Adam Armstrong talks to Juliet Dennis about his hopes for the brand following his appointment just before the start of the Covid-19 pandemic
Adam Armstrong’s first six months at the global helm of youth brand Contiki haven’t quite been what he expected.
When he accepted the role of global chief executive there was no inkling of a worldwide pandemic round the corner that would ground the industry to a halt and force travel businesses to shed staff and focus on refunds, cancellations and amendments rather than new bookings.
He says: “I accepted this role in better times and I was very excited about the opportunity to take over a legendary brand in the youth market with the prospect of growing the brand.
“We had had a great run until a couple of years ago and then it stabilised and fell off a bit. My opportunity was to come in, reinvigorate it, and make it great again.”
But even to start the role in the current crisis Armstrong faced a hurdle – to leave Australia where he had been based for the last 16 years in a variety of roles, most recently as senior vice president and managing director of Silversea Cruises, Australia and New Zealand.
“I had to apply to leave Australia [because of the pandemic],” says Armstrong, who ended up doing a three-month handover in Sydney before finally making it to the UK.
To add to this, Armstrong then contracted Covid-19 himself prior to the final leg of his journey to Contiki’s headquarters in Geneva, Switzerland.
“It’s been a challenging but intriguing year,” he admits. “It’s been upsetting from a personal perspective seeing people leave the business and because we have not been able to provide people with great holidays, but I’ve been in the industry through many crises; I started work just after September 11 with P&O Cruises.”
While Armstrong describes the pandemic as “undoubtedly the biggest” crisis the industry has faced in recent years, he adds: “We will get though this. We know there is a light at the end of the tunnel. After September 11, people didn’t want to travel. Now people really want to travel but they can’t.”
Despite the pandemic, Armstrong has “aggressive growth ambitions” for the UK market, the operator’s third market behind Australia and the US.
With surveys showing the youth market will be the quickest to rebound, and Contiki’s demographic more willing than other sectors to travel, he is optimistic about the future.
He says: “We are modelling various scenarios on how quickly we will get back to 2019 [sales]. I’d like to say it will be next year but it depends on the vaccine, how quickly borders open up and the quarantine policy.
“Our market has been shown in surveys to be less concerned about having a vaccine in order to travel.”
Sales growth, however, will not be without challenges.
The demise of travel agency chain STA Travel, which was a preferred partner for Contiki, means the operator needs to find its UK sales elsewhere – and closer ties with mainstream travel agents will be a major focus for the operator.
STA provided the operator with a “significant” proportion of its UK sales.
Armstrong is determined Contiki will fill the gap in the provision of youth holidays left by STA in the UK, through effective digital marketing to the younger demographic and by working more closely with more mainstream travel agents to capture that market of 18 to 35 year olds. Its average UK holidaymaker is aged 25.
He says: “The challenge for us and for agents is marketing to these customers. They are in the digital and social space. It requires a different marketing strategy and social media is integral to that.”
Already the brand has established relationships with most of the major consortia as well as smaller independents, homeworkers and online travel agents.
But it is now working more closely with a handful of UK travel agency partners, many of whom have not traditionally focused on the youth market, in a bid to plug its distribution gap and introduce new business to its partners.
“We are trying to fill that gap left by STA. We are working with agencies, both traditional bricks and mortar and homebased agents, which see this as a big market they could be missing out on. We are working on a strategy; a lot of it is educating who our guests are and how agents can transact with them.”
Armstrong is hopeful that in future more UK agents will be open to working with Contiki, which has historically enjoyed the majority of its sales from the trade.
“Once these new partners are seen to be working with us, it will attract more agents. It’s not an overnight process, it will take a bit of time, but I’m optimistic. It’s about educating and brand awareness,” he adds.
For agents, the attraction is the fact most trips are “big-ticket items” – long-haul package holidays of longer durations.
“It’s lucrative business and long trips of 34 to 45 nights. We are not a household name in the UK like we are in Australia so the greatest challenge is getting people on the first trip.”
Already, in response to Covid-19, the operator has launched a Contiki Consultation Service to offer agents one-to-one Zoom training and help on quotes.
And while international travel has been off the agenda, the operator has focused on domestic product. At the end of this summer it introduced glamping trips in Wales and surfing in Devon. More trips are likely in the UK next year.
“We took relatively small numbers in the UK but we had a good response. We have already started to look at more domestic opportunities in the UK. There will be people nervous about going overseas,” says Armstrong.
With Contiki’s core Australia destination off the cards until at least late next year due to the country’s Covid restrictions, Armstrong hopes to switch long-haul sales out of the UK to closer-to-home trips, either in the UK or Europe.
Armstrong admits: “I can forsee Australia opening up to some markets locally but I am less optimistic about Europeans getting into Australia which means we have to double-down on the UK and Europe as destinations.
“One of the challenges is replacing that [long-haul] business. Australia trips are two to three weeks and a five night trip in the UK is not the same. That means we will be looking for new people that have not been with the brand before.”
As a result, he anticipates Europe bookings could increase from a third to more than a half of UK sales.
New trips which were planned for 2020 for Europe are being relaunched for 2021, including a Vegan-themed tour and trips to music festivals, which it is hoped will offer something new to repeat clients.
And while Australia is not open to international travellers, Contiki has also started domestic tours in the destination for the locals market.
Its first tour in a Contiki-branded coach for 15 holidaymakers takes place on Sunday, November 15, in Queensland.
He says: “We are back on the road. We have a couple more in December and then in New Zealand over the new year. It’s baby steps but I am excited we are operating again.”
Contiki is also evolving its product range to stay relevant to 18 to 35 year olds and has introduced two new travel styles: Detour and Limited Editions.
The first offers shorter duration stays of three to five nights in one place, rather than touring, and involves an activity such as wine tasting in a French castle to training to be a safari guide in Africa or surfing on a beach in Devon.
This is a direct response to demand for shorter trips, says Armstrong.
“Historically as a brand we’ve offered longer trips but our demographic is changing. A lot of 18 to 35 year olds are taking more frequent, shorter trips and this is a response to that,” he says.
Limited Edition tours are typically smaller groups and have a theme or interest, such as attending the Berlin and Amsterdam Pride festivals or a cycling trip in France.
Sustainability is at the core of Contiki’s offering, says Armstrong, particularly as it is an expectation of its client base.
“It’s a given for an operator like us to be operating sustainably,” he admits, adding: “We are looking at how quickly we can be carbon neutral and already we have already met our commitment to have at least one signature Contiki Cares experience on 50% of our core product trips by 2025. We’re already on 60% and our objective is to get as near to 100% as we can.”
Contiki Cares experiences include trips such as its Refugee Voices project in Berlin where Syrian refugees give a tour of the city from their perspective, a kiwi hatching facility in New Zealand, and tree-planting initiative in Iceland.
But for the immediate future, Armstrong is focused on kickstarting the operator’s sales in the run-up to Christmas.
Contiki is using Black Friday to launch its first two-week long cybersale across all of its product range, with low deposits of £60. Normally the operator would focus on selected products in a short sales window.
The sale offers up to 30% off selected trips for travel between March 12, 2021 until October 31, 2022, and applies to new bookings made between November 24, 2020, and December 3, 2020.
“We are hoping this will excite the imagination of the youth market,” says Armstrong. “Black Friday will be a test for all operators: we are riding on the wave to see if we can drive volumes.”
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