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Thompson takes on a tough challenge

Posted in General, Marketing March 28th, 2007 by Branwell Johnson

Former Honda marketing guru Simon Thompson has picked an interesting time to leave Motorola for lastminute.com.

His newly chosen home is about to come under an intense assault from the traditional tour operators it once appeared to have rendered archaic and unfashionable.

This week saw Thomson Holidays owner TUI AG reveal it planned to merge with First Choice. Only a few weeks ago Thomas Cook announced a similar merger with MyTravel.

This is all subject to regulatory approval but the portents are not good for lastminute.com and its online peers Opodo and eBookers. For a number of years lastminute.com, under CEO Brent Hoberman, was one of the few shining examples of a homegrown internet success.

Together with other online travel companies, lastminute.com seemed to dance rings around the lumbering behemoths of the traditional tour industry with their fixed rate holiday packages, retail travel agency overheads and overall lack of 21st century internet sexiness.

But now the flip flop is on the other foot. The “big four” tour operators have been too busy for years fighting for market share amongst themselves and trying to ride out the constant crisis that have affected their businesses, from the tsunami to avian flu and terrorism, to turn their full firepower on the digital rivals.

But over the past 12 months the veterans have been investing heavily in their own web services and the travel products they offer. Now consolidation is on the cards they will have even more resources at their command and less distractions.

Both Thomas Cook and TUI have declared that they are going to aggressively pursue expansion via the web. TUI is also determined to make its Thomsonfly budget airline operation a serious contender to easyJet and other low cost flyers. Chairman and CEO Michael Frenzel said last December: “Our airline business grants us control and access to sales of hotel and other tourism services.”

Individually the tour operators already outspend their online rivals in marketing and merged companies will have even deeper pockets to spend on in-house talent and campaigns.

Thompson was the architect of the highly praised Wieden & Kennedy-created Honda television ads but lastminute.com is unlikely to pursue such traditional advertising routes. Insiders suggest he is not wedded to TV and relishes the challenges posed by digital and interactive marketing. But he has little experience of travel and holiday marketing and will now find himself at a company on the defensive in a viciously competitive sector.

Lastminute.com, now owned by US company Sabre Holdings, does have recognisable brand values, a loyal customer base and is far advanced in creating the kind of social community “vibe” the traditional companies envy.  However, Thompson is going to have to dig deep in his bag of marketing ideas to keep lastminute.com from being overwhelmed by the new titans of the travel world.