EasyJet is launching a package holidays offering, saying it sees demand for a new way of doing things despite the demise of Thomas Cook.
EasyJet is launching a package holidays offering with data firmly at the centre as it looks to create a more tech-focused option for customers.
EasyJet’s chief executive officer, Johan Lundgren, explained on an earnings call this morning (19 November) that: “EasyJet packages are going to bring a proposition that consists of flexibility, great hotels and great value.”
He added that the brand will be filling a perceived gap in the market: “The package holiday market is not reducing in size but we saw that the players in here (some of them successful) did not have what consumers want.”
EasyJet’s packages will launch first in the UK before being rolled out across the brand’s core markets with the aim of building a scalable business.
Lundgren promised it would be a “higher quality product” for consumers with new technology improving the consumer experience.
“We are going to have best in class technology” he said, noting that it would use technology instead of holiday reps for customer feedback. That means that instead of having holiday reps in resorts and hotels to answer queries, technology will enable customers to provide real-time feedback.
He explained: “The use of data is going to help us manage. We are not going to have teams of reps to fly to hotels. [Instead] we will religiously measure through data.”
EasyJet already has 500 hotels on its books, with plans to expand this to 700.
Lundgren explained: “We have been working with them and we know these are some of the top hotels out there. We don’t have to check whether they are still four and five stars on a daily basis.”
Despite confidence in the new proposition, EasyJet wants to make the holiday offering doesn’t “cause a distraction” for its airline business and promised to keep both as separate as possible. EasyJet package holiday will be run by a separate team with a separate P&L in order to get “clear accountability” and ensure the right skillsets.
The launch comes in the wake of the collapse of Thomas Cook, which filed for administration in September. That led to the closure of more than 1,000 stores, as well as stranding hundreds of thousands of holiday-makers abroad.
Commenting on the difficult market, Lundgren said: “The cost of disruption is about to ruin this industry unless we get a hold of it.”
He added: “We want to be in charge of our own destiny. We are not depending our success based on others’ difficulties.”
Innovating with data is one of EasyJet’s strategic pillars, implemented when Lundgren joined in 2017. As part of this focus, he restructured the marketing department, recruiting a chief data officer, a digital director and a head of loyalty.
Speaking to Marketing Week last year, EasyJet’s CMO Lis Blair explained: “The creation of the chief data officer role was about strengthening our capabilities there and recognising the opportunities within data, not just across commercial but also in engineering and crewing – all of the things that are fundamental to what we do.”
The launch of package holidays comes as EasyJet reports a 26% fall in pre-tax profits to £427m for the year to 30 September. However, annual revenues rose 8.3% to £6.4bn as it increased capacity, although total revenue per seat fell 1.8% to £60.81.
Lundgren said:”It’s been a challenging 2019 but ended in quite a strong fashion.”