Sep 23, 2019 | distribution, Marketing, New & Press, OTAs
The failure of Thomas Cook, a huge travel brand, should be a warning to all tourism companies about the dramatic changes in tourism today. The lessons from Thomas Cook’s failure should not be ignored. In this summary, we look at several news sources and analyses. The company cites the instability of some prime destinations as the cause of the financial burn. But the business model has been in decline for some time and many other factors have added to the problem. Not least of these is the Digital Revolution.
From Trains to Planes & Bricks to Clicks
From its early roots of organizing rail travel around the UK in 1841, TC jumped into the world of international travel, buying MyTravel in 2007. To compete with Online Travel Agents (OTAs) and its arch rival TUI, the company needed to invest heavily in building up its IT. That turned out to be far more complex that anticipated. A £100 million project with IBM ran into trouble while undertaking the massive task of integrating the many brands.
The marriage of online and retail was an obstacle that OTAs did not have to worry about but it put TC at a disadvantage in adapting to the competition. It also led to confusion and lack of clarity in its digital media. The project was abandoned in 2011 with £86 million in losses.
Digital Technology – Changing Faster Than Thought
It’s hard to believe that, after all of that, the company leadership still believed that they could compete and beat Expedia. That objective was pie in the sky and the digital marketing ambition failed. In 2018, the company concluded that building an online booking engine was more difficult than expected. It was not just about the booking engine, the entire marketing system had to compete with the growing sophistication of the OTAs. The systems and digital marketing technology were dynamic and always changing and they required insight and know-how to use them effectively. But that was not their forte. In that year, it agreed to use Expedia technology for its bookings. Source Phocuswire. That may have been a step in the right direction but it was not the solution.
According to Capx, “The main reason the company failed was its outdated business model. Thomas Cook offered comprehensive holiday deals which would include flights, accommodation, and transport to and from the airport. It could even organize your wedding. It was a convenient and affordable way to book a holiday. However, given the number of price comparison sites now available, the idea of popping into the local travel agent’s to speak to somebody about booking a holiday seems almost unthinkable”.
How Mindset and Status Quo Kill Innovation
It’s now clear that Thomas Cook misjudged the challenges of the new technology. It simply did not understand the digital landscape and miscalculated along the way. In the face of rapid change in technology, it is often the well-established that lose. Legacy systems do not change easily and the mindset around them is often deeply entrenched. Often stakeholders are blind to the threat and the need to innovate.
According to Joseph Schumpeter, when new disruptive technologies emerge, “the companies which do not adapt will be destroyed, but those that do will thrive.” Technology replacement represents progress. “Although there is destruction in the short term, there are also increases in productivity which brings economic growth and prosperity.” See more on Schumpeter’s Creative Destruction
It’s not that Thomas Cook did not try to reinvent itself. Turnaround Specialist, Harriet Green, came in as CEO in 2012, implementing ruthless cost-cutting. Her style did not go down well with the Old Boys’ Club of traditionalists. This is the perfect example of how legacy systems do not change easily: Mindset and the Status Quo Kill Innovation.
Failure to Adapt to The Digital Age
The UK Telegraph puts it succinctly when is states: Thomas Cook was ripped apart by the Internet! The idea that ordinary travellers can build their own customised packages with a few clicks was just incomprehensible to the Old Guard. But it gets far more complex than vision. It misjudged the level of effort and had a leadership that did not understand the new playing field.
Thomas Cook was never an innovative company. It put things together, created travel packages that were difficult for travellers to create themselves and made it all affordable. But by not trying to understanding the new media, it could not adapt. Maybe it could not have survived the Digital Age, as the new media was now doing a large part of its job.
Books & Training Abound
Perhaps the company should have invested in training its leaders in the mechanics of the new digital technology. Just buying an easy-to-read book that puts digital media into perspective might have been helpful. Hotel and hospitality managers, owners and tourism marketers simply have to know what’s going on with digital media. It is the prime media for marketing travel today and has overtaken TV and all other media.
A search on Google or Amazon for ‘digital media for hotels and tourism’ will show many titles. There is no shortage of excellent literature, training courses and videos.
Sample of Amazon’s latest Books on “Digital Media for Hotel & Tourism” – My Book is the one with the Apple. It the second in the series on Marketing Travel and follows WEBSITE, an Amazon #1 best selling book.
