Special Report: Jet2 tops million customer mark with traditional package strategy

Special Report: Jet2 tops million customer mark with traditional package strategy

Alongside other major players in the industry, Jet2holidays has had a testing three weeks since the terrorist atrocity in Tunisia.

But like those other operators – including Tui Travel and Thomas Cook – it has received widespread praise for the timely and sensitive way in which it has responded.

For a company that launched as recently as 2007, its development into a major player has been swift, but it is key selling points including Atol protection and in-resort service that came to the fore at the most difficult of times.

Jet2holidays now positions itself as the UK’s third-largest operator, offering package holidays and city breaks to more than 40 beach and city destinations across Europe, the Mediterranean and the Canaries. In 2014-15, it carried one million passengers for the first time.

The operator continues to grow and, according to chief executive Steve Heapy, it will continue to “focus on what it does best – package holidays you can trust”, rather than branching into long-haul or “unnecessary expansion” in the south.

Selling points

Speaking before the Tunisia attack, Heapy said: “We’re there to fill a gap that Tui and Cook don’t cover – maybe a particular property or flying from a particular regional airport, or offering more-flexible durations.

"We offer just a £60 deposit, which people like – our product suits the working people of the north of England. We don’t think you should have to pay £600, £700 or £800 for a family deposit.

“One or two operators offer a £50 deposit but you have to pay the balance nine or 10 weeks later. We ask for the balance 10 weeks out from departure, which is something else our customers really like.”

And Heapy said: “Agents are much better off building tailor-made trips for more complicated long-haul holidays and saving time by selling short-haul packages.”
Trade relations

Heapy explained that 35% of Jet2holidays’ business comes through travel agents.

“The percentage hasn’t changed in all the time, but the numbers have,” he said. “Agents account for 350,000 of a million passengers now versus six years ago when it was 21,000 of 60,000.

“We don’t have a desire to move that down. Travel agents are an integral part of our business. Unlike other tour operators that want to reduce their sales through the trade, we want to see it maintain and grow.

“Travel agents have had a rough few years. They’ve been hurt by tour operators’ commission cuts, by councils increasing rates, and by the industry-wide move to the web, but trade sales are a big part of the Jet2holidays business.

“Six years ago agents didn’t know who we were. Now we are of a size where agents are worried we might get too big and go the way of other operators. We won’t. We want to be different, dynamic, exciting and, most of all, loyal.

“In fact, we recently ran an advert promising not to cut commission this or next year.”

Alan Cross, the operator’s trade general manager, said the company was looking at different revenue streams.

“We are getting 10 bookings a week through tablets and mobile from travel agents,” he said. "It doesn’t sound much now but, over the course of a year, that’s 10 x 52, and at an average of five passengers per booking, it’s absolutely worth developing.”

Cross said Jet2holidays plans to double the number of fam trips from six to 12 a year, each hosting about 10 agents from the same company or consortia to one of its beach destinations. And he said he hoped to help more agents with their shop frontage and interiors by offering dual-branded signage and brochure racks.

Agent website

Jet2holidays relaunched its website last month. Information about beach and city destinations was improved and the two destination types have been split out with different search tools.

City breaks are more precise as people know where they’re going, have only hand luggage and don’t need a transfer, so baggage allowance and transfers are taken out of break prices to make Jet2 more competitive. Beach is driven by price and availability, so the destination becomes secondary.

“Some of the functionality is pretty unique,” said Cross. “We have tools on there to help agents, like having TripAdvisor and Google Maps built in.

“We’ve also added the ability to print a quote for a customer where the agent can replace ‘Jet2holidays’ with their own agency name. This gives the agent confidence that they can sell our holidays without worrying that the customer is going to go online.”

City breaks

Jet2holidays launched a new brand, Jet2CityBreaks, a few weeks ago. Heapy said: “The look and feel of the brochure is very different and the website has sightseeing maps.

“Agents can see exactly where a hotel is based. In certain areas it’s lengthened the booking process, but it’s increased the conversions. We are hoping to compete with the likes of Travel Republic, On The Beach and Lowcost.”

Product development

Heapy said customer demands 
are changing. “Family holiday expectations have changed so the properties have to change.

"We’ve added properties like the Magic Natura, which is four miles from the centre of Benidorm, to the programme because it has a safari element, and the BH Hotel Mallorca with its water park, DJs and chill-out pools.”

Jet2holidays is also expanding into new destinations such as the Neapolitan Riviera for 2016. It is also pushing for the re-education of agents and consumers about once-popular destinations like the Costa Brava.

“Agents have forgotten how to sell the Costas, whether it’s the Brava, the Dorada, the Blanca or the Del Sol,” said Cross. “We’ve built an area on the website about them and are also producing hard copy training guides and planning training sessions and webinars.”

Package security

Both Heapy and Cross believe the package holiday market is reviving and that this will increase further as more liability is laid on agents who dynamically package.

“There are a lot of agents who have got heavily into dynamic packaging,” said Heapy. “But we think we’re seeing something of a renaissance in packages. It’s much less work if they let us do it, and agents are beginning to see that.And for customers it’s better too, with the peace of mind of 24-hour emergency help and our rep service.

“The biggest issue, though, is that a lot of agents haven’t realised the liability sits with them if something happens in a hotel that they book their clients into on a dynamic package.”

Cross added: “We don’t want to scaremonger, but it’s a complete unknown and agents could find themselves in the dock or completely wiped out.

“We spend thousands on health and safety. If we don’t get the right paperwork back from a hotel, it comes off sale immediately. With dynamic packaging, agents can potentially stretch their margins, but can they sleep at night?”

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