Niche operators must diversify

TravelMole Fast Conference Special: Succeeding in niche markets doesn’t just involve finding a niche and sticking with it – you have to be dynamic.

Speaking on the panel at this week’s TravelMole Fast Conference, Somak Holidays chief executive Ash Sofat said: “Niche markets don’t stay niche for long – if you look at city breaks, that used to be a niche market but it is no longer because the arrival of low cost airlines and the internet means everyone is doing it.”

“The risk for niche operators is that they won’t stay that way – so the issue is how to diversify.”

Another reason to diversify is to generate repeat business, said fellow panel member, TIPTO chairman and Superbreak Mimi Holidays sales director, Ian Mounser. “The narrower the product, the smaller the chance for repeat business and the greater need to diversify, but at the same time not over-complicate”, he said.

In the audience was Jonathon Wall from Elman Wall, who agreed: “There is a danger of niche businesses becoming one-trick ponies. A specialist to the US would lose money if people go off the destination because the dollar goes the other way.”

Norwegian Coastal Voyages head of business development, Laurence Hicks said his company had diversified from its original product in a bid to get holidaymakers coming back.

The operators offers similar style cruises as its Scandinavian and Polar offerings but to places such as the Galapagos Islands and Chile. He said: “What we are trying to do is to give our customers another niche offering from within our portfolio. This has really paid off – we have trebled our volume to Antarctica in the last two years.”

Advantage Travel Centres head of commercial, Julia Lo Bue-Said was also on the panel. She said businesses with a strong brand find it easier to diversify. She used the example of Superbreak’s decision to extend its offering beyond the UK, which she said was readily accepted by agents that trusted the Superbreak brand.

Mr Sofat said that operators and agents didn’t just need to look to travel when diversifying. He said: “Operators want to look at cross fertilising businesses, like Saga’s financial services products which are very successful.

His own company is in the software business providing technology to operators.

“There is a risk involved in diversifying but you have to because the market keeps changing”, he said.