A veteran of the tourism industry, he had built a €20m business employing 45 staff, catering to the needs of some 55,000 visitors a year.
The problem
Traditionally, the business had been centred on coach trips to areas of cultural or historic interest. Competition from eastern European destinations was worrying, and accommodation providers were not helping, taking bookings only when it suited them and being reluctant to negotiate competitive rates well in advance.
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The need to diversify and freshen up the product by providing modern activity-based holidays was also identified.
What the experts said
The consensus was that Abbey Tours should seek better prices from accommodation suppliers. This should be achievable given the recent increase in room capacity and the sluggish performance of the market.
Tom Comerford of Bank of Ireland suggested that Abbey Tours create an internet-based direct sales operation.
Niall Feely of Eircom suggested combining holidays with hobbies and/or fitness. The wellness market offered great potential, he ventured.
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Actions taken
Abbey Tours has introduced an online booking system with links to more than 100 hotels.
The company has identified a new, later booking trend and is using electronic newsletters and e-mail alerts to mop up extra business later in the season.
Traditional marketing channels are being augmented by approaches to special-interest groups such as associations and societies, offering special-interest and activity-based holidays.
Greater focus is being devoted to the meetings, conferences and incentives market. Abbey’s conference division has doubled in value terms over the past 12 months and now accounts for 20% of overall revenue. Six major conferences are already on the books for next year.
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McColgan has had a more difficult task in convincing hotels to provide their most competitive prices upfront and reward loyalty from firms such as Abbey Tours by providing continuity of supply through the season.
“In the airline industry, people booking well in advance generally get the best prices,” he said. “In the hotel industry here, the opposite is true.”
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Conclusion
Abbey Tours is enjoying a good year with business up 12% on 2003, according to McColgan. Diversification is helping to stretch margins. External factors, however, such as the perceived high cost of discretionary purchases here and the inability of many hotel groups to provide competitive accommodation, is threatening to stunt growth.