The past three years have been punishing for the travel industry and for business travel suppliers in particular. The American economy went into freefall in January 2001 and Britain followed five months later. Now, the outlook is improving: global economies may not have surged but they are not getting any worse – cause for cautious optimism. Many companies spent more on marketing to fend off the worst of the recession and are continuing to do so to maintain the momentum.
Targeting business and leisure customers can be undertaken simultaneously but with different messages. Consumers are largely price and destination-driven, business travellers are looking for value-for-money but also convenience and flexibility.
And business travel marketing campaigns tend to be more sophisticated – not necessarily in tone but in complexity because they have to operate at several levels, targeting the traveller and travel buyer, as well as travel agents. Suppliers across the range – airlines, hotels, rail – have taken and continue to take an interesting variety of routes to the target market.
Pie in the sky
When things got bad, British Airways grasped the nettle, invested more money in marketing to turn the situation to its advantage. Says senior business marketing manager for the airline Stuart Beamish: “In January 2002, in an attempt to stimulate the market, we used, ‘It is better to be there’. We wanted to shout about our advantages when fewer people were travelling – especially on long haul.” This was backed by email activity aimed at the airline’s loyalty cardholders.
Above-the-line, the airline runs the gamut of exposure – TV, outdoor, press, radio and regional and local messages. BA also looked outside the box, including advertising on the back of ATM receipts and ambient activity in underground and rail stations.
Business class travel had already become less about champagne and luxury and more about being in a fit state to do business on arrival, and BA traded on that with emphasis on flat bed seats in Club World.
At the same time, the airline was selling itself to business and leisure travellers as value-for-money on short haul routes, promoting low fares backed by what Beamish describes as ‘the best network and schedules into Europe’. He adds that choice and flexible fares are also vital factors for business travellers, not always provided by budget carriers.
Flybe bridges the gap between full-cost and cut-price carriers. It is the only low-cost airline to have a premium cabin and trades on that. Says trade marketing manager Linzi Hill: “We increased the baggage allowance from 20kg in economy to 30kg in business class and emphasised lounge access. We invested in the business market last year and are seeing the results.” And in September 2004, Flybe launched flybe2b.com, a dedicated corporate booking tool that gives full travel and entertainment management information to customers.
Says Hill: “Our B2B campaigns are more targeted than our consumer and include direct mail, telemarketing and segmented emails, backed by above-the-line activity in business press, as well as regional press such as Belfast Telegraph and The Scotsman; and business publications including Business Travel World. We email consumers weekly but only communicate with business travellers when we have relevant news,” she says.
Off-the-rails
Rail companies have also been affected by the rise of low-cost carriers, especially on Scottish routes – air is the dominant means of travel between Scotland and London. Airline VLM’s Liverpool and Manchester services benefited from the suspension of Virgin Trains’ west coast main line services, while track was upgraded.
“Because of the disruption, it was even more important we kept in touch with travellers to explain what was going on and to encourage them to keep faith,” says Virgin Trains’ commercial director Graham Leech. Virgin communicates direct with companies as well as using business press and other media. To reinforce that, communication will largely be above-the-line for the next couple of years, using direct mail and email in the longer term. “Our aim has been to get a better database, with profiling, so that we can use direct mail,” says Leech.
For leisure consumers, direct mail is the main vehicle, now moving towards electronic media. To counteract the effect of the dampened economy, Virgin also became more flexible in the type of deals it would consider.
Recognising that first class travel needed to be imbued with a broader message, GNER has put the emphasis on the productive use of time gained by travelling by rail over air or car – working, talking to colleagues, relaxing. Says senior product manager Moray Shutt: “We also talk about our high levels of service and training in advertisements.”
Shutt says that although business and leisure customers are both looking for value and quality, they mean different things to the two markets. “Consumer is about price and destination whereas business is about using time effectively.”
GNER advertises in a range of business and trade titles. It supports regional consumer titles along its routes, plus outdoor, radio and, launched in October, a TV campaign in the Yorkshire area. In addition, the company directly targets financial and IT directors and travel buyers. “We are most successful where we have multiple contacts within one company,” she says.
Again, email is also important. “We are planning to email members of our loyalty programme GNERtime,” says Shutt. GNER’s franchise expires in April 2005 and provided that is renewed (the company is on the preferred list), it will look at using SMS as well.
“We recently appointed a B2B manager, Robert Payne, so we will be able to take a more sophisticated approach to that market,” says Moray Shutt.
Power napping
The hotel market is more heavily segmented than airlines, with options ranging from five-star luxury through to three and four-star and boutique, to budget. Budget operator Travelodge benefited from the downturn in the economy because business travellers were looking to save money.
Where budget hotels used to be perceived as little boxes by the side of the road, they are now in city centres and Travelodge plans to market that idea to keep customers interested and retain business, according to head of sales James van Thiel.
The company uses mainstream advertising channels ranging from The Times to Daily Express, to capture leisure and business markets and is looking at specific business publications such as Director, as well as segmented direct mail and electronic mail. Says van Thiel: “We speak to large corporates direct through our sales force. In addition, we have relationships with agents and hotel booking agencies, from whom we still see significant business but more is now coming direct as well.”
Travelodge markets the same message to business and consumer audiences – a quality product at a good price – but with a different strapline.
Hilton increased B2B activity to maintain market share during recession but also stepped up attention to the leisure sector. Says Andrea McKay, director of brand marketing for Hilton UK & Ireland: “The reduction in international business travel mostly affected London hotels. However, occupancies were maintained because Hilton UK & Ireland increased marketing efforts to focus on the important domestic leisure market, successfully shifting the business mix to increase leisure business.”
The group has now redirected B2B marketing efforts by investing £1.2 million in its meeting offering, 0Hilton Meetings, relaunched in June 2004, and installing high-speed Internet access in bedrooms in 60 properties.
Hilton communicates directly with agents and decision-makers via a newsletter to Elite Club key bookers. Says McKay: “Hilton’s consumer marketing focuses on tactical campaigns in national press, online and via direct mail – traditionally run at key buying periods. Business marketing focus is on product awareness and sales team support.”
Whether at the high end or the lower end of the market, suppliers in the business travel industry have their work cut out to attract and retain business customers. The competition is hot and confidence in the economy is not so strong that companies are spending money willy nilly. The eye is still on the bottom line and only where quality matches price will suppliers win their business. And as many suppliers in the industry have proven, there are creative and innovative ways to communicate that.
