Is this the final countdown?

It might have survived the dotcom crash, but cut-price travel and leisure site now faces a threat from the many similar brands that have crowded the market. By Rufus Jay

Time is ticking for, the erstwhile survivor of the first dotcom boom and bust. A decade after launching, the once-innovative last-minute travel and leisure website faces a plethora of me-too competition in an arena swamped by brands.

As Venture Three creative strategist Alfie Tonge says, whereas once lastminute was unique, now it is easy to find cheap deals from a number of sources and providers. “It needs to revitalise the brand and move away from this cheap flights and holidays image,” he says. “It offers a lot more.”

According to observers, it has some work to do, having – in the travel space at least – ceded ground to rivals. It was the third biggest travel site in the UK in May, according to Nielsen Online data. attracted 2.5 million visitors during the month, behind Expedia with 2.8 million and Expedia-owned with 2.6 million.

Eddie Stableford, chief executive at branding consultancy Bryt, says the brand has lost much of its appeal: “People are much more web savvy now, and I don’t think their offer appears as attractive as it was. A lot of people do stuff individually, book the flight and the hotel separately, so these sites have to deliver some fantastic deals.”

The brand was founded by Brent Hoberman and Martha Lane Fox in1998, floating on the London Stock exchange just 14 months later with a staggering valuation of £400m before suffering – yet surviving – when the dotcom bubble burst soon after. Sabre Holdings, owner of Travelocity, bought it in 2005 for just over $1bn (£573m), to be itself bought a year later by US private equity companies Silver Lake Partners and Texas Pacific Group for $4.5bn (£2.2bn).

Soon after a raft of new appointments were made, including that of former Motorola and Honda marketing director Simon Thompson as chief marketing officer in April 2007. L ast week the brand launched a review of its £4m advertising account. Farm, its incumbent of some two years, is not repitching. Its attention has turned back to the brand challenge after a period of internal restructuring.

The review is being handled by Suki Thompson, founder and managing director of intermediary Oystercatchers. She says: “The last piece in the jigsaw is advertising. There were the internal changes and now they are ready to express that to customers.”

Thompson also says there are likely to be changes in the way lastminute conducts its advertising, saying that previously, the strategy has been short-term and tactically focused. “To have two weeks to conduct a brand campaign was normal,” she adds.

Internally, the company has been focusing on its European footprint, deciding where lastminute and Travelocity should sit in each country and how much – if any – investment should be put behind each. Furthermore, there has been a lot customer relationship management to help it understand its audience, as well as an increased focus on media measurement. Thompson says was an innovator, “but they stopped innovating”. “What they are doing now is bringing that innovation back,” she adds.

It is a feeling shared by John Bevan, UK managing director of sister brand Travelocity. He insists that the lastminute brand is performing “really well” with massive brand awareness. However, he admits that the brand can be hard to categorise as, alongside its holiday deals, it is also the leading UK retailer of theatre tickets and offers gifts, flowers and “experiences” too.

“We are a bit different we don’t sit in any one category. This means our competition is wide and varied,” He adds. “Our competitors are big online tour operators, Expedia, Opodo and Thomas Cook, but then you have Ticket Master, for tickets while not many offer spa treatments and pampering.”

Travel accounts for the bigger part of the revenues at around 60%, although lifestyle garners more overall transactions. Bevan continues: “That creates loyalty and customers who want to shop with us. We believe people can live a lifestyle through the site.”

Yet one competitor, who did not want to be named, suggests that such a varied offer does not help lastminute. “They need to identify what their brand stands for – it seems to want to be all things to all people,” he says. “Is it travel or lifestyle?”He says that as a travel website the brand has lost share – Hitwise data showed that in July last year it had 6.49%, behind Thomson and Expedia. This June it had around 5%. He adds that it has been trying to right the business but that that has taken the edge of growth.

Paul Jeffrey, managing director of Farm, says that Lastminute’s differences are key to its success and that the brand is performing “fantastically well”, although it now operates in a tough retail environment. “This is the original dotcom brand plying its trade in a cut throat retail market,” he says. “With a sexy dotcom brand and the dirty retail market how do you marry those two together?”It’s a question that no doubt lastminute has been asking of itself. Having put its house in order it must hope that, through such tools as advertising and marketing, it can win back market share ceded to its newer, less-seminal rivals. 

Facts and figures 

  • is the UK’s most popular travel and leisure site with around 2.5 million visitors every week.
  • It is the largest retailer of West End theatre tickets, selling one in every ten seats sold – more than 1.5 million tickets every year.
  • It sends over 750,000 people on package holidays each year. It offers hotel rooms from 80,000 properties worldwide and flights from across 300 airlines.
  • It was founded by Brent Hoberman and Martha Lane Fox in 1998 and floated on the London Stock exchange 14 months later, valued at £400m.
  • Sabre Holdings, owner of Travelocity, bought it in 2005 for just over $1bn (£573m). The following year US private equity companies Silver Lake Partners and Texas Pacific Group announce they are to buy Sabre Holdings for $4.5bn (£2.2bn).



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