Cosmos is now treading a careful path in the online world – an area where it believes it can become a significant player. David Bicknell reports.
It’s often said that when one door closes, another opens. That could certainly be said of the revitalising effect of the Internet on the Cosmos Group.
The group, which comprises sister company Cosmos Holidays, flights specialist Avro, Israel travel specialist Pullman and Monarch Airlines, is the UK’s largest independent travel group, and part of the international company Globus Travel.
The possibilities of selling direct via the Internet has had a disruptive effect on Cosmos’ traditional brochure-based business, but rather than bemoan this, Cosmos has embraced the online world.
That is not to say the Swiss-owned, privately run company has found it easy. Like all holiday providers, it has also had to come to terms with the aftermath of September 11 2001, and the seismic shift in customer choice from the Western to the Eastern Mediterranean.
But what the company’s management believes is that in its struggle against its traditional rivals – the big four of Thomas Cook, Thomson, MyTravel and First Choice – the Internet has created a level playing field, on which number five-ranked Cosmos believes it can bring its skills to play.
The possibilities offered by the web have undoubtedly made Cosmos more flexible and responsive, according to commercial director Stuart Jackson.
He says: “From a strategic positioning, two or three years ago we wouldn’t have been sure the business was responsive enough to capitalise on any fast moves or changes in the marketplace. Like others, we were reviewing what was happening and wanted to ensure the business had the ability to be reactive and adaptive.”
Cosmos’ first task in its Internet-inspired renovation was to look at how it purchased its products and ensure it wasn’t “highly risked” in any way.
“Previously, the old tour operating model said you would travel overseas, guarantee the beds and the aircraft and you’d commit to the whole shebang,” Jackson says. “So when September 11 occurred and things shifted to the Eastern Med, we were locked into long-term commitments. We wanted to de-risk ourselves, and we’ve gone from something like £30 million worth of guaranteed commitments five years ago to less than £5 million today.”
Cosmos’ second makeover was about managing its technology. Like many other operators, Cosmos was mired in legacy-based computer systems that were built and Cobol-programmed between the 1970s and 1990s.
To be more reactive and responsive, it needed more flexible systems to compete with the new kids on the block, the web-based travel providers, who did not have to pre-manage inventory on ageing systems. Cosmos’ new IT environment had to cope with a market that was changing, in which consumers were shopping around, researching online and booking via the telephone.
Cosmos also had to adapt to the way retailers wished to interface with the organisation. So it developed XML communication for its own front-end environment and its retail partners.
That meant it could work with intermediaries such as Comtec, Dolphin and Ramesys, who wanted to take Cosmos’ availability and communicate with retailers via XML rather than viewdata, so they themselves could operate and distribute on the web as well as on the high street.
The next stage for Cosmos was to be able to provide a one-stop-shop for its key brands: Monarch, Avro, Cosmos Holidays, accommodation-only brand Somewhere2stay.com, and its escorted touring specialist Cosmos Tourama.
Jackson says: “We wanted to be in a position where we could sell all of our product in one place. So we had a choice – either develop the technology internally or look for a third party to work with. We chose the latter.”
Cosmos chose IT software supplier BlueSky Travel Systems, to amalgamate all of the group’s content and distribute that content to retailers and to its own websites, through XML technology.
Once the busy January/February booking period is over, Cosmos plans to go live with a revised system, distributing all of the group’s content via XML to all its partners, and work with them to dynamically package that content.
Jackson explains: “We are utilising Cosmos Group’s product lines, amalgamating them and allowing them to be distributed in one environment. It also enables us, via Cosmos.co.uk, to move away from being Cosmos the operator, to being Cosmos the travel provider.”
What Cosmos believes the web has also done is reduce directional selling, allowing it to be more competitive.
“If you have the content on your site consumers will purchase it. But on the high street, you can be directionally sold away. The web has given us access to customers to be able to sell our wares on an equitable basis,” says Jackson.
Cosmos marketing director Ali Naqvi says the web offers a big opportunity for Cosmos, a smaller organisation than its rivals and unlike them, not City-owned, and he believes it should be more responsive to the opportunities.
Naqvi says: “Consumers think they know how much a hotel, a flight or a holiday costs, and they’ll go online and search. If your website doesn’t function in the way they want, they’ll go elsewhere. There is no relationship with an agent or someone at a call centre.”
However, what Cosmos does recognise is that the success of the direct model relies on loyalty and repeat business. “You’ve still got the acquisition costs of finding a client, either through online activity, search term purchasing, or offline, through advertising. Acquiring new customers is getting increasingly expensive,” Naqvi explains. “Brand loyalty isn’t so high and so you’ve got to ensure you have the repeat business.”
The responsibility to get Cosmos’ technology falls to IT director Alister Beveridge, who now has around 10% of the organisation’s workforce at his disposal, working on e-commerce solutions. Within a year, that percentage is likely to be 20%.
He says: “All of it is critical, from the look and feel, right through to the mechanisms that deliver content. It’s about trying to capture and create products inside websites that suit the widest possible range of customers.”
Developing and maintaining Cosmos’ websites is an ongoing task. Jackson says: “We rebuilt Somewhere2stay 12 or 13 months ago; we rebuilt the booking part in August/September last year, and at the end of next month, we’ll probably launch the third or fourth reincarnation of the site.”
Naqvi adds: “It’s content-rich, with bookability, e-brochures, video-streaming and all the rest.”
And it’s not just about the Internet. Like many organisations, Cosmos is trying to bet where the next technology shift will take it – the Internet, interactive TV or mobile phones. “We want to make the business responsive. We’re already the first player to provide bookable content via mobiles,” says Jackson.
For Beveridge, his technology challenge is to deliver what the business requires within cost. And search-engine optimisation will continue to be a key area. He says: “Search-engine optimisation is something that evolves continually. In the old days, it was simple: you had a web page and you needed a few tags. Now the big players, such as Google, steer you in the right direction, but the methods they use change all the time, and it’s hard to define exactly what we do need to do in that process. Our traffic for the first six days of January was four or five times higher than it was last January, and much of that will be related to search-term optimisation.”
Despite its success, Cosmos, like others, has learned some hard lessons along the way. “We should have kept the sites much simpler. There was a tendency to make them with lots of graphics. But people are attracted to something that’s efficient and works very well,” says Beveridge.
As to the future, Cosmos expects to get around 25% of its business from online sources, at least matching the big four. It also sees opportunities from the use of electronic brochures or e-brochure downloads, which have now reached 20,000 a month, and around 120,000 in the last calendar year, outstripping conventional brochure requests.
Jackson adds: “It’s about working towards distributing content in a multimedia and multilinguistic way, and ensuring consumers can book whenever they want, through whatever medium they wish.”