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November 2019, Amsterdam
Legacy vs innovation and how to navigate travel turbulence
Ryanair, Virgin Atlantic and Dutch brands Zoku and Bidroom shared insights at EyeforTravel’s Digital Strategy Summit yesterday. Pamela Whitby reports on the highlights of the session
You can say what you like about Ryanair’s Michael O’Leary but despite recent turbulence in European skies, the low-cost Irish carrier has managed to keep doing what it says on the tin. And, in 2019, that will mean flying 138 million passengers a year at the lowest average cost to some 200 destinations across Europe.
Speaking on Day 2 of the EyeforTravel Digital Summit yesterday, however, Ryanair Digital Director Dara Brady challenged the idea that the digital drive that got underway in 2013 is the main reason for Ryanair’s success (relative to other airlines). Nevertheless, the numbers, since revamping its “terrible website” and embarking on a mobile-friendly, digital journey, driven by data and led by the customer, tell a promising story - a billion website visits this year, over 42 million app downloads, over 34 localised websites, €1-billion in profit from digital assets, and so the list goes on.
“As digital director I could say ‘what a great job’ but I’ve been asked to consider the substance within this,” said Brady, who was speaking on the subject of avoiding commoditisation and different strategies for the digital age.
The ‘real differentiators’, on which Ryanair’s service has always been based - namely price, choice and punctuality - remain the cornerstone of its continued commercial success
While Ryanair’s digital strategy has undoubtedly delivered results, Brady is clear that the ‘real differentiators’, on which the service has always been based, namely price, choice and punctuality, remain the cornerstone of its continued commercial success. The rest, customer experience, digital and technology, are nothing more than ‘supporting differentiators’ in helping the airline sell more products and services.
What Brady seemed to be saying, a view echoed by others over the course of the two days in London, is that every business is different, and the most important thing is that firms execute well on their core offering. In other words, do what you do well and you can survive the current market turbulence.
Matt Webster, a customer experience expert at Virgin Atlantic, reiterating some of the feedback the airline had received on the quality of its cabin-issued socks, put it like this: “If you can’t afford to do it, don’t f***in’ do it.”
For Virgin Atlantic the physical experience counts hugely and it has worked with a range of people and organisations - from furniture and handbag makers to retailers, restaurateurs, candle makers and Instagram foodies - to deliver an edge. Ultimately, however, if you are working to avoid commoditisation, the digital and physical experience must be complementary, and for Webster that is about “working closely with colleagues and breaking down silos”.
Innovation on the edge
Low prices may still be Ryanair’s biggest selling point, but the opposite is true for Zoku, a Dutch company that is innovating in the market for extended stays. Hans Meyer, the original founder of CitizenM Hotels, and now the co-founder of Zoku, who also delivered a morning keynote, has that quiet confidence of somebody who knows he is onto something big. He certainly doesn't feel like he has to say that he is the 'Airbnb of the extended stay segment'!
The world doesn’t need more stuff, it needs smarter solutions
Hans Meyer, co-founder, Zoku
According to GBTA, business travel is expected to be worth $1.7-trillion by 2022, and road warriors, typically a company’s most valued employees, are demanding more from the experience. But, not only are more people travelling for work than ever before, they are increasingly on the road for extended periods of time.
Speaking in London yesterday, Meyer, said he believes that “the world doesn’t need more stuff, it needs smarter solutions”. Design-led and built from the ground up with consumer input at every stage of journey, Zoku’s goal is to tap a niche market where to date there has been no innovation. And what they have found is that in fact people are willing to pay more for brands that go the extra mile in cities where you can no longer compete on location or price.
Interestingly, according to Meyer, innovative companies with employees visiting Amsterdam have found that their mployees are more productive and, as a result, deliver more to the bottom line when they stay with Zoku. In fact, says Meyer, only half joking, " Zoku is becoming an extension of the corporate HR department!"
On the issue of talent, Michael Ros, the founder and CEO of Bidroom, an online travel community with 250,000 members that gives guests the best deals while eliminating commissions for hotels, said loyalty must starts at home. “First and foremost, you need to look after your own staff first,” he says, but more on what Bidroom, another Dutch company, are up to on EyeforTravel.com next week.
Cause for concern?
Is Meyer worried about the fact that hotels like Accor are ramping up to meet the needs of the more demanding consumer, and the growing number of business travellers? On Day 1 Martine Gorce-Momboisse, SVP Global Marketing Economy and Midscale Brands at Accor, described the revamp of IBIS, a legacy Accor brand with 1200 hotels in 67 countries which has been driven by consumers who are demanding:
1. Consistent but not uniform experiences
2. Technology that makes life easier
3. Diverse human and emotional experiences
The short answer for Meyer is no. “I’m totally not afraid [of competition] because it keeps pushing us in the direction of innovation…[having said that] we are in a pretty comfortable position but we are also humble because you can lose that [momentum] very quickly.”
Nor is Bidroom worried about Amazon Prime entering its niche; Ros believes he can hit a million users by 2020.
The companies seem to be on a roll. Bidroom has developed a partnership deal with Visa, and more are on the cards. Meanwhile, Zoku is making its mark in Amsterdam and the reviews speak for themselves. It will open properties in Copenhagen and Vienna by 2020, and Meyer says the group also has plans to enter the residential city space, which is also long overdue for disruption and innovation.
If nothing else Meyer’s presentation at EyeforTravel in London may just put another head on a Zoku bed. Ryanair’s Brady said only last week he’d been in Amsterdam and had he known he would have checked out one of these hybrid hotel spaces with a distinctly Dutch touch.
More on Zoku here - EyeforTravel Jan 10, 2019 – Zoku: New cool kid on the extended stay block. If you missed London, why not join us for one of our second half events in Chicago (Oct 28-29) or Amsterdam (Nov 26-27)