I just read a truly surprising piece of news over on the Travelmole website. Discount supermarket chain Aldi is planning to launch a UK travel website selling holidays. According to their spokesperson Sarah Butler:
“We have sold a
million holidays in Austria since we launched in 2003... We are not new to travel and we are
hoping to replicate the same success in the UK.”
She said the timing of the launch was perfect in the current economic climate.
“People are
looking for good deal and our motto is ‘A break you’ll remember at a
price you’ll love’. We are thriving in the credit crunch and our sales
are up 26%.”
OK. So I'd be the first to buy a cheaper can of beans or oven-ready pizza at ALDI, but a holiday? Seriously?
Maybe in Austria the company has some kind of brand presence, perhaps people associate them with no-nonsense, dependable value for money? But here in the UK I'd question why anyone would book a break with them? One of your biggest expenses of the year? Your precious time off? An untested new player that sells cheap groceries? Hmmm. Personally I don't think so.
The travel business is mega-competitive, margins at this end of the market are ultra-slim - I can't see ALDI getting the volume it needs to make this work commercially. There are plenty of sites out there offering cheap deals - particularly the price comparison sites. I fail to see how ALDI will be able to differentiate itself without spending an absolute truckload of cash.
The website - www.alditravel.co.uk - goes live on January 8th. (Even that I'd argue is too late - a lot of people will have booked their breaks in the first week of Jan.) I'll be watching with interest.
7 thoughts on “Would you buy a holiday from ALDI?”
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Lol
I came across them as I started out on my first hall patrol on Monday morning. They had a stand in the corner at the end where all the tech stands were, didn't they?
I thought at the time 'Aldi? Nah, prob just founded by somebody with the same name'... but a little while later I found their Weber Shandwick press release in the Press Area.
I don't entirely agree, Jeremy. I start from the position: 'these guys are a grown-up successful brand. It might be their first foray into travel, but you have to figure they have a rough idea what they are doing'.
A very wise travel head (I think it was Richard Carrick) once said to me "In mainland Europe travel is driven by value, but in Britain it's driven by price".
Of course, that was back then (and he was still at Airtours at the time!)......but....we ARE heading into recession....
I guess it could be that, but in the beginning only.There are so many people wanting to go on holiday but but cannot afford it or rarely.Knowing Aldi for its low prices most people will surely think that Aldi Holidays would suit their pocket.
And then they going to have these brochures in Aldi supermarkets,which means at least every second costumer will have a closer look at it.
But I am wondering how cheap would it be???Because the actual Aldi's tour operator is german "Berge & meer" and as far as I am concerned it's not that cheap at all.
Guys,
Interesting to read this conversation. A few points you may not be aware of. My compnay the On Holiday Group already deliver 4.2 million bed nights to beach hotel partners via its trade bed bank so have the buying power to dleiver highly competitive prices when combined with any low cost, charter or sheduled airline....see http://www.freshholidays.com
Aldi will get further discounts by limiting hotel partners to 1 per destination resort per star rating. This will focus volume and deliver what partner hotels need i.e full hotels.
So the only unkown is whether customers will buy? But why would they not? Aldi's audiance is female dominated, visit them weekly rather than annually and trust Aldi to deliver value? In the beach market price and brand trust are key issues...I think Aldi have both but I would so being their travel partner!!!
Steve Endacott
CEO On Holiday Group
Hi Steve
Appreciate you taking the time to provide more input. I guess we will have to wait and see! I'm not a regular Aldi shopper so for me personally I don't see much brand promise there - other than to deliver at low cost. If Brits are just into cheapest deals, then maybe it will work?
One thing that keeps me wondering is... if there's money to be made here why hasn't say Tesco had a crack at it?
One thing in Aldi's favour... if they can launch in the current economic climate and survive the first 12 months then they should be well positioned to keep going. I do think they're missing a trick launching second week of Jan though? I'd be cracking the whip at my development guys to get it done pre-Christmas...
Best wishes
Jeremy
Frank Barrett the Mail on Sunday's influential Travel Editor seems to share my opinions:
http://blogs.travelmail.co.uk/2008/11/the-cut-price-s.html
Are there any hotels from Lugano on the Aldi site?
I think we should be told.
Yeah Lugano! Take me there... (NOT) I've not had any further spam from them this weekend... but let's see what happens on Monday...