Blume takes second stab at package venture

Wotif chief executive Scott Blume is nothing if not brutally honest.

“You are looking at the man who failed spectacularly with the first dynamic packaging product in Asia Pacific,” he revealed to Travel Today. “I launched it in Singapore in 2005 [while CEO at Zuji] with 400 airlines and 100,000 hotels and told consumers, ‘go for your life and make your own package’.

“That was a great idea Scott, well done,” he added, mocking his own strategy. “It failed spectacularly.”

Blume’s frank admission came as Wotif announced the launch of packages to 10 domestic and two South Pacific destinations – Vanuatu and Fiji – as part of a move to expand beyond its accommodation roots.

He will be hoping for better fortunes second time around.

Wotif will gradually add to those initial dozen destinations as it aims to convince its database of three million customers to buy packages through its website, rather than via bricks and mortar agents.

This time however, Blume has deliberately limited the product to avoid bamboozling the consumer with a head-spinning range of options.

“We’ve been able to get wholesale air and wholesale hotel rates and put packages together which is a first for Wotif,” he said. “We have never done anything in wholesale before.

“But we are merchandising a smaller number of hotels in each destination to make it as easy as possible for consumers. For example we have 13 properties in the Gold Coast. It’s easy to trade up and easy to trade down. It is really simple and really competitive.”

Blume suggested there was “no question” Wotif could take market share off bricks and mortar agents, who, he argued, have successfully marketed packages offering a limited choice of hotels.

Consumers are generally more concerned about the location, rather than the property itself, and equally are not choosy about which carrier they use, he explained.

“I am blatantly trying to compete with offline. We are merchandising the packages very simply, in the same way you go past a Harvey World Travel and see a package to Phuket for $999,” he said.

“We’ll extend the product range to the top 20 destinations where Aussies travel. That will be our focus. We have people in Singapore and Hong Kong where we can get good content, and also in Phuket and Bali.

“But I don’t want to be all things to all people. I’m not going to have a package to the Amazon or to Nice. But we’re sure as hell going to have packages to the likes of New York and Los Angeles.”

As well as leveraging its customer base – a key objective under Blume - he described the move into packaging as a “specific strategy” to increase the average length of stay for Wotif bookings which currently stands at 1.87 nights.

But Blume acknowledged that Wotif will need to drive consumer awareness of its packages after conceding it had failed in the past to effectively market overseas product to its database.

Ask 10 Australians holidaying in Bali where they book their domestic breaks and 80% would say Wotif, he claimed.

“But ask them where they booked their Bali holiday and none of them would say Wotif. None,” Blume said. “I have this massive customer base that knows me, loves me and trusts me, but we have not communicated to them that we have great rates in Asia.”

To a large extent, the business hasn’t had to because the growth of its core Australian accommodation business has been so strong, he added. But with that growth slowing, the need to leverage its customer base with new product and revenue streams has risen.

“We have to tell our customers about the packages, then say it again, and again, and again. You have to pound it,” he said.

“Take our flights business. We were sending out emails without any flight information. We were promoting Cairns and not even including details about flights. Madness.

“We need to get into the consumers’ consideration set. I can’t flick a switch and make that happen overnight but over time, I believe we can do it.”

See tomorrow’s Travel Today for part two of our interview with Scott Blume.

Blume takes second stab at package venture