Travel companies need to grapple with brand building
Travel industry marketers are remaining remarkably upbeat despite feeling the heat from the disruption in Egypt and the Middle East and the economic downturn.
But while the companies say bookings so far this year are up on 2010, marketers agree that there is a lot of work to do on brands and marketing channels in the fast-moving environment in which they operate.
The big challenge for travel brands is to lift themselves out of “the price comparison game”, as Mark Maddock, UK managing director of lastminute.com, called it when speaking at this week’s annual CIM travel industry group (Cimtig) question time.
Travel products have always been a price sensitive purchase and the web has accentuated this trend by adding dynamic pricing and the rise of aggregator and price comparison sites with the traditional tour operator imperative to sell volume.
Maddock said that the travel industry can build brands on trust and piece of mind and people will pay a premium for these guarantors.
Christian Cull, communications director at TUI UK, owner of Thomson and First Choice added that the tour operator “has managed to maintain brand advertising rather than price-led through January” to differentiate its brand and, importantly “the financial director recognised the need to build the Thomson and First Choice brands.”
The travel sector does not give brands room to stand still, as Noel Josephides, managing director of specials holiday company Sunvil, pointed out: “We have never spent as much as we are spending this year. We have spent a lot more money since the recession started. If you don’t then people forget you exist. The biggest problem the smaller companies have is to get their message out.”
The travel industry has taken time to wake up to the fact that the customer owns the brand. Cull, who has worked outside the industry, said: “We work on the protection of our reputation, which is not quite the same thing {as owning the brand} – but it’s the customers’ brand because they pay us for producing the products behind the company.”
Josephides added: “We have always felt that we stand for something. It’s of immense importance to us – far more than profitability – to be proud of what we are doing. If you are going to have a brand then you have got to make sure it stands up to scrutiny.”
For travel companies, the distribution channels are in many cases the marketing channels and this increasingly means investment online. However, Allen Lambert, head of retail sales at Bourne Leisure, owner of UK holiday brands Butlins and Haven, said that traditional media was still necessary to signpost the online offering: “We are putting more of our investment online but we need to generate awareness via TV and press.”
Where holiday companies seem to be lagging behind other sectors, such as Grocery, is in the use of mobile technology. With an estimated 29% penetration of smartphones in the UK the pressure to create formatted websites or transactional apps is growing. Those “legacy” tour operators with processes and systems dating back decades are finding harder to get to grips with the rise of mobile.
But companies with a technology background, such as Teletext Holidays and onthebeach.co.uk, are ahead of the curve on the use of mobile. Chief marketing officer of the latter, Alistair Daly, who was not at the Cimtig event, says: “We are seeing a sea change in how people are booking” and adds that the company now receives about 5% of its traffic from mobile.
Onthebeach.co.uk has plans to create apps to help people make amends to booking once they have booked and provide access to their booking and add / remove passengers and change hotels
Returning to brand differentiation, Cull and Maddock both agreed that their companies were taking advantage of a “halo-effect” from the Thomas Cook ads featuring Jamie and Louise Redknapp on beaches, so the travel sector still has a long way to go to reinforce brand identities in the public mind.