Struggling Under Massive Debt
TC was hoping to secure a £900M rescue package with Chinese tourism business Fosun, as well as with various banks and hedge funds. The investment would pay off £1.7BN of loans and free up cash to apply to operation and paying interest. But the banks demanded that it must find an extra £200m. “That is insurmountable!” they say. Alex Brignall, Travel and Leisure Analyst at City stockbroker Redburn, says that it’s very worrying as “September should be the best point of the year for the cash balance. The demand suggests the company has taken a big hit from all the negative publicity, and is facing additional working capital stress.” Investors were running away from the deal!
The reason why it got to the point of debt goes back to 2011, when it went to administration for support. The money it borrowed resulted in £1.2BN in interest. That’s more than a quarter of the revenue from the 11 million holidays it sells annually. It’s just not sustainable. A valuable brand and its assets were on the block.
The Role of Package Holidays
Some analysts point to the fact that the package holiday may have had its day and it’s a tired model that TC was struggling with. This is not entirely true. In fact, Thomas Cook says it’s a vital and growing sector. “The number of Brits opting for all-inclusive package holidays has increased steadily over the last four years and accounted for 65% of our bookings this summer.” Chris mentions some factors behind the trend including uncertainty over exchange rates and costs. In an ironic twist, he adds: “All-inclusive bookings for this winter are already up 11% compared to this time last year.” – Chris Mottershead, Thomas Cook Chief of UK.
Tour Operator, On the Beach, agrees. “Package holidays accounted for 91% of all bookings so far in 2019. Up from 87% for the same period in 2018.” Source: TravelDailyNews
It is true that there are many alternatives today! We have many discount airlines and online booking sites that make it easy for travellers to package a vacation on their own. It’s also true that many travellers today are looking for more unique experiences and travel brands big and small are working to personalise the vacation experience.
The point is that the the market is diversified. It accommodates many options and that trend will continue. The options are not mutually exclusive. Personalised packages are also a growing sector. The problems that Thomas Cook had stewing were far more systemic.
A Valuable Brand That Survived 2 Wars
Thomas Cook is one of the very few Victorian brands that still resonate today. It had survived world wars, recessions, takeovers, re-organizations and even Robert Maxwell as a major shareholder. It was just the wrong business model for today and was so entrenched in its legacy system and mindset that change was daunting. But, as The Telegraph explains, there were options. Service businesses can be successful by combining different services and products in unique ways. Apple bundled a phone with a camera and a music store. Amazon bundled a vast array of services with Prime.
The brand is valuable and the company owns a mass of assets. While it is wrapping up, it will be talking to buyers and investors and maybe someone will come up with the ideas that can see it reemerge. As noted in The Guardian, there may be “new lenders, as yet unnamed. Asset sales are also on the table, such as the sale of its Nordic business to private equity group Triton, which made a bid earlier this year. A taxpayer-funded bailout appears to have little chance of happening. Otherwise, Thomas Cook is fated to join the likes of BHS and Woolworths – household names that disappeared into oblivion.”
The Fallout
Immediate impact on travellers and jobs. 600,000 travellers scattered throughout various destinations wonder how they will get home. The British Government has deployed 50 aircraft and is airlifting about 150,000 travelers back to the UK. 22,000 people worldwide are no longer employed with the company. Replacements now need to be found for the many aircraft that will no longer fly for Thomas Cook. The Caribbean, for example, will have to replace over 400,000 travellers from the UK and Europe for the coming winter holiday season. Over 100 aircraft leased or owned (34 owned) by Thomas Cook are up for grabs.
On the upside, other airlines are expecting to pick up the business and already their stocks have jumped. TUI, Cook’s main rival, rose by 8% in anticipation of increased sales and EasyJet’s jumped by 4%, Similarly, other airlines have danced about and may do more dancing as the dust settles. Source Fortune.com.
For German travellers, Condor Airlines, the German division of TC, is expecting to continue operation with government funding for 6 more months. That will restore 200,000 airline seats to the Caribbean but there is no guarantee how much of that inventory will be sold.
Thomas cook will be missed by the thousands of hotel that have filled their beds over the many tears of operation. Hotels in Spain, Turkey and Tunisia which relied heavily on Thoma Cook are now scrambling to find alternative distribution and many may close.
