As summer approaches in Europe, the giants of the holiday market are doing their best to stand out from the increasingly competitive crowd. But as tour operators move into tailored experiences, and newcomers look to embrace traditional hospitality models, who can differentiate the dinosaurs from the spring chickens?
Once the king of summer, the packaged holiday has been suffering from an image problem. At the recent Skift event in Berlin, Thomas Cook CEO Peter Fankhauser called himself a “dinosaur of travel,” and shared his willingness to turn his company into one that meets the needs of modern travelers. To do this, he is focusing on customers’ individuals needs and allowing them to tailor their travel experience. “We need to get into the shoes of our customers,” he said, “and our customers aren’t wearing shoes; they’re wearing flip-flops.” More online distribution, no more seven- or 14-day packages, he continued. It’s all about the individual experience.
Key to this strategy is new brand Casa Cook, an “affordable chic concept” with a strong focus on design. The brand has two successful Mediterranean properties (in Rhodes and Kos), is opening another two soon (one in Crete this summer and another one in Croatia in 2019) and is planning to develop another one in Ibiza. The concept is clearly working, as over two-thirds of Casa Cook customers are new to Thomas Cook. The group launched its hotel fund in March to deliver on the hotel products. Thomas Cook Hotel Investments is a joint venture with Swiss-based hotel property development company, LMEY Investments, to help to accelerate the growth of its own-brand hotel portfolio.
The Airbnb Effect
The tour operator is making such changes to its strategy largely because of the pressure felt from the persistent disruption from Airbnb. While the shared accommodation brand has so far seen most of its business coming from millennials traveling for a few days at a time to urban destinations, it has a strong presence in tourism hotspots in Southern Europe and the Mediterranean. France, Italy and Spain are in the company’s top five destinations of inbound guests, and Portugal is in the top 10. As such, the home-sharing service is looking to expand its horizons in the travel market.
The experience market is the future of travel, according to Jeroen Merchiers, Airbnb’s managing director for the EMEA region, and Airbnb is uniquely positioned for it. The fact that traditional travel companies are looking more and more into home-sharing is “a good sign we’re on to something good,” Merchiers said.
However, Airbnb is also taking steps towards the more traditional hotel market: “Beyond” is expanding its offering to include hotels and luxury properties, and the “Superguest” is introducing a loyalty program (although “more Amazon Prime than Miles & More,” according to Merchiers). Is Airbnb trying to become a hotel brand or an OTA? Not according to Merchiers, but he wouldn’t rule out hotel management—just without owning the real estate.
Will the travelers of the future let go of the packaged holiday in favor of an evolved shared accommodation model? At Skift, Sylvain Rabuel, CEO Europe & Africa Business at Club Med may have an idea why the all-inclusive package holiday is here to stay: “Millennials are starting to have kids. Try spending a holiday with kids in an Airbnb. Good luck!”