As a follow-up to our “Skift Forum Europe 2018 Part 1: Europe Back From The Brink” post, this April, Skift hosted its second Europe Forum in Berlin. Trying to manage tourist and citizens’ expectations, Berlin has been grappling with its response to disruptors like Airbnb, and for that reason alone, the city offered a fitting backdrop to a conference where discussions so often careened towards the “disruption” topic.
Reinventing packaged holidays
Packaged holiday tour operators are often seen as the ‘dinosaurs’ of the travel industry, but Peter Fankhauser, CEO of Thomas Cook Group, and Sylvain Rabuel, CEO for Europe and Asia at Club Med proved this stereotype wrong.
A big step that Thomas Cook has made is to individualise package holidays. Rather than seeing the consumer as a “mass” tourist or “PAX”, the company has put a lot of effort into understanding the consumer. As Fankhauser noted: “We need to put ourselves in our consumers’ shoes, but our customers are not wearing shoes, they are wearing flip flops”. In an effort to give consumers what they want, the company is moving away from standard 7 and 10 day beach holidays, no longer segregates tourists by their country of origin, it has closed the majority of its high-street stores (from 2000 to less than 1000), and is focusing heavily on online and mobile. This is a sound strategy, as research by Euromonitor International shows that dynamic packaging is the growth area within packaged holidays.
Club Med is similarly reinventing its offering for a younger clientele. Rabuel explained “we were the most expensive player in the mid-market segment, which is an uncomfortable place to be. Now we are the most affordable option in the luxury market.” 85% of the company’s hotels are now 4 or 5 star, which was only 25% 10 years ago. This does not, however, mean that the company has lost sight of the price-conscious consumer. Club Med now offers a tool on its website to compare the difference between an all-inclusive holiday and booking each aspect separately, with the former being cheaper in 85% of cases.
Club Med is also in a good position to benefit from the increased focus by tourists on experiences. For Club Med, experiences have always been a core aspect of their offering, with more than 60 activities and classes offered at each resort.
Travel platforms betting on ‘experiences’ for future growth strategy
‘Experiences’ is a hot topic in the travel industry and was widely discussed at Skift Europe 2018 with traditional accommodation platforms such as Airbnb, Booking.com and even Marriott International making a play in this area. This is no surprise as Euromonitor International data illustrates how attractions is an untapped category in terms of online penetration with the offline channel accounting for the vast majority of sales.
Tao Tao, Co-Founder & COO of Get Your Guide thinks online sales in attractions are low due to lack of awareness. “Consumers don’t associate a site where you can book experiences or attractions, the consumer thinks about the activity they want to do but not what brand they will book it from”. Airbnb are aiming to reinvent the way consumers book activities in the same vain as they reshaped the short-term rentals industry with the company’s EMEA Managing Director Jeroen Merchiers telling Skift that they hope to roll out their ‘experiences’ platform to over 1000 cities by the end of 2018. Merchiers also spoke of Airbnb’s ambition to be a platform which caters for everyone and helps consumers ‘belong everywhere’. He believes activities are a big differentiator in delivering a personalised experience for their users.
Pepijn Rijvers, Chief Marketing Officer of Booking.com is a believer in the potential that intermediaries can have to remove the frustrations that consumers face when booking and collecting tickets which is why they acquired FareHarbor – an online booking software start-up – to provide this service to consumers post-booking of accommodation. With Euromonitor International estimating that less than 7% of attractions were booked online in 2017, there remains huge potential to unlock in terms of offering the consumer a more seamless experience.