20 years, to appeal to various life stages.”

Despite incorporating lifestyle considerations into their marketing, tour operators accept that for many people destination remains the main factor in a holiday purchase. First Choice marketing director Sam Turnbull warns against over-selling lifestyle products, because when the customer reaches the resort “it’s still a hotel with kids in the pool and families around at certain times of day”.