Firm’s managing director says diversification into Europe and beyond has paid off. Juliet Dennis reports
When asked whether the Caribbean could face a similar disaster to a year ago, when Hurricanes Maria and Irma blasted their way through the region, he is largely upbeat.
Speaking as the storm from Hurricane Florence ravaged the US East Coast, he said: “Every year, people say this year will be the worst-ever for hurricanes, but until last year we had been largely untroubled by them for 10 years.
“They are part of the price we pay for the beautiful climate and destination. It’s always a concern, but something we, and the destination, are geared to handle.
“Last year was unprecedented due to the number of hurricanes and their sheer strength. It would be improbable and incredibly unlucky if we had that misfortune two years in a row.”
For Caribtours, a luxury tour operator that turns 40 next year, preparing for the annual hurricane season is business as usual.
“Hurricanes are unpredictable and we have learnt to always err on the side of caution. Last year, it [Irma] was going towards Antigua but then Barbuda was hit [instead]. It was the worst hurricane season in my experience,” he recalls.
Forty Caribtours bookings to the Caribbean were affected.
But, looking back beyond last year, Cleary says hurricanes have not been the operator’s biggest challenge. “What really gave me grey hair was the [volcanic] ash cloud in 2010. I didn’t sleep [properly] for five days; I slept on the office floor,” he says.
With flights to and from the Caribbean usually routed past Iceland, all the operator’s clients going on holiday at that time were affected. He adds: “It was Easter and we had so many people overseas. There were no planes and you felt it would never end.”
Diversification
Cleary has been at the operator for 19 years, starting as general manager in 1999 and rising to managing director and shareholder. At 30 he was the company’s youngest director, when turnover was £2 million and it employed five staff. Today the turnover is £19 million and it employs 40 people.
“When I joined, Caribtours was well loved by the trade. It had an impeccable reputation with suppliers and a loyal following of agents. It was just smaller.”
Although 80% of product sold is the Caribbean, 20% of sales are now for the Indian Ocean, Middle East, Europe and South Africa.
Product in Greece and South Africa has been expanded for next year. Cleary predicts that within five years, the operator’s sales will be evenly split between long-haul and short-haul holidays.
Expansion has resulted from agent feedback, and Cleary admits it helps to have a broader portfolio when something as devastating as Hurricane Irma comes along.
“It helps, but it’s not the driver,” he adds. “We first went into the Indian Ocean in 2007 – a few key agents said they would support us if we did. It was the same reason we went into Europe last year.”
With Turkey now back on the radar for operators, Caribtours is looking to add the destination to its programme for 2020.
New markets
Caribtours has also begun to sell out of markets other than the UK, and is now eyeing up the US.
In May this year it added an office in Ireland, and Cleary is hopeful that within 12 months Caribtours will be selling accommodation-only in the Caribbean to the US.
“We want to grow, and one of the beauties of being privately owned is we don’t have the same external pressures,” he says.
For 2019, Caribtours is targeting 15% revenue growth. “Normally we would hope to grow by 10%, but we are hoping for more with the new product,” Cleary says.
“This year we lost £1 million in sales and gained £1 million in Europe. It’s been a good year, but we feel 15% is about right.”
Europe will drive much of next year’s growth, according to Cleary, who adds: “If we get growth of 5%-7% in the Caribbean we will have done well as there are still a lot of destinations not [yet back] on sale.”
The competitiveness of the Caribbean continues to be a challenge, he says. “The Caribbean is seen by so many as an easy entry into the luxury market. Everyone is piling in and unfortunately a lot of competitors sell on price. We sell on adding value. It’s a battle we are winning.
“The big challenge is how can we stay ahead of the game by offering more. It’s easy to get a hotel contract, but it’s what you do with it.”
Cleary says he works with grandchildren of the hoteliers the company dealt with when it was set up. “We have never paid a bill late, never broken a contract, and we have got to know the reservation staff in these hotels,” he says.
Unsurprisingly, Caribbean sales are 12% up year on year and it has just enjoyed its best-ever August.
US and Brexit challenges
But sales of holidays to the US are a different story. “The US has been very slow for us. We have been selling it for a couple of years, but not gaining much traction. I think it’s the Trump effect.”
Cleary’s biggest worry is the value of sterling. Brexit has already pushed up prices for operators contracting resorts in US dollars, and Caribtours is not immune. He adds: “The Brexit uncertainty is ongoing and it’s not helpful.”
But Cleary will not let his optimism slip. “Life is not easy but you must find a way through. Our job is to make sure we are at the front of the queue.”
And next year there will be lots of celebrations with the trade, which accounts for 85% of sales, including a party and a campaign to mark its 40th anniversary.
“Some of these agents have been with us all that time and helped us grow. Some we work with are really good friends. All of our success is down to the partnerships we have with our agents and the hotels we have worked with.”
The key is very simple. “We do the right thing by agents; support them and give them great service, make them look good in front of their clients. They trust us, and that’s why they give us business.”