Out with the old, in with the new
Whether it’s the clever marketing or shiny packaging, new products demand our attention. Tech giant Apple has got it figured out, rolling out new versions of its products in blink-and-you’ll miss it succession – and yet they’re hotly anticipated year after year as customers look to cure their insatiable appetite for the latest innovations.
The same goes for the travel industry as wholesalers and operators look to woo travellers with packages that seem too good to pass up. But as consumers grow increasingly wary of marketing hype and PR gloss, the pressure is on wholesalers to reinvent the wheel with new innovations that are one step ahead of the game.
As Trafalgar managing director Matt Cameron-Smith explains, the pressure to evolve is driven by consumer demand, but brand positioning is at its core as wholesalers endeavour to stay front of mind for customers. But the challenge, he says, is to strike the right balance between old and new without losing touch with customers.
“Guests have a certain level of expectation … you can’t just put lipstick on something and call it new – they’re too smart for that. It’s about giving guests something they don’t expect and that they can’t get anywhere else,” he told travelBulletin.
Like any business that relies on bookings, customers hold the power and products are rolled out in response to market demand. But rivalry also keeps new product pouring in as wholesalers and operators look to nudge their competitors with new innovations that win over customers.
Cox and Kings ceo Caroline Kennedy says evolution is central to the travel industry as customers come to expect more unique experiences, but the competition is hard to ignore. Speaking with travelBulletin, she said wholesalers feel the heat from their competitors as they all vie for a piece of the same pie, but rather than be distracted by the noise, she says the focus is on tweaking product that performs rather than product which lags behind. While there’s no golden standard when it comes to strategy, C&K adheres to the 80/20 principle in which 80% of revenues comes from 20% of the product.
“We focus on propriety product that delivers something unique while meeting market needs. We make sure the formula works accordingly and try to improve our product’s performance without compromising on the quality or company revenue,” she says.
The 80/20 rule suggests that sticking to the norm is better for the bottom line, but Kennedy says the need to think outside the box is equally important. C&K’s MasterChef Travel initiative is set to enter its second year in 2015, but as Kennedy explains, it’s still early days and new product is given 2-3 years until it’s deemed a success. Conversely, if products don’t deliver a return on investment by the third year, they are either tweaked in line with changing demand or dropped all together.
Trafalgar adheres to the same guidelines, but Cameron-Smith says exclusivity is key in an industry which is driven by “me too” syndrome. “Having a unique selling point is absolutely critical in our industry when everyone is claiming to have exclusive and unique tours. There’s a lot of noise out there so we have to find tours that are not only appealing, but are genuinely unique and that challenge the norm,” he said.
But he admits change doesn’t come easy. Trafalgar last year severed ties with more tour operators in its history and changed a whopping 200 hotel partners in a bid to shake up its product offering. The company has also cut the single supplement on most of its tours, introduced more free time and slashed group sizes to 26 guests on its Hidden Journeys portfolio following ongoing consumer feedback.
The changes are part of an ongoing evolution, he says, but it also comes down to brand positioning and building a rapport with clients to secure repeat business: “We all need to be nimble and manipulate itineraries to succeed in this climate, and listening to customers is the only way to survive.”
It’s a view that is shared by APT, which would still be a coach tour operator of the 80s if the company hadn’t taken evolution into its stride. Marketing manager Justine Lally says evolution is the only option for travel companies in today’s competitive environment. In fact, she says customers demand it and wholesalers risk losing out on repeat business if they stand still in time.
“To rest on your laurels in this business would be risky, and if businesses want to customers to return, they need to be innovative, expand and to think broader than the current state of play,” she says.