Using the occasion of its announcement that it has cut its losses, Europe’s largest travel company, the TUI Group, announced that that it plans to drop the UK’s First Choice and Thomsonbrands, as well as other brands in its portfolio. CEO Peter Long said an overarching Tui brand would gradually be phased in over the next couple of years. “We will build on our global brand and we will do this by migrating our brand in a phased and measured way to one brand—the Tui brand,” Long said, adding, “We will start with some of the smaller markets, initially in Holland and France and then on to Belgium the Nordics and the UK.”
Overall, Long said, it would take two to three years to migrate all the brands, with the UK coming last. He explained that the company will finance the move to one brand “through operational efficiencies and further additional revenues.” Thomson is one of the UK’s largest brands, having been created 50 years ago this year. First Choice was originally launched as Owners Abroad in the 1970s, re-branding in the 1990s.
In addition to First Choice and Thomson, TUI owns more than 70 other smaller brands in the UK, including Crystal, Hayes & Jarvis andSovereign. The announcement also comes in the wake of the merger late last year of TUI with parent company TUI AG, resulting in an integrated tourism company that owns hotels, a cruise line and various other products globally.
INBOUND INSIGHT: At least in the UK, industry members believe that this is a move to consolidate purchasing and marketing from an unwieldy 70 brands smaller brands to give them greater efficiency and negotiating leverage to play hardball on product development pricing. The downside is that one brand may not fit all.
The announcement did not generate unanimous praise. One skeptic commented on the TTG article reporting the move:
“Theodore Levitt in his book ‘The Marketing Imagination’ warned against the tidy mind marketeer . This change clearly from the tidy mind marketing department , will do no harm but waste a lot of money and effort for no real gain. Also it will then result in a centralised marketing view and thus result in less effective marketing in the source markets . Thomas Cook wasted a load of money rebranding as well!”
