Jewel in the Crown managing director Platon Loizou talks to Edward Robertson about the rising price of oil, the importance of running a tight ship and the impact of tourism in Goa
When Jewel in the Crown Holidays managing director Platon Loizou arrives at Travel Weekly’s offices, it’s with a frown on his face and a head full of worry.
The day of his visit coincides with oil first touching the $135 a barrel mark, representing a huge shift in costs for the travel industry and a seismic change in thinking for its employees.There are only so many costs a tour operator can cut and so most price increases will have to be passed on to, and paid for by, the customer.
While the travel industry has faced hard times before, the record oil price, which could continue to increase, means Loizou will need to use all his experience garnered during 30 years in travel to ensure his company continues to prosper.
Just how bad do you think oil hitting $135 a barrel is for the industry?
It’s very bad, what’s going on with the oil price at the moment will put a lot of pressure on the industry and it is a concern. The large airlines are going to have to get rid of aircraft, but whether this comes about through mergers or more consolidation, I’m not sure. The challenge for them now is how to stay profitable. However, we’ve talked ourselves into this recession, six months ago everything was perfectly okay.How quickly do you think prices will go up and what effect do you think it will have on the consumer?
I don’t think we’ll see price increases this year for the current season, as most costs have been fixed. In 12 months’ time we’re going to see large increases in the price of holidays, if the oil price continues to rise it’ll make it even more challenging.
Airlines to Goa are discussing price increases of £100 for next winter and the current price is around £300 to £350. However, customers already know about this because they have to pay to fill their cars with petrol, which is going through the roof.
Everyone will be looking for the best possible value for money – that will be the issue in travel. The companies that are weak will find it very difficult.
What would be your advice to travel companies to help them weather the storm?
People need to look at their businesses and they need to understand the reality of what is happening and plan for it. Travel has always been an interesting and difficult business – you can’t afford to make a mistake and you’ve got to run a tight ship.Customers have got to receive good value for money and you have to sell much earlier than in the past as that means there is less risk.
Companies should look at every part of their operation and if something doesn’t make money, it should be dumped. Every business will go through this and some are going through it already.
Goa is one of the destinations Jewel in the Crown specialises in. Do you think it offers the experiences associated with a more traditional Indian holiday with its temples and culture?
Customers will see elephants and temples but it is different and we do highlight that in the brochure. However, the question we have to ask ourselves with many British holidaymakers is do they want to see cities such as Delhi and Calcutta, which offer the raw side of India, or do they want to go to Goa on a beach holiday and relax?
Holidaymakers to Goa are not the same kind of travellers who are attracted to India – they’re very different to travellers.
Goa is not the real India, it is a very different side of the country and it works well as a product.
Do you believe that by sending tourists to places such as Goa, you will invariably change the destinations for the worse?
We have changed Goa and there’s been a massive change for normal working people living out there. There’s one beachside family-run restaurant I know of that has a turnover of £50,000, which is a huge amount for a normal Indian family, it is just massive.
Tourism has taken a lot of wealth to India, which, from my point of view, is a good thing. It is a much easier life for people to be working in hotels than paddy fields, and it gives people the money to have more and to see a doctor when they are ill and educate their kids.
There is an argument that all-inclusive hotels are bad for the local area as they stop tourists’ money from filtering out into the community. With this in mind, does Jewel in the Crown avoid using them?
In Turkey, all-inclusives aren’t run very well in the area I operate and I stay clear of them all as a rule.
In Goa, we only have one all-inclusive because Goa is such a fantastically cheap destination that all-inclusives are a waste of time.
However, consumers and holidaymakers like all-inclusives as they like the idea of going to a destination and then not paying another penny. However, in the destinations we operate to, I steer clear of them.
On a personal basis, I don’t like them, my idea of a holiday is to go out and explore and have a meal in a different restaurant every night.
Your view on: government
The government will continue to tax the hell out of us all simply because in the UK there are 60 million people on a tiny island where the infrastructure creaks. The population is getting older and the government will use any excuse to continue to tax us.
Profile: Platon Loizou
Lives: Bishop’s Stortford, Hertfordshire
Age: 54
Status: Married to Sharon, with three sons
Employment history:
1997: Started Jewel in the Crown Holidays with partner Steve Keay
1987-1989: Sales director, Redwing Holidays 1989: Manos Holidays, MD
1976-1980: Worked for Lyons Maid ice cream and Whitbread Brewery before returning to travel trade
1974: Left school with three O-levels, and joined Thomson Holidays for two years as a reservations clerk