Simon Pardoe - Marketing & Business Development

Whilst it is something that my client, The Healthy Holiday Company already knows,  it’s good to see that it is being endorsed by third party research:  sporting holidays are destined to become a winning trend.

According to the latest survey of the World Travel Monitor, commissioned by ITB Berlin, over the last five years there has been a double-digit increase in sporting holidays among European tourists, which has even overtaken cruises, which five years ago ranked ahead of sporting holidays. Germans in particular are keenest on sports, and account for 42 per cent of the nine million sporting holidays taken by Europeans abroad. At 14 per cent the Dutch rank second. In other European markets sporting holidays make up only six per cent or less.

Among sporting holidaymakers the most popular destination is Austria, which among Europeans attracts 24 per cent of the market, followed by Italy and Germany, which each account for 11 per cent. During the last five years Germans also preferred Austria for testing their sporting limits. At 42 per cent Austria ranks ahead of Italy (18 per cent) and Switzerland (14 per cent).

The most popular activities among European sporting holidaymakers are hiking (38 per cent) and cycling tours (23 per cent). They are followed in third by motor sports (car, motorcycle and motorboat racing) at 14 per cent. At ten per cent golf ranks fourth in the sporting popularity stakes. Among German sporting holidaymakers hiking (34 per cent) and cycling (25 per cent) are the leaders among the top ten most popular sporting activities. Nine per cent of German sporting holidaymakers prefer golf.

Dr. Martin Buck, director of the Competence Center Travel and Logistics at Messe Berlin: ”Sporting holidays are a niche segment with a serious potential for tourism in the future. A growing awareness of one’s body and mind means that people are increasingly keen to improve their health when on vacation.“

What is striking is that sporting holidaymakers belong to the wealthier parts of society and as such are a much targeted segment of the market. European sporting holidaymakers average 43 years of age, and most of them live in households without children. More men than women are attracted to sports when they are on holiday. At 45 years of age, German sporting holidaymakers may be a little older than the European average, but in all other respects they are no different than other European citizens.

I have just returned from a brief trip to France visiting two leading spas and a privately owned chateau, as part of a fact finding trip for my client: The Healthy Holiday Company.  My first visit was to Chateau Dumas (pictured), about 45 minutes north of Toulouse.  Located on top of a hill with panoramic 360 degree views of rolling countryside and medieval towns and villages in the distance, I will be recommending that this comfortable, elegant Chateau be added to the company’s portfolio of properties for 2012 as a destination yoga venue.  The beautiful, oak beamed yoga studio is light and airy and just a short stroll across the Chateau’s formal gardens from the main building. There are currently 12 bedrooms, ranging from large suites to smaller studio rooms, and – by next Spring – 3 or 4 new bedrooms will be added in the delightful gate house.

The 18th century Chateau was purchased by an English couple six years ago and been lovingly restored and updated. The bedrooms all now have sleek, contemporary bath or shower rooms, and the feel of the place is like that of a large privately owned country house. Which, effectively, is what it is.

We look forward to formally introducing this terrific new addition to our detination yoga portfolio in a few weeks time, once all the paperwork etc. has been completed.

I also visited two exceptional spas.  The first, Les Sources de Caudalie, is located in the heart of the Bordeaux wine region on the Chateau Smith Haut Lafitte estate.  The spa is only 11 years old but has been so painstakingly built using reclaimed materials that it feels as it has been there for centuries.  The accommodation is super luxurious – there are 40 bedrooms, of which half are suites, and all have wonderful views of the surrounding countryside.  The spa (with 22 treatment rooms and an indoor pool) uses bespoke Caudalie treatments and creams which use as their base ingredient the skin of the pips of the grapes, and is the world’s first vinotherapie spa.  The ethos of the property is luxury pampering and pleasure.  So, more for relaxation and indulgence rather than slimming or detoxing.

