Big Interview: Tui is accelerating on road to technological new age

Big Interview: Tui is accelerating on road to technological new age

When you’re one of the giants of the travel industry, seeking plaudits for your approach to technology and innovation is often met with a degree of scepticism.

Firstly there’s the widely held presumption that established players are weighed down by legacy systems and innately lack the agility or speed to take advantage of advances in technology.

Then there’s a dual issue: being accused of PR spin rather than substantial action on the one hand and on the other the ‘so what’ response – ‘large, well-funded firms are expected to be doing this, aren’t they?’

These are perceptions that hold little water with Johan Lundgren, Tui Travel deputy chief executive, who last week invited Travolution to hear about how Europe’s largest travel group is making strides to truly embrace the technological age.

When Thomson and First Choice merged in 2007 to form Tui Travel Plc, technology and “being online driven” were placed at the heart of the development strategy, Lundgren said.

“We are now in a position where a number of those initiatives that we have been working on are coming together.

“We see the advantage that we have is we have an opportunity to work in a seamless digital way throughout the whole consumer journey.”

Central to this is the recently launched MyThomson app, which has already far exceeded all expectations Tui had for it, having seen 86,000 downloads. The target was 50,000 by the autumn.

It is through this medium that Tui sees it driving up the volume, frequency and intensity of engagement with a customer base it may only deal with once a year, or every other year at best.

“The difficulty we always had compared to companies that sell everyday items like supermarkets is how to maintain that relationship, to keep it fresh so each time we don’t have to start all over again.

“Our relationship with the customer has been focused on the search and booking phase but from when that customer makes a booking to when the plane takes off we are in constant dialogue.

“What we will be able to do much more in the future through the app is to personalise that whole experience.

“We know customers use social media extensively when it comes to travel. This is taking place during and after the holiday so we clearly have an opportunity to continue to relate to people.

“We’re about to crack that because we’re building a lot of systems and a lot of functionality to have this two-way communication to enhance the lifetime value of the customer.

“The app will evolve. This is something we will develop to become that communication tool to have that really deep knowledge of what you as that individual customer wants from us.

“We have to assume that in the future customers will not necessarily search for us, we have to makes sure we go and find our customers when the timing is right.”

Developing an app is all well and good and for outside commentators falls into the category of ‘it would be surprising if Tui wasn’t doing that, wouldn’t it?’.

But Lundgren said the app was just one outward manifestation of a deeply engrained company-wide approach to technology advancement that has its roots right at the core of the firm.

Tui believes due to its reach, with its 800-strong estate of retail shops, exclusive resorts and reps, that it can join the dots between the physical and digital realms of providing holiday experiences.

A recent pilot in Cyprus to supply its in-resort reps with iPads in order to facilitate that communication between its experts and its customers is a sign of that thinking.

Enhanced connectivity and digital product displays in next generation Thomson concept stores will also ensure high street agents play more of a part in this approach.

Lundgren talks about Tui taking an “open source” approach, opening up the company and its 54,000 employees through technology to put customer service at the forefront of everything it does.

“If you look at some source markets where we have come furthest in this area there is not a single person not expected to have some consumer service role,” he says.

“Whole management teams have their mobile numbers on the internet. This is where corporations have to go because people like to have this sort of interaction.

“When we’ve had debates about this internally we’ve recognised this was scary because how can you control people to engage in certain ways.

“But an open source company does not mean anarchy. You have to have clear customer relationship management. It means utilising your resources around what your customer wants to do.”

Lundgren believes Tui Travel is ahead of the game in exploiting the opportunities of Big Data, a tech industry buzzword but one which does refer to a genuinely new approach to data when done right.

Group chief information officer Mittu Sridhara, who joined from Ladbrokes having previously worked at Sabre, American Airlines and Avis, is heading up Tui’s overall IT strategy.

Keeping the core in-house, but also working in partnership with technology partners in places like Silicon Valley, Tui says it is approaching the end game for its old legacy systems.

Underpinning all it does is a new proprietary reservation and selling system called Phoenix which Lundgren said has enabled the company to evolve more rapidly.

“It has enabled us to accelerate the journey to do more on mobile and social media which we could not have done without Phoenix.

“And it means we can develop once and use the scale to roll it out throughout our source markets. It will become a very cost-effective solution.

“This is tremendously exciting, the opportunity to work in an agile way. Speed will be increasingly important,” said Lundgren, who added the MyThompson app was developed in just 14 weeks.

So the talk is all very compelling, and you can see from the public pronouncements from some Tui rivals that telling a good technology story can win you credit where it counts in the City.

But Lundgren said only if there is real substance behind what you say you are doing can you expect to get the credit you deserve.

“We have been doing this for a long time. We are doing this because it’s an embedded core strategy in our business.

“Every company has to explain what it’s doing and why it’s doing it but not without having the true development behind it and those things actually working.

“Yes, we can do gimmicks, but we always think about how this integrates in the whole seamless customer experience ethos.

“Customers should not feel that this is complicated, they should engage in a natural way, that we know their preferences and what they want sometimes before they do.

“Thomson is one of the leaders in this but this is a road that does not have an end. We do not need an end view because things will evolve and customer preferences will evolve.

“But on this road there will always be some elements that never change; it has to be seamless, integrated, engaging and inspiring, and for us it has to be unique.”

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