Tourism Destinations Scramble
Photo by Pittsburgh Post Gazette
Destinations all over the world are busy trying to fill the gap left by the Thomas Fleet and its stream of traffic, especially coming into the winter travel season for Caribbean islands. Barbados was one of the first to meet with Thomas Cook’s stakeholders in the UK. Plans are in motion to find alternatives for the 24,000 seats now lost for winter holiday travel. The race is on to find other flight partners to pick up the slack. As always, that is a juggling act that will take some time to work out. The main carriers to the Caribbean – BA, Virgin, Condor and TUI – have a limited inventory of available aircraft.
The Caribbean Island of Barbados is planning to offer a $100US bonus to all travellers that became stranded anywhere to come to Barbados for “any future vacation”. Minister of Tourism, Kerrie Symmonds, says “the dates will be announced later.” He adds that Barbados is happy “to host any displaced customer who is still seeking an excellent vacation experience.” See more about Barbados Vacations at Barbados.org
Europe & Africa – The Guardian has complied statics of travellers stranded in several holiday destinations in Europe and Africa – See TheGardian.com.
Actionable Lessons From Thomas Cook’s Failure
For hoteliers, hospitality and tourism professionals, there are several lessons to be learned from the failure of Thomas Cook. Some of the reasons for failure are out of our control but many are not.
- Management owes it to its shareholder and employees to understand the Internet. Digital Media is dynamic and old principles do not apply.
Learn more by reading the latest books on Digital Media for Tourism. Take online courses, listen to podcasts and subscribe to newsletters that follow trends.
- Don’t underestimate the task of going digital. The technology is not trivial and it continues to evolve.
- Beware of legacy systems. Sometimes it’s best to buy rather that integrate. It’s easy to underestimate the cost of integration.
- Don’t let mindset stop innovation.
- TC was massively in debt. Spend wisely and understand the complexity of what you are building or investing in.
- Always Innovate. The successful companies find a better way.
- Diversify your distribution and never put all your eggs in one basket. Be strategic with your channel choice and make sure you build your direct business.
Prepare for Disruption
This is just the tip of the iceberg. Disruption is coming to a portal near you! Tourism is at a pivotal point and is suffering from too much success and over-tourism. Site are closing and tourist are not always welcome everywhere. Add to that technology is in for massive change.
OTAs have become complacent, there is little innovation in the establishment. Travellers search for solutions with outdated options. In the meantime Apple, Amazon, Google and Facebook all top innovators and eye their entries. Airlines, hotels, destination and OTAs need be wary of change and ready to do better. There will need to be collaboration across the channels to deliver more for less. New travel search and booking models must be explored. Matching travels with amenities is passe in an age where experiences matter most.
Watch NDC – this could transform and disrupt a few players
Keep watching – we will soon add more!
Happening now: Airlines will add new distributed bookings. Hotels, Tourism Operators and Agents may soon have integrated tools that allow travellers to add air transport to their bookings. This is the implementation of IATA’s New Distribution Capability (NDC). Depending on how it rolls out, it could transform the user experience and has the potential to disrupt the status quo.
UPDATE OCTOBER 2020 TC to Reboot
Thomas Cook plans to reboot as a digital-media travel company, allowing users to” build-your-own packages”. It goes live for bookings this week and will be using HotelBeds, Webbeds and Yalago for Europe and the rest of the world.
Learn About Digital Media
The book series is for hotel and tourism professionals who are not technology experts. You will find them an easy read. They simplify complex jargon in conversational-style illustrations.
Apr 28, 2019 | Marketing
Consequently, Chapter 4 Digital Media Review and Bonus is now live here >>
Chapter 4 Review and Bonus
The new page summarises Chapter 4 and provides more details on social media. The bonus, normally restricted to members and book buyers, is now available to anyone who cares to read it. It includes 7 tips on how to master Instagram. Instagram, the fastest growing social media platform, has excellent engagement. It is being used extensively by travel brands.
The bonus offers a private tip on how to expand your network by working with Influencers. It provides detailed instructions on how to repost amazing photos by professional videographers and photographers.