I also visited Les Pres d’Eugenie which is about 150kms south of Bordeaux near Pau.  This is a long established Relais & Chateaux hotel with 80 bedrooms, a 3 star Michelin restaurant, a traditional spa and a medical spa, set in 25 acres of well maintained gardens.  Apart from the benefit of exceptional spa treatments, based around both relaxation and slimming, the 3 star restaurant is the magic ingredient as the chefs create outstanding gourmet meals with very few calories.  It’s called cuisine minceur and each day’s meals come to about 1,100 calories, including breakfast.  And a glass of wine!

The reason for visiting the spas is that The Healthy Holiday Company is about to launch a new bespoke healthy holiday service that will include a selection of the world’s top spas.  Now there will be two in France in the collection!

Some interesting observations from World Travel Monitor, commissioned by ITB Berlin, and all good news for my specialist travel client: The Healthy Holiday Company.  It’s luxury health, fitness and detox brand – in:spa retreats – is the most directly relevant to World Travel Monitor‘s research.

German citizens are becoming more and more aware of the importance of staying healthy and energetic. Increasingly, they are taking health vacations to reduce everyday stress or to stay fit for their jobs. Over the past five years holidays at wellness and spa resorts have risen by 30 per cent.

Germans are especially interested in health vacations: at 3.3 million vacations, equivalent to 4. 6 per cent of all trips abroad, Germans are more interested in foreign health and medical tourism than their European neighbours. Currently, health and medical travel accounts for a total of 9.4 million trips or 2.4 per cent of all European travel abroad. Across Europe, over the past five years health vacations have increased by 38 per cent. Medical tourism has also risen by 24 per cent.

Martin Buck, the director of the Competence Centre Travel and Logistics at Messe Berlin: “Everywhere in Europe health vacations, which help to prevent society-related illnesses, are becoming more and more popular. This is a big opportunity for organizers, hotels and destinations to expand and improve their services.“

Germans and Russians are much keener to take health vacations than their European neighbours. Whereas the German market for health vacations abroad is approximately six times the size of Russia’s, with German citizens medical tourism accounts for only 22 per cent more. The French market is the third largest for foreign health trips, while Holland’s is the third largest for medical tourism abroad.

Among German citizens the most popular foreign destination for health trips is Spain, followed by Italy and Austria. The countries most visited for medical reasons are Poland, the Czech Republic and Hungary. In Europe as a whole, the most popular countries for health trips are Spain, Italy and Austria, while Hungary, Germany and the Czech Republic are the leading destinations for medical tourism.

Women prefer cure leave to wellness vacations
According to the World Travel Monitor’s survey, socio-demographics also play a part. At an average age of 48, Europeans taking health vacations are younger than people travelling for medical reasons, who are 53. German travellers in both categories are older than the European average. People taking health vacations are 52 and those travelling for medical reasons are 61. Women prefer to travel for medical reasons rather than take health vacations. However they outnumber their male counterparts in both categories.

Massages less popular with Germans
Europeans say that when taking health vacations they prefer relaxing (50 per cent), followed by walking / hiking and swimming (43 per cent each). Among Germans, the most popular activities are walking / hiking (48 per cent), relaxing (47 per cent), followed by swimming (44 per cent). Germans are slightly keener on wellness programmes (30 per cent) than their European neighbours (26 per cent). By contrast, massages are less popular with Germans (15 per cent) than with Europeans as a whole (26 per cent).

Russia and China: a small, but growing share of the market
At growth rates of slightly under 100 per cent and 100 per cent plus respectively, at 0.4 million and 0.3 million trips each in 2010, at three per cent each of the holiday market in all categories, Russia and China are developing into attractive markets for health vacations, particularly for their neighbouring countries.

