New departure for tour firms?

This year has been disastrous for the tour operators. Having over-estimated consumer demand for mass-market package holidays for summer 1995, their problems were compounded by the unexpectedly good weather which turned rainy Margate into the climatic equivalent of Marbella and encouraged Britons to holiday at home.

The travel industry’s year-round policy of discounting seems to have backfired. It has eroded already tight profit margins, and Airtours and the Thomson Group have issued profit warnings. As a result, new short-haul brochures for summer 1996 – which hit the travel agencies’ racks two weeks ago – included a ten per cent price rise. Hours later, the large travel agents – some of which are owned by the tour operators – announced discounts of 15 per cent, repeating last year’s discounting pattern.

It is a pattern that has gone on for years. And it is dispiriting for consumers who book early, only to see the holiday of their dreams available more cheaply later on. But they have begun to anticipate the waves of discounting and are changing their booking patterns, committing themselves later to exploit the desperation to fill plane seats and hotels.

And it is these canny holidaymakers that are forcing change. For so long tour operators have been complacent. As industry sources admit, it’s an incestuous business as the same old faces move from company to company. Consequently, there is little fresh thinking on how to improve the industry. Consumers have been treated as little more than a commodity, with holidays sold like tins of baked beans or toilet rolls. People are packed into the same aircraft and the same resorts by all the operators.

Tour operators claim that they are sorting out their problems by investing in branding to differentiate their products from those of rivals and by launching new deals. Airtours is offering pre-bookable duty-free and pre-bookable airline seats and is empowering reps to move disgruntled customers to new accommodation while they are on holiday rather than offering an apology on their return. First Choice has launched a brochure for the Mediterranean featuring an “all-inclusive” programme which bundles in everything from entertainment to ice creams.

But although the products are different, analysts say that tour operators face a long struggle if they are to break the late-booking mentality that consumers have adopted. They add that it is the operators themselves who created the vicious circle.

Latest from Marketing Week

PLEASE SIGN IN OR REGISTER. IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and inspiration that will help you develop as a marketer and leader.

Register and receive the best content from the only title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work, so we can make Marketing Week more relevant to you.

Register now

THE BEST CONTENT

Our award winning editorial team and columnists will ask the biggest questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we will be your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Dedicated to developing your skills and helping you achieve marketing excellence. Find guidance on leadership, professional development and the latest industry jobs.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here