The captains of Britain’s troubled travel sector gathered last week in Gran Canaria for its annual industry conference. But for the sector, which had previously declared itself “recession proof”, there was no holiday atmosphere.
At the Association of British Travel Agents convention, most agreed that the immediate outlook was gloomy, though the consensus was that wise spending now would hold operators in good stead before a recovery took place. Mark Pragnall, managing director of The Centre for Economic and Business Research warned that the economy would be stagnant for the next 15 months.
But British Airways chairman Martin Broughton emphasised that, despite fears of an oncoming recession, it was “not the time to cut on marketing spend”. Broughton, also president of the CBI, encouraged agents and operators alike to have a distinctive brand proposition, stating that in the current financial climate consumers feel more secure with brands they know.
Many companies cited the need to keep spending and to innovate in order to keep cash-strapped Britons going on holiday.
Factors such as the collapse of companies like Zoom airline and most recently XL Airways may tend to make consumers wary. Virgin Holidays is predicting that high street travel retail outlets will “emerge stronger” as a result and will focus on “securing relationships” with high street travel retailers.
In contrast, Lastminute.com insists that more people are going online. Like many others, it plans to focus on niche areas, where it can have a clear message, intended to convey value to the consumer. Lastminute.com UK vice-president and managing director of consumer brands John Bevan says: “As short breaks are more popular in today’s tough times, we are aggressively marketing our lifestyle products.” Forthcoming marketing from the company will focus its offer of theatre and cinema tickets and other entertainment deals.
Distinctive offers Some industry experts believe that consumers want to feel that they are getting both value and a depth of experience, and operators should promote their most distinctive offers.
Hoseasons, the self-catering holidays provider, has launched a new proposition of UK city apartment breaks, in contrast to its regular offering of resorts, cottages and hotels.
The UK cruise industry posted growth of 18% in 2008, according to industry body the Passenger Shipping Association. Despite that healthy figure, the PSA warns the sector that it must not meet a recession by slashing prices but instead upgrade the value it delivers.
Some cruise operators are investing in innovative products. Royal Caribbean Cruise Lines is highlighting salsa dancing, sporting activity, celebrity chef cuisine and children’s classes within cruises, while Fred Olsen Cruise Lines is offering consumers onboard celebration and anniversary packages.
Carnival Cruise Lines UK chief commercial officer Peter Shanks advocates a more scientific approach to marketing, using “customer classification”. Shanks says: “The concept of promoting cruises to older people is clichéd.”
Ad campaigns The UK’s largest holiday operators, Thomas Cook and TUI have been running ad campaigns designed to reassure consumers in the wake of the XL collapse, with Thomas Cook playing on its long history. TUI-owned brands Thomson and First Choice are in the process of redefining their brand strategy, segmenting consumers and business travelers with First Choice aimed firmly at the family market.
Developing strong brand identities is the ongoing theme for travel operators, regardless of company size. Also key is reassuring consumers that, despite the financial chaos and some operators going bust, they can have confidence.