A 'golden generation' of travel bosses at Thomson in the mid 1990s laid the foundation for the future success of the industry, Neilson boss Richard Bowden-Doyle (pictured) told the latest ITT Odyssey supper in the House of Commons.
Addressing a senior audience at one of the ITT's regular events, Bowden-Doyle said it was the team under former boss Charles Newbold that worked out that building holidays that were different and better than your competitors' would bring success.
He cited individuals such as Dave Burling, currently managing director at Tui UK and Ireland, as the brightest in his team that also included Craig Inglis (now John Lewis marketing director), Joanna Edmunds and Phil Boggon, who will step down as managing director of Monarch next month.
Bowden-Doyle described Thomson as "the university for tour operating". “I believe that team actually laid the foundations that changed the industry and contributed to an entirely one-sided future.
“It was the team in the marketing area that figured out that the critical determination of success was going to be building holidays that are different and better than your competitors'. That strategy is effectively the basis that Tui has been built on.”
Bowden-Doyle was managing director of Thomson Holidays for five years, during which time the firm successfully floated on the London Stock Exchange raising £1.7 billion in investment, way above expectations.
However, he said when he joined Thomson in 1995 the year was a disaster for tour operating and the firm crashed from earning £40 million the previous year to just £2 million after misjudging capacity. Bowden Doyle said Newbold told him he had two choices.
“You can either spend the whole year running round like a blue-arsed fly, and I promise you nothing you will do will make a bit of difference... or you can sit back and think about how to take this business forward and think about how it works.”
Bowden-Doyle said he was not the most popular recruit at Thomson because he had switched from Thomson-owned high street retail brand Lunn Poly, which had aggressively built its retail business under Ian Smith, who Bowden-Doyle described as the "most inspirational man I worked for I have ever seen".
Lunn Poly had grown rapidly to employ 7,000 staff and from 2% market share to 25% under Smith by offering a wide range of product and competing aggressively on price, making it unpopular with its sister brand. It "completely changed the face of the industry", said Bowden-Doyle.
He also referred to predictions he made in 2000 about the industry, the first of which was the drive to lower costs which would mean consolidation would accelerate.
And he cited a book by two Harvard professors called “The 22 Immutable Laws of Marketing” which included the “Law of Duality”. “Early on a new ladder is a ladder of many rungs. Eventually it becomes a ladder of two rungs.”
He said in the UK it was clear it was going to be a two-horse race and it was easy to predict who was going to be the number one, although he said today it is harder to predict who is going to be number two, with easyJet challenging Thomas Cook in the mainstream holiday sector.
Referring to Tui, the market leader, he said: “It’s easy to do a good job when you have not that many competitors. You have got to get bigger, or better or different. Those things still apply. There are still a whole load of businesses that have not really figured out what they are going to do.
“Long-term strategies beat tactics every single time. I believe strongly there is no substitute for intellectual horsepower. In a complex business I would take youth over experience every time.”
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