TravelMole Interview: Philip Alford, University of Luton CeTR

Agents and operators need to ‘get lighter on their feet’ and adapt to the changing needs of holidaymakers because they are losing market share, and can no longer play the ATOL protection card to win consumers. This is according to Philip Alford, a leading researcher into the application of technology in the travel and tourism industries at University of Luton’s Centre for Tourism Research. He told TravelMole: “In order to cater for the needs of the ‘new consumer’ operators are bolting on new tools to existing reservation systems, but this is not the answer. Things like regression testing costs are not sustainable and will slow down the ability of the industry to respond to the new consumer.” Mr Alford describes the “new consumer” as someone who is willing to shop around for their holiday, wants more flexibility, is less loyal, more price sensitive, books holidays later and wants to be better informed about their choices. Although Mr Alford accepts that the vast majority of travel sold is still package holidays he adds: “You ignore a trend at your peril. Low cost airlines flying to the Med are already beginning to make a dent in the traditional package market.” Operators are also losing share to online players according to Mr Alford. He said: “The need to fill resort beds and charter seats is a driver for the operators, and the seven and 14-day packages were a good fit for the economy of the industry. But this product-driven model is not sustainable. “In the past operators had exclusive access to product but the internet has changed this, it is a real leveler and makes the product more transparent and more accessible to the end user. Also, the legacy system is a barrier that the new kids on the block like lastminute.com and OTC don’t have because they joined the market later.” Mr Alford says operators need to move away from a product-driven approach and develop their understanding of the consumer to build loyalty. He said: “They have people in their resorts for two weeks at a time, which is a good chance to learn as much about them as possible, and input this information into CRM. “Operators are in danger of losing ground to the online sector, which is growing fast based on a three plank strategy.” He says, firstly, online players have got the technology right, secondly they are good at building a relationship with their customers and getting information about them, and thirdly they are starting to buy suppliers which is making them stronger, like lastminute.com buying Holiday Autos. Mr Alford says that the reliance of operators on selling packages based on the security of ATOL protection is flawed. He said: “The consumer understanding of holiday protection is limited. They either don’t know about it or they don’t care. They haven’t been properly educated about it by the in the past. It is a mistake for the trade to get sucked into this too much.” So, the answer? Mr Alford says a complete overhaul of legacy systems is unrealistic and would be too costly. He says instead the industry should be working towards developing a flexible solution, requiring more constructive relationships between the various parties in the supply chain. He said: “At the moment it is quite a complex supply chain with some operators working with 10 or 15 chains of distribution, and with this complexity you get more cost.” Mr Alford says he hopes a solution to this problem can be found by TOWARD Europe, of which his Centre for Tourism Research is a member. He believes that the involvement of a ‘neutral body’ like the university – a source of up-to-date research and objective opinions – will benefit TOWARD.