Reposting Instagram
Reposting @antoniodcarreira to #lifestylesoftheartisan @irclay⠀
Originally Posted by Photographer Antonio D. Carreira
Benefits of Reposting
There are many benefits to reposting trending and professional photographs. They include:
1. Increased Engagement. Beautiful, interesting and topical videos and images will engage your visitors. Consequently, many users who are not following you may well click the ‘Follow’ button.
2. Increased Reach. You inherit fantastic content, a well-know name and all of the hashtags. As a result, you will generally expand your reach. It will help you get seen by many more people who are interested in your niche.
3. Increase in Followers. For the two reason above, you should expect to increase your followers and interactions.
Reach Out & Respect Copyright
Remember to get permission. Just leave a comment saying how much you like the photo or video and why. Try to give an informed and expert opinion. Comment on form, contrast, framing, colouring, angles, composition and special effects.
Add that you would like to use it on your Instagram and give them full credit. Most will reply quickly and thank you for reaching out. However, if they don’t reply, move on to another influencer.
Be sure to follow them. If they see that you are sending them new reach, they may well follow you too.
Instagram photographers are the secret weapon for travel brands and tourism destination. The beauty of the sharing economy has a huge spill over for hotel travel marketing – click for detail on how to capitalize on social! Photo by Antonio D. Carreira
Get the Review and Bonus Tips
Get details on how to do this at Chapter 4 Review and Bonus – Spreading the Word
Travel Marketing – Instagram >>>
Apr 2, 2019 | Marketing
Source: How smaller travel brands can ride the personalization wave | PhocusWire
In this article Phocuswire does away with all the excuses small hotels and tourism operators face when trying to market in digital media. There are many obstacles, not least of which is the predominance of huge players that dominate the landscape. It’s time they say to get over the obstacles and focus instead on “How Small Travel Brands Personalize Vacations ”
They suggest that independent work with Influences to personalize, make optimal use of their websites and think small. Apparently Millennial’s are all-in travel enthusiasts and show a preference for texting and emails. They want to know more about the quirky, out-of-the-way, authentic and character based elements of a destination”. Email is one of the very best way to reach help them discover who you are.
Its a matter connecting the persona of your property with the travelers personal interest and character.
More people Travel than Ever Before
Travelers are taking vacation more than ever before. this is good news fir hotels and accommodation of all sorts. Its good news for Hotel Marketers and for tourism operators and destinations. But their are many options and getting on top of a bucket list takes focus and engagement at each step of the journey. Most importantly hosts need to “understand what journeys were most preferred by visitors. Host need to find the elements of those journeys had breakage or hurdles to conversion”. With this information one can optimize the connections between their own campaigns and website and set the stage for personalization along the way.
“Travelers ultimately want a relevant experience, and the best way for marketers to provide it is to put personalization first.” Source Phocuswire
Research Shows Personalisation Increases Conversion
The latest findings by Monetate’s Ecommerce Quarterly Report provides compelling insights into how this works. It found that customers who were exposed to 3 pages of personalised content had double the rate of conversion. When exposed to 10 Personalized pages the rate increased 10 fold.
For this to work one must truly understand the travelers journey and be able to infer needs from behaviour. Websites are not designed this way and instead gives traveller endless choice to wade through. Travelers want recommendations not more choice.
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Mar 19, 2019 | colour psychology, Marketing, New & Press
Source: The Psychology of Design: The Color Blue in Marketing & Branding
Colour Psychology
Psychologists have understood that colour is an important emotional trigger. Hospitals were designed with green, as it is a soothing colour for a stressful time. Colour Psychology is now a hot topic in Marketing. Researchers have now made important discoveries regarding the psychology of color and its impact on mood, feeling and behaviour.
Why Blue?
The Blues in Marketing – As dull as it may sound and as sad as you may thing the blues are, in Marketing, it is an entirely different affair!
“Blue is known for its trust and dependability. It’s reliable, responsible, and mentally soothing. For that reason alone, it’s one of the most-liked colors across the entire world.” – CoSchedule.
Blue is a distinctive colour known to emote trust. It is also associated with quality and reliability and has become the darling of high tech companies such as IBM (known as BIG BLUE). Ford, Chase, Lowes, GE and Samsung are also big blue brands.
