Australia-headquartered Flight Centre was established in 1995 in Sydney as a pre-internet era travel agency. Today it has 1,300 stores worldwide — including in Australia, Canada, New Zealand, South Africa, the United States and the UK, where it operates 80 stores — and conducts much of its business online, offering customers flights, holidays, hotel bookings, car hire, tours, travel insurance and visa services.
Business for the company is booming. Flight Centre Travel Group’s first-half results for the six months to the end of December 2017 saw net pre-tax profit up 27.7% to $139M AUD (US$108M ) and revenue up 5.4% to $1.7bn AUD (US$1.3B).
Sense of identity
However, even for a major player, David Owen, head of leisure marketing for the brand, acknowledges that the online travel space is rife with challenges and that carving out and maintaining an identity is crucial. “One of the main [challenges] for every company is the number of really good competitors out there,” he says, adding that it is therefore essential to define exactly “what you want to be in that marketplace…making sure your brand represents something”.
The personal touch
For Flight Centre, that something hinges on marrying a wide-reaching e-commerce with a “big offline business”, an approach that requires a “holistic brand message to make sure the two line up”, Owen says
While there are those customers who “will be happy booking online in purely a ‘book and go’” manner, Owen emphasises that Flight Centre’s ethos extends way beyond the purely transactional.
“We offer more than that whether you book online or offline, and I think that’s valuable to airlines and to all our partners,” he says.
“Really it’s about our people. If you book online, we have a call center that deals with those bookings, and when you book in a shop, it’s about making sure there’s a person at the end of that.”
Value over price
One of the things that Flight Centre is doing differently is nudging its customer proposition away from price [paywall]. Earlier this year, the company dropped its ‘Lowest Airfare Guarantee’, a slogan that used to appear prominently across its customer touch-points.
Owen tacitly touches on this development, arguing that people’s reasons for booking with a particular travel company will have “changed a little bit”.
“I think people really thought [travel e-commerce] was going to be price driven, but a lot of companies are showing that it doesn’t have to be that way online, that you can get a brand message across, reasons to book with a particular company,” he says.
“For us at Flight Centre that’s a message about trust, about brand loyalty, and not necessarily just being the cheapest on the market.”
Flight Centre messaging
Marketing is clearly key to driving brand and product awareness and Flight Centre is a big hitter, spending $95.6M AUD globally on sales and marketing in the latter half of 2017. The figure marked a fall from the $105.3m AUD spent in the same period last year, the result of a shift away from paid search and a decreased spend on ultra low-price online brands Aunt Betty and BYOjet.
Its marketing spans an array of media, platforms and channels. From search, digital display and social (it has more than 100,000 Facebook followers), to manifestations of the brand in the physical world, whether that’s press and out-of-home advertising or the networked digital screens in its stores carrying timed promotions.
It also regularly collaborates with partners beyond the standard retailer-supplier basis, joining forces for marketing promotions for instance. In January this year, it launched an Australia Day promotion that offered cut-price deals on holidays Down Under, the result of a tie-up with Etihad and Virgin Australia.
The very nature of Flight Centre’s business means that its products, offers and consequently its marketing are in a constant state of flux.
The result is a marketing department where “a regular collaboration between different parts of the business” means that “everybody knows exactly what’s going on”. “The key part of this is to make sure that alignment is there,” Owen says.
He cannot stress enough the need for seamless connection, warning that to ignore it is commercial folly.
“If you have two different businesses operating at the same time, one online and one offline, and they’re not seamlessly connected, it’s very, very dangerous for the business,” he says. “People won’t really understand who they’re buying from and what you represent. So that seamless experience really needs to come from an alignment of those different departments working together at the same time.”
Partners for life
Not only are Flight Centre’s relationships with its customers important, but equally so are its relations with suppliers and partners.
“I think [an] airline’s value [is] having a business that has highly trained staff and people that really understand what customers need,” Owen says.
There are more than 2,200 organizations working with the Flight Centre Travel Group, making it one of the largest and most successful independent travel retailers in the world.
“For us it’s really making sure working with airlines, selling online or offline, that we really build up a good partnership,” he says. “We’ve got very good partnerships with the airlines, but you’ve got to keep maintaining those and you’ve got to work with your suppliers and partners to understand why they would want to work with you, what you can offer them in a changing landscape.”
In these tech-centric days, talk of a changing landscape conjures up the notion of innovations like AI, augmented reality and VR. Tech innovation is an area Flight Centre views with interest.
Accordingly, in Australia, the company has been working on voice-activation technology with digital agency Versa, while it has also introduced virtual reality into some of its stores to allow customers to ‘visit’ destinations.
“I think with e-commerce and tech innovation, there can be a blurring of the line between those two things at times, but if you get that wrong, that can cause problems,” Owen says.
While it’s important not to introduce new tech for the sake of it, true innovation relies in no small part on intuition and foresight, a combination of factors that comes with no small degree of risk.
“Customers probably don’t really know what they need until it’s actually happened,” Owen says tellingly. “I think technically at the moment anything is possible. [Successful tech innovation] is about bringing it into your business and making sure that customers need it and your business can operationalize it.”