Big Interview: Western & Oriental Chairman Raj Kumar
What was your plan when you bought the business in 2011?
At that time it was made up of various businesses and I wanted to consolidate into 3 brands without losing any of the heritage and expertise. There was a lot of knowledge in the business and people who had been here for 20 plus years as well as loyal customers – it was important to keep all of that. Western & Oriental is a worldwide product specialising in honeymoons, beach and kids. It covers destinations like Thailand, Vietnam, Borneo, Mauritius and Maldives.
The company has long has a strong link with and heritage in India so I wanted to expand there.
Regent holidays, based in Bristol, deals predominantly in escorted tours and FIT trips to places like Iceland, Russia, Greenland and North Korea.
And Rainbow tours continues its focus on Africa and we are further developing the Latin America side.
Which destinations are doing well at the moment?
East Africa, places like Tanzania and Kenya are coming back while South Africa continues to be strong. In Latin America Peru, Argentina and the Galapagos are doing well for us.
I’ve been expecting growth from Brazil but prices are high probably due to the coverage its getting with both the World Cup and the Olympics headed there.
David Attenborough’s programme Africa saw a surge in enquiries from the very next day.
Where does the trade sit in your priorities?
Trade has been and remains important making up about 50% of our business. We have a loyal following and are thankful for that so will continue to support in any way we can. We have added bodies to the business including two key trade sales managers for the north and south. Nigel Ham and Paul Melon are vastly experienced and will help us create a frequent interface between us and trade partners.
We will be rolling out a trade website this summer and are gathering feedback from trade partners at the moment to help shape it.
Agents will be able to view, manage and print bookings, print quotes, manage itineraries and order brochures. They will also be able to monitor their performance against incentives, print onto their own letterheads and email quotes direct from the site.
It will also be a quick and easy way to get across special offers and product updates and will be tailored to each agent depending on what suits them.
How is business?
Despite the challenging economic climate we are showing strong growth and profitability and will continue to invest in 2013. We have increased staff in every department across the business and have had a strong recruitment drive which will remain through 2013 especially for telephone sale people.
Already this year trade and direct sales have been strong.
We are keeping our margins consistent but with any business overheads is the key and that is where we are having success by managing them well.
Prices are steady, margins could be better, but we have to accept that they will probably not improve in 2013.
In more competitive destinations, the fly and flop places like Dubai margins are always low due to high levels of competition. Tailor-made is less competitive, fewer agents do it, greater expertise is required and the margins are greater.
Are there marked differences between the direct and trade business?
Trade bookings are generally slightly behind in terms of trend. We can’t be certain why but it could be due to the type of relationship agents have with their customers who want to get together and discuss possible trips at length.
If a show like Africa comes out our phone are ringing off the hook the next morning but the agent bookings come in a few days later.
The beauty of this is that we are equipped and geared up to help them. We can tell them about offers, do posters for windows etc.
Within hours we can tell them about a spike in business so that they are ready if they experience the same thing.
Does the trade know your business well enough?
The primary reason for recruiting two experienced trade managers was to get the message out that offer holidays to a huge range of places such as Africa, North Korea, Iceland and many many more.
They will be managing existing relationships and building new ones to ensure the trade knows our product well.
I believe we will win on expertise, destination knowledge and service if agents try us out.
They will see us continue to grow this year with more sales people coming all the time and evolving programmes in destinations with new hotels and tours.
Is it easy to recruit good new sales staff?
It is difficult to recruit. There are a lot of people available but getting the right type of person is challenging. Perhaps this is because historically the industry has not been a well paid one.
But we recruited 10 in December and that was after 40 interviews which is pretty good. There are people coming back into the industry having left, some are from other companies, some from high street agencies – a mixed bag.
We will start graduate scheme from April to bring graduates into the sales side. There are already some in product and marketing most of whom have transferred into full time employment.
There is a lot of very good talent out there and salaries in other sectors have come down closer to those in travel. If you compare travel to the financial sector there was a vast gap and that has closed. It’s a good career, there are a lot of added perks and benefits. For example, in general every person in office gets a fam tri