Search Take me directly to... Best of Morocco Captivating Cuba Faraway Holidays JMB Travel Peng Travel Tapestry Collection VFB Holidays The Wow House Company Fair's Fare Holiday Express itravel2000.com

About Us

• Company Overview
• Strategy & Objectives
• History & Structure
• Board of Directors
• Senior Management
• Corporate Governance
• Corporate Responsibility

© 2008 Travelzest plc

We are focusing on the two most profitable, fastest growing sectors in the travel market: online agency and specialist experience-based tour operations.

Vision

To be a highly profitable, fast-growing travel group for the modern holiday market, offering travellers the best available online travel retail experience and a range of outstanding specialised holiday experiences.

Strategy

Travelzest’s strategy has been built up from insight about customer trends, a clear understanding of how to build value in the travel market, and recognition of how to leverage the capabilities and experience of the central team. It revolves around a set of key objectives:

• Build up a broad portfolio of online agency and specialist tour operator brands, focussed on the highest growth sectors of the travel market
• Rapidly improve the operations of each acquired company to prepare it for growth
• Grow market-share and margin for each company through superior marketing and distribution
• Diversify the geographic and seasonal mix of profit streams
• Exploit the potential synergy benefits between the portfolio companies
• Maintain very low, decentralised overhead costs

Customer Trends: Travelzest is Focusing on Growth Sectors
The travel market continues to evolve and change quite significantly, creating exciting new opportunities for growth. The internet is one of the main catalysts for change, providing, at one end of the spectrum, opportunities for budget travellers to buy flights and accommodation directly from the suppliers or ‘dynamically packaged’ to suit their preferences, and, at the other end, greater opportunities for the more discerning travellers to find exactly the right travel or holiday experience to suit their preferences. Customers are already depending on the internet to research their holidays, and are also increasingly using it to book their holidays. This is a major opportunity area for Travelzest, where we have already acquired online agency businesses with potential to take an increasing share of this growth sector, both in the UK and Canada.

Customer tastes are changing

Fundamental consumer tastes are also changing, with a growing preference for diverse types of holiday experience such as cruising, activity holidays, adventure, nature and wild life tours, and escorted tours. City, beach and traditional packages will all remain important, but the higher levels of growth will be in the more differentiated holiday sectors. These specialist sectors also tend to attract less price-sensitive customers, prepared to pay a premium for a great holiday experience. Holidays like this are also less likely to be ‘unbundled’ and are harder to copy. This is the second major opportunity area for Travelzest, where we have already acquired eight specialist tour operators across a variety of experience types and geographical locations. The growth in online booking, combined with the underlying growth of the holiday type, makes the potential of these businesses very appealing.

Building Value in Travel: the Travelzest Approach
Portfolio approach increases upside and minimises downside
Travelzest is operating two business models: the agency business that relies on volume and cross-selling, and the specialist tour operator business that delivers margin. Travelzest also operates a lower-risk model than traditional tour operators, in that we have lower fixed asset commitments. We have also diversified both the source and destination markets, and have a good level of overall seasonal balance between winter and summer.

Best-practice operations deliver growth in earnings
Most of the value being created is achieved through improving operations and marketing, enabling profitable growth. For the tour operating businesses this may include changes to yield management, cost reduction, bringing more sales online, extending the product range, search engine optimisation, or invigorating marketing and PR. As an illustration, changes at Best of Morocco led to a 20% increase in sales and 53% increase in profit over 18 months, bringing the acquisition multiple of five times profit when purchased down to three within the same 18 months.

For the online agencies, we are introducing best-of-breed technology to make holiday research, dynamic packaging and booking the best available customer experience, thereby increasing conversion rates and improving customer loyalty. holiday.co.uk has undergone significant restructuring to prepare it for profitable growth, and we now expect to scale up rapidly.

Synergy
Within the group companies, there are several potential synergy benefits to exploit, including cross-selling, directing agency customers to owned holiday company stock, shared buying discounts (e.g.bonding, banking, insurance, foreign exchange, flights), and shared technology.

All acquisitions are value enhancing
Travelzest will continue to acquire online agency businesses and niche tour operators. We are constantly assessing potential targets using a very strict set of criteria. For tour operators, these include points relating to the clarity of their market proposition, online presence, and, most importantly, potential to grow. For online agencies, we are looking for great brands (itravel2000.com is one of Canada’s leading online retailers), unique attributes (holiday.co.uk, for example, is one of the top free-listed URLs in a Google search for the key word ‘holiday’), and scalability so that we could expect to double each company’s earnings in three to five years.

Central costs are kept low
Group costs are very lean, and the management team’s remuneration is heavily biased towards performance-related incentives.

All experiences are differentiated
Experience shows that an essential ingredient in making money is to have a differentiated proposition, otherwise price-based competition will reduce margin to zero. For the agency businesses, this differentiation is all about the ease of use and brand name; for the tour operators it is the experience-related expertise and service delivery on holiday.

High-calibre people
If the existing manager sees the potential for growth, is able, and is willing to buy into Travelzest, he or she will stay with the business, but otherwise a top-calibre person will be brought in as a replacement. For managing directors of travel businesses who have not had access to capital, who may be ready for retirement, or who may have been constrained in other ways – such as the availability of resources and experience or having run the business to suit a lifestyle as opposed to maximising the business, it is a very appealing model. This appeal gives a broad choice of further acquisition targets.

Capabilities and Experience of the Central Team
Chris Mottershead, Colin McKinlay and Nishma Robb have a very extensive experience base on which to draw in all aspects of this business. Core capabilities that are fundamental to Travelzest’s success include financial discipline, marketing strategy and execution, online distribution, and a track record in the UK and Canada. Their reputations and relationships across the industry are a key asset.

Priorities for 2008-2009

• Complete the implementation of best-of-breed technology in online agencies to improve conversion on the site and improve repeat visits
• Start driving the marketing of holiday.co.uk and flight.co.uk and extend itravel2000.com into other provinces of Canada
• Continue to improve operations of recently acquired companies
• Acquire further brands that fit within the strategy and selection criteria in Europe and North America

Summary

Travelzest has identified a market opportunity and business model with huge potential for growth in earnings. Our focus on differentiated experiences in growing sectors, our operating models to improve profitability and market share, and our ability to exploit synergy within the group all contribute to a very positive outlook. We have a lower risk model than traditional companies due to diversified geographical reach in sources and destinations, low levels of fixed assets, and reliance on a wealthier client base that is less price sensitive. We see additional, as yet untapped, opportunities to expand the business into other attractive sectors in the future. For 2008-2009, our priorities are clear for improving and growing the businesses we already own, extending the product range into more specialist niches like cruising, safari and escorted tours, and extending the online agency proposition into new geographies.

Email AlertSite MapDisclaimerPrivacyAccessibility