In Tourism, Sandals, a Luxury All-Inclusive Resort, uses blue predominately on all its websites. Blue and white are their prime colours. It signifies all noted above but it is also the colour of their Sea and Sand Vacation Destinations. Aside from representing Caribbean holidays, the blue and white combination has the highest score of trust of all colours.
Sandals recently added Black to their website navigation. The various shades of black denote quality more that any other colour. It is a clever use of colour to represent their brand and the destinations they work in.
Blue and white are the Colours of the Caribbean – Ocean, See and Sand. It’s also the colours of Sandal Resort Brand!
The Social Media Leaders Facebook, Twitter and LinkedIn use blue extensively. In Marketing, Salesforce and Constant Contact are bluers. In Finance, American Express, Visa and PayPal choose blue!
And the list goes on…
The point is that big brands understand that colour is important and use it accordingly.
In a recent test by HubSpot A/B tested call-to-action (CTA) colors, they found that just changing the colour of the Call To Action (CTA) increased the conversion rate. They also discovered that some colours work better than others. In their test, a red CTA button outperformed a green CTA button by 21%.
Colour Theory
Primary colours are the main ingredients for colour at large. But what they are depends on your point of view.
If you are an artist, then it’s the pigment that matters most.
If you are looking at light as the source of colour, your primary colours would be cyan, magenta and yellow.
For print, it’s CMYK and for screens or monitors, it’s RGB.
For general purposes in art and design, it’s red, blue and yellow. These are the 3 colours we need to make all others and they are the building blocks of colour psychology in marketing.
Colour Psychology
Understanding colour is helpful in design but it may not help you understand what colour means in terms of mood and emotion. For that you need to talk to a colour psychologist.
Blue has powerful positive and negative emotional resonance and like all colours, one must use it wisely.
Blue’s emotional triggers are widely seen in nature – from the Blue Ocean to the Blue Sky to Blueberries. Because of these emotional connections, blue is omnipresent in marketing.
Other colours each have a different significance that may be more aligned to what you do, who you are and the emotional.
Just click on the blue chart here to see the spectrum of colours and their personality traits and meanings.
Feb 11, 2019 | content marketing, Marketing
We just added a page to the Chapter 3 on Contact Marketing. The new page provides tactical information on how to optimize content to get featured.
Content must be presented, formatted and organized in a specific way so that it can get indexed, ranked, found and featured. If you do it right you may also get your content published on the news category of search. This will have a major impact on your visibility. It is something every travel marketer should aim to for.
The new page explains exactly how to optimize content to get featured. The 9 most essential criteria are identified and ranked in order of importance. Normally 4 or 5 tactics are all you need and these cannot be be omitted. More can be added if the keyword is very competitive.
Also considered are off-site strategies including bookmarking and link-building. The page links to information on how to tweak your content so that it can get featured in Google news.
How to Optimize Hotel Marketing Content is important in making digital media work. Content they say is king, but it can only work if it can be found
Feb 11, 2019 | content marketing, Marketing, New & Press
Google News Now Open to All Publishers
Be a Journalist
Getting your blog featured on Google News makes a difference in many ways. Not the least is that it automatically notches up your Authority and puts the article in an expert and trusted class. This will improve trust and set you apart from others.
Not all posts will get into news however, as both the quality of the post and the author can have an affect on this. Google will not approve rubbish authors who are known for spam or affiliate marketing and that are not going to make the grade. Your article also has to follow basic standards of journalism.
Major Traffic Boost with Google News
Neil Patel says you can get thousands of clicks to your site from Google News. In fact, he say your visits can jump by over 300%.
“Smart bloggers, news publishers, and digital content marketers are already tapping into this huge resource for targeted traffic and better search engine visibility. As an example, Search Engine Watch increased its average monthly visits from the Google News sitemap by 329%.”
Well, we can’t all be like Search Engine Watch and it’s not likely that a small hotel or your average blogging site will see this kind of return. Being in Google News is certainly going to increase your visibility and traffic. Google News drives 6 billion clicks per month to publishers all over the world. That’s a lot of traffic.
How to Get your Blogs on Google News
You best bet is to work with an author who can do the work for you. You don’t have to be an accredited author to get on the news. As Google says, news is “newly received or noteworthy information, especially about recent or important events.”
When you look at Google News, you will see that Google is not totally focused on news-related “current events” content. There is now a level playing field for bloggers and all digital media publishers who have quality content and good insights. Style, substance and good journalism still matter. Honesty and objectivity are essential to making it to the newsstand.
