Specialist operators are benefiting from consumers using more specific search terms when looking for holidays online, according to Travelzest boss Chris Mottershead.
The changing market is even enabling specialists such as Travelzest, which owns a portfolio of mainly direct-sell specialist tour operators, to compete with corporate giants such as Thomson, the former Thomson Holidays managing director claimed.
“We couldn’t have done that in the 1990s,” he said. “In the past customers would tap in general [holiday search] terms. Now they know what they want and the searches take you to a specialist.”
Operators with a specialism will benefit as consumers are directed to them when searching for specific requirements online and there is no need to attract customers based on price, Mottershead said at an Institute of Travel and Tourism dinner at the House of Commons last week.
“If people want a discount they can go elsewhere. I am making 32% margins and concentrating on driving up volumes,” he said.
Financial results for the year to October 31 2006 showed Travelzest’s turnover was £19.2 million and pre-tax profit had increased more than fivefold to £404,000.
Mottershead, who said Travelzest deliberately ran its specialist businesses as separate companies, criticised the way corporates have managed their specialist businesses.
“We are more conscious of leaving businesses separate. At corporates there is a tendency for people to tinker. TUI destroyed their specialist businesses.”
He ruled out Travelzest selling through agents saying they have less specialist know-how and criticised multiples for their lack of knowledge.
“About 40% of Lunn Poly staff had never been abroad [when I worked there] – how can you impart knowledge when you do not pay the staff anything to go abroad in the first place?”