Following British Airways' calamitous handling of the opening of Terminal 5 and reports of stranded holidaymakers after the collapse of XL Leisure Group, the industry is contemplating a new low in consumer confidence.
BA chairman Martin Broughton told delegates at the event, held last week in Gran Canaria, that of the 75 low-cost carriers in Europe, he expected up to 50 to go bust. But he also went to great lengths to remind travel businesses that during a downturn, it is imperative they make efforts to create a strong brand and improve customer services.
‘It's important that businesses don't cut back on innovation, don't cut back on marketing and don't cut back on the customer,' said Broughton. ‘People are going to be more conservative and stick with brands they know; people they know. Branding is important, innovation is important to stay one step ahead. Establishing and maintaining consistency in branding is vital - people have to know who you are and what to expect from you.'
While plenty of travel brands have generated high awareness levels - either through heritage or publicity campaigns - the bigger challenge is to create brand loyalty. The rise of internet travel companies such as Lastminute.com has exposed a lack of loyalty to travel agent and airline brands, with consumers prioritising value and convenience.
TUI customer director Tim Williamson agreed that travel brands need to develop a stronger USP. ‘There is a bounce for brands in a strong position [after failures such as XL], initially at least,' he told delegates. ‘But as we've seen with the banks, the fact you've been around for a long time doesn't mean a thing, you need something behind it. It's about using your point of fame and creating preference among consumers.'
Williamson is in the process of repositioning the Thomson brand following its merger with First Choice last year. The rebrand, likely to emphasise trust and customer service, will be publicised in an ad created by Beattie Bungay McGuinness later this year. The agency is also creating a campaign for First Choice to air at
the same time. Both brands intend to remain mass-market players, with First Choice unlikely to stray far from its family-oriented positioning.
Tourism agency Enjoy England, part of VisitBritain, has strived to portray a holiday in this country as ‘fun and indulgent'. Tellingly, the organisation has created a specific division for brand partnerships - following tie-ups with Walkers Crisps and Sony Pictures around the latest Bond movie - to keep Enjoy England in the spotlight.
The brand's newly appointed partnerships marketing manager, Stuart Heath, says it is vital to maintain a brand that is strong enough to convey the product and the wider experience on offer. He cites successful campaigns by the Kiwi and Australian tourist boards as work that has created a ‘warm positioning for the brand', which differentiates the countries from other destinations.
The travel industry is likely to change shape in the next 12 months, and the survival of brands within it may depend on how they deal with an inevitably long and difficult winter season. As BA's Broughton suggested, the best time to act is now.