It’s vital that your articles are properly structured with links to other quality sites using anchor texts and meta tags that are descriptive and not promotional. It helps to be an expert and write with an authoritative voice. Good journalists research the subject deeply and do not write for search engine optimization. You will still need to Optimize Your Content for SEO.
You must not however write for the news editors as they will decide if the blog is newsworthy. Editors like information to be in order, by the level of importance. So put your best insights and most interesting points first. It must be original and accurate. Be sure that your sources are impeccable and that you credit all original work.
Use Natural Links & Anchor-text
Linking back to your site from a GNA site must be natural. Keywords in Anchor-Text are often a flag to Google that it is promotional. Many GNA site are using only generic text like: read more, view more, check this, visit here, sitename, site name, sitename.com, www.site.com, this, website, web site, here, this website, click here, BrandName
Promoting Your Blogs and News
You can’t just get in the news and forget it. Like everything else on the Internet, you need to have people looking at it and other sites linking to it.
Blog About Your Featured News
Add an announcement about this to your website blog. Also add it to other sites via Guest Blog and link to it from relevant pages where it will make sense.
As an Example: In the image above, you will see one of our articles on “7 tips on how to plan a smooth vacation“. The image above links to the Google News search page that currently displays the blog. We also linked the actual blog with anchor text that simply says Plan A Smooth Vacation. That gives a valid link that will be tracked by the Google Algorithm and added to its rating.
This is the sort of syndication you need to do to keep your news alive for as long as possible. It will not stay on the news site forever, as news is supposed to be current. However, if it’s a popular article and has good quality links to it, it will get to the top of the list and stay there longer.
Bookmark It
Social Bookmarks are not the highest quality authority links but, done right, they will help. A good strategy is to post an announcement of being featured on your top social sites – LinkedIn, Facebook, Pinterest and Scoop.it. Do more 3rd party bookmarks to the blogs and guest posts you created above. This will create a good chain link structure and boost the ranking for your featured news content.
Get Your Website Google News Approved
Getting Your Site Ready
If your content isn’t news, it will not get approved. Google is looking for content that might appear in Media sites like the NYT and it will not accept content that is for promotional. It will not accept product reviews, hotel promotions, island wedding, tour descriptions, tutorials, job postings, and other non-journalistic informational articles.
According to Google “News content should be timely, authoritative, focus on current events, and attempt to adhere to journalistic standards”
Google News also require compliance with its formatting and technical requirements that are listed at Google News technical requirements
Here a quick summary of several important requirements.
- Permanent section headers — No Dynamic organization. Must be permanent and accessible. News should be organization into sections if they cover many topics.
- Permanent URLs — For a “news of the day,” page which changes regularly will not be eligible.
- HTML format — It must be HTML formatted to best practices. Define the content type, name of your publication, language, access (subscription or registration), genre, publication date (W3C format)
- Site Structure- Use a Magazine Style theme with sections for each type of news: Education, Entertainment, Politics, Technology, Tourism and so on.
- About Us – Contact Us – Authors – Media Kit Pages
- Meta Tags and SEO Optimize. This goes without saying, You have to optimize your page with titles, heading, image-altags, keyword focus and meta-tags.
- Site Map -A Google News Sitemap is a great way to further segment your news content.
Navigation and Naming
Don’t call you news site a BLOG. the address you want is NEWS – so for example https://barbados.org/blog is a great site for stroies about island news, activities, tours, visitors stories, reviews and product descriptions. It is not appropriate to just add a NEWS section as it will be diluted with what is essentially not news.
The URL should be Yourbrand.com/News
A distinct Navigation might be
Barbados | Business | Technology | Tourism | Lifestyles | Entertainment | Education
Submitting Your Website to Google News
You need to apply at Google Publishing Center. Google will check that your site qualifies and follows their guidelines. Choose your News Page/Blog to submit and make sure it is newsworthy. Edit out any articles that are not high quality. Google will not accept all self-serving content or anything that is too promotional.
For More on Syndication and Content Optimization
Check out our related pages on Optimizing Content
See our Book Series on Digital Media
Marketing Hotels & Tourism Series: Website | Digital Media | Technology (soon)
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