The complete package

Thomson Holidays is attempting to position itself as a one-stop shop for the full range of travel products. But how will the brand be affected by the TUI-First Choice merger? asks Rupi Gohlar

Last week Thomson Holidays rolled out the second phase of its repositioning with a £6m campaign that continues its efforts to shed its traditional image as a package holiday brand (MW last week). Thomson says the campaign is a significant investment that aims to illustrate how the company has modernised and now offers flexibility in leisure travel, with products such as flights, hotels and car hire.

The six-week, through-the-line campaign, created by Krow, aims to challenge consumer perceptions of Thomson as a package-holiday brand by emphasising “added-value” offerings, such as its Premier Collection (luxury hotels) and in-flight Aldo Zilli meals. It follows an earlier £8m ad strategy in April, which first showcased the company’s move to a “one-stop shop” and used the strapline “Don’t just travel, travel with a smile”, which also features in the latest strategy (MW April 19).

Critics lauded the April campaign for conveying a variety of messages in different ways. Fox Kalomaski managing director Gary Jacobs, whose agency handled Thomson’s direct marketing for long-haul holidays from September 2004 until January, when DM was taken in house, says the company “is moving in the right direction by following consumers’ lead, concentrating on its website and component offerings, such as hotel and car-hire bookings”.

Thomson claims to be market leader in the UK’s package-holiday market, with a 25% share of the air-inclusive tour operator market and a turnover of £2.5bn. It claims to have held this position since 1974, but in recent times the travel company has been forced to adapt. The rise of online travel businesses, such as Expedia.co.uk and Lastminute.com, and the growth of low-cost airlines forced conventional tour operators to re-evaluate their products and services.

Brewin Dolphin Securities leisure analyst David Pope says: “Thomson did not adapt as quickly as some to the new competition landscape. This was partly due to its considerable size and partly because it operates mainly from Germany and Europe.”

Thomson advertising manager Zoe Dark admits the company is no longer at the forefront of travel as it was a decade ago. She says: “Consumers have changed with the onset of the internet, so we have also had to move with the times and offer what they expect: a wider range of services.”

Thomson operates in a very different UK travel market to the one the Thomson family entered in 1965 (see Facts and figures). In 1998, TTG floated with a value of £1.8bn and in 2000 TUI (then Preussag) bought the entire company to create the world’s largest travel group. Such was the strength of the Thomson brand in the UK, TUI rebranded its UK division as Thomson in 2004.

Earlier this year, parent company TUI merged its tourism business with First Choice to create TUI Travel, which began operating this week and is expected to lead to a restructure of Thomson and First Choice marketing departments. Pope says: “The merger will reduce competition from tour operators and allow it to concentrate on contending with more pressing competition.”

First Choice marketing director Tim Williamson has been appointed TUI UK marketing director, pipping Thomson marketing director Andrew Rayner to the post.

Although the two companies are keeping their brand names, it is unclear how their marketing strategies will develop, yet Williamson’s appointment could signal that change is afoot. As Jacobs says: “It will be interesting to see what happens to the Thomson and First Choice brands once the merger is complete. How will they differentiate themselves?”

Analysts say that key to a successful repositioning for Thomson is striking a balance between providing the ease and flexibility that online travel sites offer, with the personal service of traditional tour operators. Pope adds that “Thomson will only grow by diversifying into specialist fields”, such as adventure holidays. Although rival First Choice has led the way in this area, Thomson is catching up.

Dark says the results from the April campaign, which ran across TV, outdoor and press, have been strong and the latest drive will build on this success by focusing on Thomson’s luxury high-end products.

Last year, the company began to shift from its traditional discount-led approach to concentrate on its online and high street offering with a campaign by DDB London featuring the strapline: “Web prices on the high street”. It also increased direct marketing investment, placed standalone kiosks in Thomson shops and tested interactive store windows. In November last year, Thomson called a pitch and appointed Krow to handle its £15m advertising account, which DDB had held since 2003.

Although observers believe Thomson has made decent progress in endorsing itself as a “one-stop shop” rather than solely a tour operator, it remains to be seen how the consequences of the TUI-First Choice merger will affect the direction the brand takes and how it will differentiate itself from rival First Choice. 

Facts and figures:
Thomson Holidays 

Thomson Holidays is a division of TUI UK, part of Germany’s TUI, the largest tourism and services group in the world, employing 80,000 people in 500 companies. 

1965 Roy Thomson bought Riviera, Universal Sky Tours, Luxitours and Gaytours, and Britannia Airways, which became Thomson Travel Group, from which Thomson Holidays was born. 

1972 TTG bought the Lunn Poly travel agency brand, which was rebranded under the Thomson umbrella in 2004.

1998 TTG floated with a value of £1.8bn. 

2000 TUI (then Preussag) bought the entire company to create the world’s largest travel group. 

2004 TUI rebranded its UK division as Thomson, and Britannia Airways was renamed Thomsonfly – now the third largest airline in the UK. 

2006 Thomson handed its £15m advertising account to Krow after a pitch.

Thomson claims to be market leader in the UK’s package holiday market, with a 25% share of the air-inclusive tour operator market and a turnover of £2.5bn – a position it claims to have held since 1974.

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

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

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big 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 are 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.

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