European tour operating veteran Thomas Cook Group has acknowledged that “customers continue to shift online” with online revenues for the business up by 18% across the group.
However, specific references to its digital strategy appear haphazardly throughout today’s half-yearly earnings, perhaps doing a disservice to its improvements in this part of the business.
At the highest level, it is getting more online bookings. It says: “On a booked basis, we have grown online revenue by 18% across the group, with particular progress in the UK which is up 33% year on year. The investments in our websites have continued to increase visits – up 5% across the group – and conversion, particularly on mobile, which is up 23%. Overall, mobile bookings have grown by 55%, showing improvement across all of our markets.”
As part of its digital strategy, Thomas Cook Group has some interesting partnerships in place, with the report highlighting its tie-ups with Webjet and Expedia. Webjet now effectively sources Thomas Cook’s non-core hotels, sharing inventory. In the Oct-March period, “the transfer to Webjet…delivered a five-fold growth in bookings on last year, helping fuel a 51% increase in overall bedbank bookings.”
The deal with Expedia was announced last September. Thomas Cook’s city break and hotel-only business will be an Expedia white-label, going live in the UK and Belgium this July. It has been winding down the part of its business in anticipation of the switch.
Thomas Cook will also make some of its own differentiated product available on Expedia. This differentiated product is a mix of its own branded hotels and partner properties, with Thomas Cook going for a quality over quantity approach to what it sells.
Personalization and ancillaries
One benefit of having differentiated product and an improved website is that it can upsell personalized services to customers more easily. During the half, it was able to generate an extra £10 per customer in the UK from offering personalized services, adding that it has started to implement a yield pricing strategy for these ancillaries.
It is also planning to expand its “choose your room” feature this summer, which will be available at 300 hotels. Allowing guests to select rooms is not unheard of in the hotel space, but its “choose your sunbed” initiative is unusual. It will roll this out to 50 properties in the summer, giving guests the chance to pay in advance to reserve a specific sunbed.
This move could be an interesting hotel technology case study in “connecting the CRS with the PMS” – ensuring that hotel staff are aware which and how many sunbeds have been booked, and by whom, and for how long, and then of course policing this on site so that other guests do not simply remove the “reserved” tag and settle down for the day in someone else’s space…
With many hotels still unable to recognise top-tier loyalty scheme members on check-in, the operational and delivery challenges of this should not be underestimated.