The travel and tourism sector has had to climb some major mountains of late. Nature has thrown volcanic ash and snowstorms into flight paths, banks have brought the world economy to a grinding halt and new internet and budget operators have gone bust overnight, leaving holidaymakers stranded. For established travel operators like TUI Travel, however, there has been an upside as its brand strength has seen it gain custom as travellers seek security from trusted providers.
Mark Thompson is IT director for TUI’s Specialist & Activity division, one of the fastest growing areas of the travel sector. Crawley-based TUI has four main areas of business: mainstream, which operates the well known package holiday brands like Thomson and First Choice; Accommodation, which sets up the hotel deals; emerging markets; and Specialist & Activity.
Thompson’s PC screen displays a slide showing the 85 separate company brands which make up TUI Specialist & Activity travel; in the last two years a new company has joined his own portfolio every month.
“With plasticine, if you push all the colours together you end up with a horrible brown mess. As a business and in IT we try to avoid that,” Thompson explains of the delicate way TUI manages its various brands and operational centres. “We have a light touch. As a customer you get the expertise of a specialist, but the security of the world’s largest tour operator.”
TUI Specialist & Activity divides into six specific groups — Adventure, Education, Marine, North America, Sport and Specialist — and each group operates a number of brands.
At this time of year, for instance, one of the busiest areas is the ski holiday business that includes brands such as Crystal, Hays & Jarvis and Citalia. The TUI umbrella offers services to the brands to ensure that tours are fully booked and deliver a return on investment.
“A trip to Kilimanjaro needs to have 10 people on it to run, so if the Exodus brand and The Adventure Company have six booked each, we are able to pull the two tours together to make sure a tour happens,” Thompson explains. The rising interest in alternative types of holiday has extended right across the financial spectrum of TUI’s customers. Its Marine arm, for instance, offers holidays ranging from introductions for those looking to learn how to sail, through to a spell in a fully crewed craft in the British Virgin Islands.
“In the last two and a half years our sport division has been growing well as more people travel to Champions League games or to the Olympics. We also provide event management for sports teams and organisations.
“This part of the business was a bit ‘lumpy’ to begin with as it depended on major events like the Rugby World Cup but now we are covering all the top sporting events, that lumpiness is going,” he says.
Another growth sector for Specialist & Activity has been its Education division, which provides school trip services.
“What we’ve seen in Education is that the success of this business is through the relationship we build with the teachers arranging the trips,” he says.
TUI has been gaining business from a new breed of teacher who is used to booking and organising travel through the web and is therefore comfortable with online experience.
As part of the TUI group the Specialist & Activity division uses the company’s bespoke Thomson Reservation System known as TRACS. When mainstream package holiday division First Choice moved onto TRACS it was estimated to offer the organisation savings of £93m a year.
“As a division we are committed to matching flights to hotels, so we use TRACS as our flight database,” he says.
“If we tried to roll out a single IT system to all these brands it would fail,” Thompson says. “We don’t impose system change for system’s sake. All the changes have to be driven by a real ROI and improvements to their processes. Each division within Specialist & Activity has a board-level MD who sits with me to define their IT needs.
“Many of the businesses have been successful as there is an entrepreneurial spirit that runs through them, so in IT we have to be careful not to suppress that. My challenge is to influence and be flexible with the products I have that offer benefits to their customers.
“As an IT leader it’s about the relationship with peers that will drive things to happen through trust,” he explains.
Where Thompson’s team has made the most significant business improvement to TUI is in online support for the websites that the TUI brands operate.
A report by the International Council of Tourism Partners released in early 2011 stated: “In future, technology and e-marketing will increasingly drive the choice of destinations, the tailoring of holidays rather than the packaging of holidays, and new ways of booking and paying for travel. Consumers will also expect technologies to ‘take the hassle out of travel’, inter alia through online visa applications (e-visas), mobile maps, meta-search engines, blogs and podcasts.”
Fortunately for Thompson he is already working on just this and began by standardising the production of websites across the 85 different brands in his group.
“When I arrived there were 20 brands, each with their own website, host and written in a different language, it was nasty. We standardised the technology onto a core CMS and we have built up our own internal resources so that we are in control of our own destiny,” he explains. TUI has its own online development division on the south coast and internal demand is high.
“We run it to cover our own costs and we are easily able to match the prices of India,” Thompson says as to why he hasn’t outsourced development. As for the user experience, like many of his peers, Thompson looks to Amazon for online inspiration. “Customers will judge the performance of your site from their experience of Amazon,” he says.
Online offers TUI a wealth of opportunities, but like retail and the media, many people still want to interact with travel operators in traditional ways. That means printed material and call centres.
“There’s all the stuff we used to do and there’s all the stuff we now have to do,” he says of the situation his business is in.
“People still want the reassurance of talking to people. I remember being in a call centre and there was a caller asking about the height of steps in China,” he says.
Thompson is acutely aware of why these questions and issues arise for the business: the step height question might have comic value, but is also something of real concern to someone with mobility issues, for example.
Thompson sees the next major area of growth and personal contact in tourism being mobile devices. For last year’s football World Cup his division developed an iPad app called iPundit, which TUI used to raise awareness of its Sport division.
“We launched iPundit two weeks before the World Cup and had 4000 downloads. The success, to me, was that 80 per cent of people were still using it by the end of the tournament.” Since then TUI has launched an app for its Exodus adventure holiday brand, which Thompson says will be about inspiration. “It’s call-to-action marketing: it doesn’t make bookings, but will make a reservation request. At the moment I’m keeping the e-commerce out and having a relationship with the customer,” he says.
The move to apps isn’t perfect when it comes to demonstrating return on investment: “Apple is not as open with its rankings as Google,” says Thompson. But he is convinced of the value that apps and mobile devices are going to offer his sector.
“They are brilliant for events management, telling people where to meet, so there’s no more need to carry around maps and reams of paper,” he enthuses.
Thompson arrived in travel via a career in financial services and at PC maker Dell, but TUI has been his longest stay and he’s definitely found the location that suits him.
Asked if there is any similarities between travel and PC manufacture, Thompson smiles. “Every industry thinks it’s different. When I started at TUI they were talking about dynamic packaging of all travel, like flights, hotels and pulling it together as a package in real time. We did that at Dell with the bundles for PCs – it is exactly the same concept.
“I could never get excited about PCs and insurance. I picked up that it was important to work in an industry that you have an affinity with. Everyone has a travel story. When I went to the pub no-one asked me about the state of the PC industry.”
Luckily for Thompson the affinity has paid off. Not only has a move into the travel sector allowed him to see some amazing parts of the world, but it has also kept him abreast of what the most important people – the customers – need from a travel company CIO.
“The Olympics in Beijing was a highlight. On one of those trips you appreciate what is involved and how it is run like an event business and was so professional. It made me realise that climbing Kilimanjaro is an event in someone’s life, and we should look at it as a business of event management rather than a holiday provider.”