On The Deck: James Cole

The recent announcement that World Travel Holdings was to embark on a multi-million pound partnership  with Hays Travel has made a few people – including us – take notice. The deal, which will involve the firm managing Hays’ cruise business makes solid financial and business sense and could potentially herald similar joint ventures for UK travel companies in the future. In essence it’s a process of using specialists within the market rather than entering from scratch – at a time when the economy is less than stable it certainly has its merits. Cruise News caught up with James Cole, co-CEO of World Travel Holdings UK to fi nd out more about the  company and to discuss the venture…company and to discuss the venture…

Could you give us a brief history of the business? 

We started Cruise118 up in 2008, selling our first cruise holiday in July of that year. It was actually just a few weeks before Lehman Brothers went bust – a fairly exciting time to be setting up a new business.

How was Cruise118 different to other companies? 

It was founded on three strategic pillars: the first being customer service. It was something which was missing in the UK at the time and not just for the cruise selling business, but in all walks of life, especially compared to the States or Far East. By providing a high level of customer service we thought we’d give ourselves a decent edge. We call our workers ‘cruise concierges’, rather than ‘agents’ or ‘consultants’ – the idea being that they take you right from your original call to when you return from your cruise – and hopefully many times over. This is then supported by exceptional technology. The second strategic pillar is niche brands. We’ve bought in companies like SixStarCruises for luxury and RiverVoyages for river, which are perhaps not properly looked after by most providers. The third strategic pillar was partnering with companies who had what we call ‘cruise lookalike’ customers i.e. their databases had the type of people who would typically take a cruise but hadn’t taken one. Our first partnership of this sort was with Travel Supermarket and now we’ve got them with the Daily Telegraph, Daily Mail and Minoan Group.

How did the relationship start with World Travel Holdings? 

We turn over around GBP40 million a year with a decent six figure profit. This was noticed by the world’s largest cruise holiday seller, World Travel Holdings. It sells one in fourteen cruise holidays sold in the world with a turnover of US$800 million. They wanted to get into the UK and have since started a relationship with us. Since then we’ve been able to bring in a number of other brands, including CheapCruises.com and cruises.com, which wouldn’t have been possible otherwise.

So from that how has the venture with Hays come about? 

We knew that we needed to expand our product portfolio and not just offer what the cruise lines were offering. We knew in 2010, and perhaps earlier, that we needed to offer our own ATOL bonded travel product and we turned to Hays Travel as our source for technology and bonding arrangements in order to package our own cruise product. That has been a fantastic arrangement. We are now working with them as part of a joint venture to exploit the opportunity that has arisen from our combined abilities, experience and customer reach. The whole idea of a partnership is for the two sides to come together and the whole to be greater than the sum of the parts. There needs to be synergy and that’s certainly the case with Hays.

Moving away from the deal, what do you think makes a successful travel agent? 

We have our three strategic pillars and other businesses have their own areas of differentiation. I’ve not once mentioned price but unfortunately some retailers do focus on that – and, from what we’ve seen in the market place over the last few years, price isn’t always the winning differentiating factor. People have to come up with things that are slightly more innovative and slightly different to what’s in the market place. As long as you have conviction and you put hard work in, with the right people and technology, then you have a good chance of success.

It’s obviously a hard time in the market right now with commission cuts and competition. What would you say is your biggest challenge in the market right now? 

It’s undoubtedly the commission cuts. The decisions made by Complete Cruise Solutions, Fred.Olsen and more recently Royal Caribbean have been well documented and the challenge is there for everyone to see. I think that 10% is probably the right figure however, others have the right intention but have gone further and chosen a figure which is potentially wrong. If we can eradicate discounting and move away from the culture of it, and everyone can net 10% plus any add-ons, then the market will be in a far better place. It could even benefit from the commission cuts. If people keep discounting and eradicating margins further then the whole industry will face further turmoil and that will put retailers under further pressure. Anyone can differentiate on price. It’s finding another difference that’s key. Unfortunately price is not necessarily conducive to retaining customers. If you can go above and beyond on service or another factor then you can look at keeping those customers and repeating the business.

What do you think the future of the business is for companies in your position? 

It’s innovation and differentiation. There is a very rosy future for those agents and cruise tour operators who look forward, as more and more people start taking to the cruise market. There are a number of new ships on order so the capacity will continue to grow. When we come out of the prolonged recession, the people who develop with the marketplace and accept the commission cuts will be the those who shine and rise to the surface.