2007 was the last great year for almost all tour operators, including my client The Healthy Holiday Company.  2008 was pretty good, but only to the extent that the advance bookings made in the go go days of 2007 were still being redeemed.  Then everything came crashing down along with Lehman Brothers and the world plunged into a banking crisis and almost all consumers suddenly stopped spending.  So, 2008 and 2009 were dire, and there was a little bit of an up-tick in 2010.  Indeed, The Healthy Holiday Company returned to profitability.  But what’s happening in 2011?  Sales to end June 2011 were the same as the whole of 2010.  The obvious question is: why?  Apart from the simple point that we believe we have a selection of great holiday packages at attractive prices, we think there are six significant reasons…

First:  the strategic decision we took in 2008 to invest in launching two new niche consumer brands (fitscape – for exceptional fitness holidays at around £1,500 per person per week; and destination yoga for superior yoga holidays at approx. £900 per person per week) to complement the long standing (since 2003)  in:spa retreats brand (specializing in luxury health, fitness and detox retreats at around £2,500 per person per week).  Each brand targets a different market at a different price point, giving The Healthy Holiday Company a broader market reach and allowing our existing customers to trade up or down within our price points / holiday offerings to suit their requirements.

Second:  it takes time for new brands to become sufficiently exposed in the market as regards the all important ‘word of mouth’ introductions.  It’s now 2 years.  Alongside this, and equally importantly, it takes about the same length of time (unless you have very deep pockets) for Search Engine Optimisation on Google to really start delivering results for a company’s key words and phrases.  For example, destination yoga now appears on page 1 of Google for searches for ‘yoga holidays’ and ‘fitness holidays’ searches now return fitscape on page 1 of Google.

Third:  customer loyalty.  Approximately 33% of sales are to guests who have been on one or more of our holidays / holiday brands in the past.  This is true for each of the last 5 years.  So for every three new guests we attract in any given year, we can be sure that at least one will book another holiday with us again in the same or the following year.

Fourth:  almost all of our customers are in the higher socio-economic categories.  Whilst they, like everyone else, got thoroughly spooked in the early to mid part of the banking crisis / recession, they didn’t lose their (mostly private sector) jobs and actually found their costs of living (such as mortgage rates) decreasing or staying flat.  So, by 2011, with as much money or more as they had before, our customers are bored of not having a good time and not taking as much holiday as they would like, and with increasing confidence that the economy is moving in the right direction (or, at least, is in better shape than it has been in recent years) – are now choosing to spend their money on looking after themselves on a healthy holiday in the sunshine.  This brings us nicely to the fifth point…

Fifth: health and holidays go very well together, particularly amongst the more affluent 35 year old and upwards age groups.

Sixth:  the holiday companies that appear to be doing best are the specialist niche operators.  And The Healthy Holiday Company is certainly one of those!

After writing my blog on 9 July (please see below) about Fitness First’s plans for a new budget gym brand called Klick Fitness, I thought I would investigate further why Fitness First decided to go it alone with a new brand rather than hiving off the 10 gyms it had earmarked for overhaul to Fitspace or another of the budget gym operators, who typically charge between £12 and £19 per month for membership.  Remember: 5 years ago Fitness First handed over 5 poorly performing facilities to Fitspace in return for a 30% stake in Fitspace.

Earlier this week, I visited the Fitspace facilities off  Holloway Road in north London and their club in Mitcham, Surrey.  If they are similar to the other Fitspace clubs, then I would suggest that the end is nigh for Fitspace or they are going to have to invest substantial sums in overhauling and upgrading their facilities in order to be able to compete with all the new – and far superior – budget gyms that are springing up everywhere.  Fitspace clubs are rather dank and smelly, rather dark and drab, and with grubby changing and shower facilities.  Yet, unless you sign up to an 18 month contract (at £12 per month), the subscriptions are £19 per month.  Compared to The Gym Group clubs, who charge very similar prices, and I would score (on a scale of 1 to 10)  between 6 and 8, Fitspace would score around 3.  Hardly a good score in an increasingly competitive market!

