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Lastminute looks
beyond London
Hoping to expand its customers and suppliers outside the
capital, Lastminute.com plans to start working more closely
with agents. Rupert Murray reports from Manchester
Ian McCaig, the
INDEPENDENT agents could benefit as Last- Different risks chief executive
minute.com plans to distribute its lifestyle Washington joined Lastminute.com in 2008 after of Lastminute,
products into the English regions and Scotland. several years with Cosmos Holidays. He was at the event
Travel sales director Andy Washington (pictured brought in to revitalise the sales team, challenge
below) said tie-ups with agents to sell products the norms and see what could be done differently.
such as theatre tickets and spas were back on the The fundamental difference, he said, was risk. operators have to worry about moving capacity to
agenda, with more potential in the future. “Tour operators have tried to reinvigorate somewhere else and that takes time.”
He was speaking in Manchester, where he and themselves and go into the dynamic packaging
chief executive Ian McCaig were meeting existing bed bank model,” he explained. “But they are still Margins and secrets
suppliers and encouraging new ones from the set in the ways of load factors. It’s all about bums Lastminute uses its buying power to keep
north-west to join. Some 70% of Lastminute’s UK on seats because if you own the aircraft you decent margins, said Washington. “In my past job,
sales come from London and the south-east, but it naturally have risk. I saw bed banks operating on no margin. We are
is looking to the Manchester and Birmingham “Companies like Lastminute, Expedia and Travel not in that game. What we try to do is find a
areas, as well as Scotland, to provide new cus- Republic have no risk but bring the right product different proposition to get the best price.”
tomers and suppliers. to people and can move quickly in the event of One example of this is the Top Secret Hotels
McCaig said that after using London and the changing trends, natural disasters or even events initiative, which now makes up 20% of hotel sales
south-east as the main testing ground for prod- such as swine flu. In that situation the tour in London and has a loyal customer base. The
ucts, the company was ready to expand. concept is non-branded hotels, and customers do
He added: “Post-2004, it took us a long time to not know exactly where they are staying until
determine what the right thing was for consumers. completing the booking – but by booking relatively
We went through a period where we tested a lot of blind, they get up to 40% off the price.
stuff, and even did very well on adult sex toys for “The hotels get the volume without putting
a while. We think we have figured it now and are their branding out there. It gives them the chance
deepening relationships geographically and bring- to get rid of distressed inventory and allows us to
ing our proposition to consumers throughout the give customers what they want at a great price.”
UK, not just the capital.” The “secret” concept has been expanded over
McCaig also revealed that, while lifestyle and the past few months to Top Secret Holidays and
travel make up about 50% of Lastminute’s sales, Top Secret Flights, which, Washington said,
travel creates 90% of the revenue.
Lastminute in numbers
allowed airlines to give rates they could not
But, Washington said, the two are vitally inter- usually give in the marketplace.
linked.“The holiday market is not loyal at all. We ■ A spa break sold every 3.3 minutes in 2009
don’t show branding on the whole because our ■ 1.4 million theatre tickets sold in 2009 Jetting off
research shows destinations and price are more ■ Website has 1.65m unique visitors a month Another new product includes chartering private
important than the brand. ■ 110m visits to site expected in 2010 jets, thanks to a tie-up with former Lastminute UK
“If the price for one place is more attractive ■ £20m spent on marketing last year boss John Bevan. This is apparently becoming
than the other, they will switch very quickly as ■ 98% brand awareness in the UK popular with stag parties. “Bevan left us to pur-
long as it’s decent product. But we have a very ■ Travel is 50% of sales, but 90% of revenue sue new opportunities but has come back many
loyal base and keep the consumer – a big part of ■ 20,000 new hotels added in past 18 months times with different products because he knows
that repeat business is the lifestyle product. ■ 334 destinations sold in 63 countries our distribution is huge,” Washington said.
“Things like the spa, theatre, music and experi- ■ 750,000 airline tickets sold last year He is optimistic about the future: “We will
ences are time-consuming and labour-intensive ■ Average booking made 28 days in advance, continue growing by selling customers what they
for our team, but it pays massive dividends in up from four to five days in 1998 want and ensure we keep being innovative so that
loyalty and cross-selling.” there are always new products to enjoy.”
10 26.02.2010
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