Ryanair is launching a holiday service that it says will make it it “the Amazon of the travel industry”, providing its 119 million customers with flights, accommodation and transfer packages. However, the airline says the move will not affect its no-frills brand positioning, with CMO Kenny Jacobs promising it will still be a “bastard on cost”.
The airline has partnered with tour operator Logitravel and accommodation site World2Meet to create the service, which is currently operating in the UK, Ireland and Germany. It will continue to expand its service by increasing its accommodation providers to five by the end of March.
The move comes after the airline says it saw an “obvious” gap in the market, with 25% of its customers already booking their own package deals elsewhere.
“We’re not looking for new customers, we’re looking to our current customers. We have 30 million of our 120 million customers already booking Ryanair air flights as part of a package experience,” Jacobs tells Marketing Week.
Jacobs compares the new venture to Ryanair becoming the “Amazon of air travel”, as he says the fact it is the most visited airline site in the world and people always start with flights when it comes to booking, stands it in good stead.
Our core business is still the core business – having the lowest fares, being bastards on cost and winning market share from the competition.
Kenny Jacobs, Ryanair
He says the move is part of the company’s digital transformation and a recognition of the diverse needs people have when it comes to booking holidays, as some people may want a cheap flight with a 5* hotel, or a 3* hotel but with expensive air transfers.
Despite the offer of more luxurious hotels, one of which Jacobs says he himself has packaged with a Ryanair flight for a trip to Barcelona, the company says it is not losing site of its main goal and Ryanair’s vision of being “all about costs”
“Because of our flights, which are on average £35, the package will be considerably cheaper – in the range of 10% up to 25%,” Jacobs says.
“Our core business is still the core business – having the lowest fares, being bastards on cost and winning market share from competition, and we’ve done that better than anyone in the business.”
When asked whether Ryanair is diversifying too far away from its core business, Jacobs says that is a question the company asks itself every day, but that it has proven itself with its digital transformation over the last few years, having increased its annual traffic from 80 million to 120 million. And he says that it wants to win out over tech giants such as Google in the travel space.
“Half of the online travel agencies that exist in the UK today will be gone in the next two to five years and we’re going to go after that market. Google has big eyes for that market and Amazon would be silly not to too. We want to lead that and be part of it. We’ve earnt our digital stripes,” Jacobs says.