In the wake of Lowcost's collapse, trust and credibility are more important than ever, says Matt Stuart, managing director of Getabed
This year my business celebrates its 25th birthday – no easy feat in today’s market.
According to the Office for National Statistics, Brits spent £9.9 billion on overseas travel in 1991. Last year, the figure exceeded £39 billion.
In 1991, bookings were taken by phone, and booking forms handwritten and faxed to the hotelier, with confirmation posted to the agent.
But the ‘deregulation of the skies’ in 1992 heralded a new era, with the growth of low-cost carriers introducing us to destinations we’d never heard of. On the back of this came the travel booking revolution.
The launch of lastminute.com in 1998, among others, changed how consumers researched and booked holidays. Businesses could scale up more efficiently and get product to market quicker, and the term ‘dynamic packaging’ was everywhere.
There were new destinations, a greater choice of product and consumers going direct to hotels. We saw price wars, mergers and, ultimately, some failures of bed banks, tour operators and travel agencies.
Trailblazer burns out
I was saddened but not surprised to hear about the demise of Lowcost Travel Group, and my thoughts are with the holidaymakers affected and the staff without jobs. An entrepreneurial business led by a confident team, they had blazed trails over the years.
However, there had been rumours for some time that Lowcost may have been struggling, and recent redundancies suggested there was substance to them.
In the bed bank sector, many collapses have been attributed to aggressive and unsustainable growth from low pricing and margins, and a failure to adapt business models to changing markets.
As with any business, you need to ensure that you constantly adapt to survive. There will always be someone else with a short-term approach, who will knock a penny off your pricing to win a booking. You must continue to have a broader set of attributes, and more than ever, you must build trust and credibility.
There have been two constants over the past 25 years: change and reliability. Those that have succeeded have embraced technology and the changing demands of the customer. Having 25 years’ experience to share with agents who trust you is priceless.
Most now understand that price is a key driver, but we have to look at the whole picture to ensure we avoid being penny wise and pound foolish. It’s taken a long time for online players to realise that service remains top of the agenda, but with so many consumers booking direct, never has this been so important.
Adapt and thrive
So what about the next 25 years? Brexit has resulted in a lot of speculation, particularly after Lowcost’s failure. In the medium to long term, Britain will adapt and thrive.
Booking a holiday will become an even more personalised experience, with the advances in technology and social media. There are fewer travel firms around than in 1991, but many that remain have overcome challenges and are stronger for it.
Whatever the future brings, we’ll adapt and continue with the long game to steer us through the next generation of change. There will always be a need for great service coupled with competitive pricing and good product.
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