TOURISM MATTERS: Escapes’ recipe for success
SECRET ESCAPES may not be a travel company that immediately comes to mind when thinking of booking a holiday, but they have created a loyal, discerning and massive following in a relatively short time.
Founded only in 2010 by Alex Saint and Tom Valentine, who trace their careers back to Unilever, eBay and fashion brand Koodos, they were already boasting an annual turnover of over US$112 million in their third year of operation. They sell heavily discounted (up to 70 per cent) luxury hotel stays and target online subscribers via daily email newsletter. Based in Britain, Secret Escapes initially built a client base using carefully positioned TV ads, aired at what was not necessarily considered prime viewing times.
According to Saint, the most successful slot was during an afternoon showing of the ITV2 mystery series, Poirot. The rationale was that they wanted to reach consumers, when in their own words “they were at the loose end”, adding, “the level of engagement we achieved was directly related to people watching time filler TV. If you’re deeply engrossed in a football match you’re not going to have time to log on and explore holiday deals.”
Very few hotels, at any level, can boast year round occupancy of 100 per cent and from recently published accounts of one local lodging group it reached an enviable 68 per cent across five properties in their last financial year. The travel operators negotiate a heavily rack rate discount where the consumer can compare what is offered on the hotel’s own website and then independently confirm travel arrangements or book a package which includes flights.
It’s a win-win scenario for the consumer, travel entity and especially the hotel which would otherwise have unsold vacant rooms generating no revenue whatsoever. And it certainly appears to work. In an interview carried in the Daily Telegraph, Valentine stated: “We have a ruthless focus and intense selection process to ensure quality stock at market beating prices. Without this consistent delivery, it’s conceivable you could be left with a great but empty brand”. As a result, the e-commerce company claims a “95 per cent customer satisfaction rate”.
In July 2015, Secret Escapes secured an additional US$60 million in funding from existing investor Octopus Investments as well as Google Ventures to fund further expansion. According to International Business Times, the company had over 19 million members and has sold two million room nights. The founders have set its “sights on becoming a multi-billion turnover business by the end of the decade”. It is a graphic example of how the tourism industry is changing due to the creative implementation of technology, which makes it absolutely critical to our perdurable survival in this highly competitive world, that we embrace all possible avenues of latent but potential business.
Secret Escapes currently feature from time to time a handful of hotels in Barbados. However, there must be a greater scope, especially for our small boutique properties that have difficulty persuading traditional tour operators to include them in their product offerings. Again, it is down to understanding and fully embracing astute revenue management.