Will Travelocity’s position as the independent traveller’s choice suffer from the marketing link with Lastminute.com? By Jonathan Harwood
The acquisition of Lastmin- ute.com by parent company Sabre has left online travel company Travelocity at a crossroads.
After Sabre Holdings snapped up Lastminute and positioned it as its lead brand across Europe, Lastminute marketing director Mat Hart took the top marketing job across the expanded operation in the UK, and Travelocity.co.uk marketing director Charlotte Harper left. Stuart Parish now heads the UK marketing team, reporting to Hart.
Now Travelocity, which reported revenues of $503m (&£283.73m) in 2004, is adopting the same tactics as its sibling, consolidating its media planning and buying into Smarter Communications (MW last week).
Travelocity had achieved high awareness thanks to the Alan Whicker-fronted “Hello World” ads. But the veteran presenter was absent from the latest round of ads, and Travelocity has opted for Lastminute’s approach of hiring creative agencies ad hoc.
Some fear the move could mean Travelocity will adopt a more reactive strategy. One analyst says that if brand-building communications are abandoned, Travelocity could drop off the radar in a competitive market.
Yet Travelocity, though smaller than its rivals, has carved out a niche: it attracts holidaymakers looking for something unconventional. Its marketing has targeted “travellers” rather than holidaymakers, and attracts people who want the freedom to explore independently.
One travel industry expert says this “pioneering spirit” means Travelocity occupies a different space to that held by rivals such as Expedia and even Lastminute. Expedia offers tailor-made solutions, while Lastminute “does exactly what it says on the tin”, according to the observer.
Lastminute’s Hart believes Travelocity’s strength lies in its experience of bookings and product knowledge in the US, while keeping an element of personality. “Which is why the Whicker campaign worked so well,” he adds.
However, despite Travelocity’s success in brand building, it remains a niche operator – hence Sabre’s decision to install Lastminute at the helm last summer. Hart explains that Sabre bought Lastminute in order to achieve a larger brand presence in Europe, but wants to keep the two separate because of their “unique positions”.
Hart explains that while Lastminute is very much a travel and leisure retailer: “Travelocity comes from a slightly different place. It is purely a travel business and it has a high level of expertise in areas such as flights and hotels.
“It is strong on the US as a destination, and long-haul. In terms of the sort of holidays it sells, there is a high percentage of multiple-destination and tailor-made products.”
He adds that when the two company’s databases were compared, there was only a small overlap, and it was decided that because they were operating in quite separate markets they would adopt a multi-brand strategy.
Hart points out that Sabre owns several brands and that the Lastminute group operates a further 11, including holidayautos.co.uk, deckchair.com and ifyouski.com.
“We are continuing to run the two brands because we do see opportunities for profitable growth in different segments of the market – but as a company we have combined the businesses,” says Hart.
He explains that some marketing functions are centralised, but says each brand has its own dedicated team: “We have a UK group marketing area that runs all the brands and a dedicated team for each brand. The guys are champions of their brands.”
A similar system now exists in the advertising arrangements, with buying centralised into Smarter. “We have centralised media buying and that has clearly given us economies of scale and a good level of visibility,” says Hart. “On the creative side it is a different story: we work on a project basis with agencies and the brands have their own arrangements.
“We have decided not to carry on using Alan Whicker, but we have kept other elements of the campaign, such as the slogan.”
Although Sabre decided to keep Travelocity a separate entity, some observers wonder whether it will be able to retain its character, and what effect it will have on its relationship with its American arm.
Travelocity.co.uk now has more in common with Lastminute than with the company of the same name in the US. “The people who work on Travelocity view themselves as part of the Lastminute UK team,” says Hart.
But as one analyst comments: “Sabre is very marketing driven in the US. If it doesn’t see sales growth it will want to know what has happened to the brand over here.” That puts pressure on Lastminute to prove its marketing culture can deliver for the newest part of its business.
â¢ March 1996/ Travelocity.com launches in the US.
â¢ November 1998: Travelocity.co.uk launches.
â¢ January 2004: Travelocity launches “Hello World” campaign with Alan Whicker in London and Scotland.
â¢ January 2005: Hello World is extended to national coverage.
â¢ July 2005: Travelocity, through its parent Sabre Holdings, announces its intention to acquire Lastminute.com. It eventually buys the company for &£577m. Lastminute.com is installed as the lead brand in the UK and Europe.
â¢ December 2005: Travelocity.co.uk marketing director quits after Lastminute.com marketing director Matthew Hart assumes overall control of marketing across all Lastminute.com’s brands. Stuart Parish heads Travelocity.co.uk marketing team.
â¢ January 2006/ Redesigned site is launched for Travelocity.co.uk as media planning is handed to Smarter Communications and ads run without Alan Whicker.