Thomas Cook recently announced a new strategic direction, focused on increasing its “Differentiated” product from a claimed 30% to a healthy 50%. But what exactly is “Differentiated” product??
The tour operators seem to have been slow to define this! My own definition is very simple “ Product demanded by customers, which can only be brought from that tour operator”. The key phase, which makes defining differentiated product hard, is “demanded by customers”. There is little point having “Exclusive” product that you cannot sell, because customers are buying the hotel next door for £50 per person cheaper!!!
On Wednesday, after a torrid build up, Thomas Cook‘s management team got to announce its new Corporate Strategy….or was it TUI’s strategy they announced?…..Difficult to tell, considering how similar they now are! However, is it wrong to copy the “Right” strategy?
Personally, I think not, with Thomas Cook now clearly heading in the right direction in my opinion. Given the rapid advance of lower priced dynamic packaging, it is essential for traditional tour operators to differentiate their product by adding value to its proposition by investing in hotels, staffing levels and in-resort infrastructure to improve the quality of the holidays they offer. Therefore, the stated aim to increase their differentiated stock from 31% to 50% must be the right direction. However, in a cash strapped organisation this may prove difficult to achieve, since differentiation often equates to the long term commitment of cash and a considerable increase in risk stock and company gearing.
After years of ignorance, Ryanair have finally realised how many agents were booking their flights and packaging them into holidays, due to the heavy use of credit card surcharge avoidance techniques via virtual booking cards. Hence, in some ways the trade can only blame itself for the aggressive two pronged attack on travel agents Ryanair has launched this month, because in colloquial speak, the industry have “had Ryanair’s trousers down and given them a good financial spanking”
On the Beach off the back of their move to offer ATOL protection to its customers have now decided to allow customers to pay for their holiday 30 days before departure rather than the traditional 90 days still offered by its competitors.
Cynic’s in the industry claim that this because the customers funds are protected in a trust fund and can not be used to fund marketing. Hence, if it can not be spent, why collect it?