So, my bet is that Fitness First have decided that Fitspace don’t have the capital or, perhaps, the inclination to invest in upgrading their clubs to match the competition.  And, rather than assist in funding Fitspace via their 30% equity, Fitness First have decided to go it alone and invest, as they say, around £700,000 per club to convert 10 of their existing Fitness First clubs to the new Klick Fitness format.  It will be interesting to visit some Klick Fitness clubs in the near future to see how they score on my 1 to 10 scale, and to see whether they are a competitive match for the likes of The Gym Group or even Pure Gyms (who I would score at around 5 out of 10, i.e. mid way between The Gym Group and Fitspace).

The bottom line is that Fitness First have elected to go it alone and enter the budget gym market with Klick.  They will have had access to all the details of Fitspace’s financial and operational performance, and (understandably) think they can do a better job.  As my visit to Fitspace’s premises in north London and Mitcham was deeply underwhelming, I would say that Fitness First have made the right decision and I would think that this leaves Fitspace in some difficulty.  If not now, probably soon.  Unless they invest significantly in up-grading their current gyms.

Fitness First is about to enter the low-cost gym market for the second time.  First time round was 5 years ago when it sold a small number of clubs to Fitspace – the first low cost gym group – and took a 30% stake in the company.  Presumably that shareholding has allowed them to keep close tabs on Fitspace’s performance and now, instead of off loading a few more badly performing Fitness First clubs to Fitspace again, it has decided to enter the budget market itself.  This would clearly suggest that Fitness First likes what it has seen at Fitspace and has decided it can do it better.

Colin Waggett, Fitness First’s CEO commented in The Times on 2 July:  “Our business is performing very satisfactorily in London, in particular, but it’s more challenging elsewhere.  This is really a bit of R & D addressing that.”  The plan is to close 10 Fitness First clubs, mostly located in the North and Midlands, spend approximately £700,000 refitting each facility and then rebranding them as Klick Fitness.  Founder members would pay just £9.99 per month; about a third of what their existing members are paying.  This subscription is expected to rise to around £15 per month after the launch of each new Klick club.

As part of this new low cost formula, the number of FTEs (full time equivalent staff) will be reduced from about 15 per club to just four.   All this, of course, is part of the company’s programme of beefing up its UK business prior to floatation, forecast for later this year and probably to happen in Singapore (to reflect the global revenue shift from west to east).  The group now has 435 clubs around the world and intends to focus on faster growing markets such as Asia and Europe’s larger cities.

It’s interesting to note that several low cost chains have risen in the wake of Fitspace’s original concept, under such names as the Gym Group, Fitness4Less, Pure and (earlier this year) Kiss Gyms and, most recently with Sir Stelios’s easyGym in Slough which opened a couple of weeks ago.  This brings the total to around 50 low cost clubs.  I expect many more in the coming months!

The travel industry is making use of social media but it’s still doubtful about return on investment, TravelMole’s Travel Industry Question Time session heard in London on 5 July 2011

With limited budgets, lack of clarity on strategy and a fear of negative responses, only sections of the industry have grasped the nettle when it comes to engaging with consumers, delegates heard, and even then they may not be using social media as effectively as they could be.

With a panel of experts comprising search agency Hit Riddle’s Matt Barker, review site Qype’s Sarah Drinkwater, advertising agency Conrad’s Nick Henley and social media agency Yomego’s Richard Rust, the debate on how best to use the likes of TripAdvisor, Twitter and Facebook saw many at the session admit they were still perplexed on how to measure whether it was working in terms of bookings.

But Drinkwater was adamant everyone in the industry needed to get onboard. She said: “For me, it’s not a matter of whether you want to engage, it’s about having to. Businesses are nervous about it but more and more they are realising that it’s the best way forward to reach new consumers and solidify what the brand is.”

Henley added: “The problem with social media is that you put the money in and you have to work out where the value comes back. But people can’t always measure that.”  Hit Riddle’s Matt Barker disagreed with Drinkwater, however.  He said: “There is a myth that you have to do social media.  It is not necessary for everyone’s online marketing strategy. I think there is just too much hype about social media.  I ran a marketing team for a travel agency and I know that the traffic you generate from a Facebook campaign will not give you quality leads as much as more traditional stuff like organic search or pay per click.”  He said leads from travel discussion forums were much stronger than those from general social networking sites. “People using Facebook are not necessarily on the purchasing cycle,” he explained.

