Companies in the travel industry that are thriving rather than merely surviving are those that understand how today’s customer is seeking value as opposed to just the best price.
A WTM working lunch hosted by digital agency Designate heard from Richard Carrick, former Hoseasons chief executive and now a consultant for a number of firms in the sector.
He said there had been a permanent shift in customer behaviour in the last five years that has not been seen before.
“People in the old world wanted lowest price; now we are preoccupied with the concept of best value. We have a value-oriented consumer who we can talk to in a range of different ways.”
Carrick said the traditional sales funnel had been turned on its head by modern ways of engaging the customer through social networks and other more personalised forms of marketing.
“Tui [Travel] is one of few tour operating brands who have got this right,” said Carrick. “They have recognised that the customer is working in an entirely different eco-system.
“The way we buy holidays and travel has evolved from something that was relatively straightforward and simple to a situation in which everybody is trying to sell travel to the consumer.
“Whether or not you are an airline or hotel selling direct, a tour operator, an agent or a meta-search site, the mix is becoming incredibly complex.
“There is no shortage of marketing investment but not a lot of it is spent in the right place. You need to embrace the entire funnel – the paid, owned and earned forms of media.
“Focus on what it is that gets customers into your business. Very few companies make customer acquisition and retention the true cornerstone of their business.
“Who is mining the data you have on your customers? It’s a full time job for someone in your organisation to do that.
“Some companies are doing this but very few travel companies are at the forefront of this activity. You need to sell what the new customer wants to buy.
“Travel companies are very poor at being innovative. How many have been successful in bringing products to the market that are truly innovative?
“It’s good if you’ve got unique product, great if you have fashionable product, but fashions die out.
“Do you make new product development a fundamental part of your organisation in the same way that some of the companies that are thriving do?”
Carrick said many of the firms he sees are today simply in survival mode, doing no more than is required to carry on “bumbling along the bottom”.
But he said there was no excuse for a lack of innovation, particularly from firms that own the assets.
“If you look at the casualty list of British companies that have not survived [the recession] there are a lot of them and a lot more will come. But, of course, some are thriving.”