Small tailor-made tour operators will face a threat from big rivals who use technology to personalise their services, Tui Travel’s new chief executive officer – northern region told this week’s ITT conference.
Dave Burling, who was promoted last month from his role as UK and Ireland managing director, said modern technologies and mobile apps are offering large corporations the chance to customise the experience for every single customer.
“I believe the threat here is for the smaller tailor-made niche operators who previously have had this tailor-made market for themselves,” said Burling.
He added: “I would not say we can do niche better, but technology is now allowing big companies to start customising their product a lot more than they could than in the past.
“Technology will allow us to start to understand a lot more about our customers. It does not mean Tui will be buying more niche companies – we will use the scale business to reach out to a broader market.”
Burling said there was an ever-increasing demand for better customer service in travel, something even Ryanair has come to accept.
“Many travel companies excel in this area; the question is, can a big brand like Thomson not just be good but be truly famous for service,” Burling said.
He added that having the right technology was one element, but “to be truly famous on service you also have to have the right people”.
Burling said he believed Tui was better placed than OTA rivals or airlines to provide this service because the firm is involved in every step of the planning, buying and going on holiday process. “The question is, can we raise our game”, he said.
Delegates at the annual conference, this year held in the Emirate of Ras Al Khaimah, heard that revenue management techniques had been a vital plank of Burling’s strategy at Tui for over a decade.
He said the operator had good product and no problem attracting customers, but had been “nowhere near fully capturing the value of our product in terms of the prices we were achieving”.
Burling said the company was selling its best stock too quickly and spending most of its time trying to sell stock no one really wanted.
“It was almost as bad to sell too quickly than not to sell at all. In an industry of wafer thin margins the impact of revenue management is huge. How much do we waste by merely reacting to trends rather than trying to influence the trends?
“Questioning existing customers can help you improve your existing product but you really need to widen your appeal, so you need to listen to non-customers to understand what are the real barriers and constraints to people booking with you.”
Burling pointed to Tui’s new high street retail concept stores and its pioneering work with the new Boeing Dreamliner bringing destinations such as Costa Rica on stream as examples of how Tui was innovating and reacting to customer demand.
“As important as the choice of category is the execution of that strategy,” said Burling. “The challenge of strategic execution becomes more difficult for the companies at the top of their game as there is a risk that it all becomes too comfortable.”
“Sometimes you have to be brave and for some parts of your businesses say if it’s not broken let’s break it.”
Burling said there are two types of talent – those that “shout” and “whispering talent”. He said successful companies recognise and nurture the latter and recognise and reward their unsung heroes.
“Maybe this talent is under our noses in the local community or even already working for us and only has to be given a chance.”
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