Yomego’s Richard Rust believes that it’s crucial to enter the social media world simply because it is an extension of people’s every day lives. He explained:  “It’s intrinsic to how people purchase things and that’s why Premier Inn incorporated TripAdvisor views onto its site.  Enhancing your reputation is very valuable – it’s just about measuring its value.”

But all agreed that if companies are to engage in social media, then it has to be done properly and consistently.
Said Drinkwater: “There are dangers in not using it wisely. You must have something to talk about, useful content and a particular campaign in mind.”  Henley said one of the best aspects about social media was that it made companies raise their game.  He explained:  “You can’t go out there and start talking about your company unless it’s good.  Social media makes you sort your house out.”

It was also unanimously agreed that companies should take a cross-departmental approach to social media.  Said Henley:  “15 years ago, when we talked to companies about the internet, the web was dealt with by a single department. Now it impacts every department. It should be the same approach for social media. Everyone should be involved in reacting to customer feedback.”

A 2008 analysis by UNWTO from 71,981,000 departures reveal that Spain is still our top destination (with a total of 21.8%) of Brits visiting during the year, but here’s the breakdown for all regions:

In recent times you may have seen a new logo / click option appearing on certain websites – see picture to the left.  Google +1 (pronounced Google plus one) was launched in March 2011 and is a brand new addition to the all conquering Google search engine. In essence, +1 is Google’s way of making search results a little more personal and is very similar to Facebook’s ‘like’ button or Twitter’s ‘tweet’ button – but with a new twist. It appears on Google search results and can influence rankings and therefore should most definitely be part of everyone’s Search Engine Optimisation programme.

So how does Google +1 actually work?

Just think of +1′s as votes. Whenever someone +1′s a website, it counts as a sort of recommendation and shows up next to the page in Google’s search results.  Google created +1 in order to try to give its users a better experience. At the end of the day, Google wants to provide quality and relevant content for their users and +1 is Google’s first major step in making their search engine a more “fair”, friendly and social place.

This is how Google describes how they see +1 working from a ‘potential’ cutomer’s perspective:

Google +1 is being incorporated into Google’s algorithm, therefore influencing websites rankings all over the web. How much +1 will account for a website’s rankings remains to be seen and it’s perfectly possible that it will not catch widely enough to have a major impact. However, it’s definitely a good idea to install the +1 button on your website.

At 06.30 this morning, Sir Stelios Haji-Ioannou opened his first easyGym in Slough with a joininhg fee of £25 and a monthly subscription (but no long term contract) of £15.99.  The next, in Wood Green (north London) is scheduled to open in mid-July and is currently offering a pre-opening sign-up deal of no joining fee and monthly subscriptions of £13.99.  As you might expect, the interior is bright orange and grey, and pretty basic – but it does have a comprehensive selection of cardio and strength equipment, plus changing facilities, lockers and showers.

The only surprising aspect to this is that easyGym is by no means the first to enter the market, with Pure already well established (and gradually working its way south from Scotland) and fitspace and Kiss also starting to make in-roads into the low cost / high spec fitness market.  All the traditional operators must be quaking in their gym shoes as the market for £40 to £70 fitness club membership comes under serious competitive attack from these new low cost operators.

Paul Lorimer-Wing, joint chief executive of easyGym, said:  ‘We’re ripping up the rule-book in the fitness sector by ensuring members pay for the stuff they use, not the stuff they never use.’

EasyGym hopes to roll out further clubs this year, building up to 10 across the UK from 2012.

Sir Stelios, the founder of easyJet, joined forces last year with private equity-backed Fore Fitness, which has arranged a brand licensing to use the ‘easy’ name for the business.