The Growth of Multi-branding in Tourism
One of the most notable megatrends we have seen in the tourism industry has been the spectacular growth of multi-branding in recent years. This is increasingly the practice of large companies which offer a diversity of products and services managed and marketed under identifiable brand names. Its hardly a new practice in tourism but its is a growing practice for larger players in the industry.
I’m sure every ETB Travel News reader will be aware of at least some of the Travel Corporation’s key brands including Contiki , Insight, Trafalgar, AAT Kings, Busabout (just to name five). Each of the Travel Corporations’ brands have a distinct identity in their target market and in the case of Trafalgar and Insight compete vigorously with each other. In the tour wholesalers sector we are seeing other major groups emerging. Multi-branding occurs in every sector of the tourism industry.
Increasingly major airlines are multi-branding to present a distinct identity to specific sectors of their target market. Singapore Airlines last week announced that it will merge its low cost carrier brands Scoot and Tigerair but even with the merge it will still operate Singapore Airlines (premium long-haul and Silkair (full-service short/medium haul) brands.
The hotel sector has been a leader in multibranding with the Accor Group (20+ brands) offering the broadest selection of brands.
In the attractions sector Merlin Entertainments, Ardent Leisure and the Disney Corporation offer many brands which often better known in the marketplace than the parent company.
In the examples mentioned above the practice of operating and marketing multiple brands in the same general sector is known as horizontal integration. However there are many companies which may offer multi-brands in different sectors of the service chain. this is known as vertical integration. Flight Centre has a number of travel agency brands among its 25 various brands (including Flight Centre, Escape Travel and Students Flights) however by owning its own wholesalers infinity Travel it is also demonstrating that it is practising both horizontal and vertical integration. One of the most compelling benefits for large companies which multi-brand is that a large company can provide the product and service intimacy of a small company if a unit of its management and staff focus on a specific market sector.
As the global travel market has become larger and more diverse, it is no longer possible for any tourism business to be all things to all people. Flight Centre CEO Graham Turner was one of the first travel agents to recognize this trend and multi-branding has worked very well for the Flight Centre group to harness its skills and abilities to be leaders in various segments of the travel agency market while being able to harness common resources such as IT and research and in-house training to benefit the operation of all its brands.
It is certainly clear that once a business reaches a particular threshold in terms of size and the diversity of its target market multi-branding is certainly the most effective management, operational and market strategy to reach out to customers.