Western and Oriental director of tour operations Kerry Golds talks to Edward Robertson about the company’s acquisition strategy and how it is vital to get the right agents behind your product
One of the defining features of today’s travel industry has been the amount of mergers and acquisitions over the last 18 months.
One of the companies driving this trend has been Western and Oriental, which has focused on both the luxury travel and conference markets for new acquisitions.
Now the group owns tour operators and travel agencies, director of tour operations Kerry Golds is in charge of 17 operators, many of which have been acquired since the group floated on the stock exchange in March 2006.
Not only is she responsible for overseeing the companies’ day-to-day business, but also the bedding down of any new tour operators into the group. Golds is also responsible for ensuring their performance doesn’t suffer following a change of owner.
What do you do to ensure a successful acquisition?
The secret is to try to maintain the reason you made the acquisition in the first place. You have to keep all the various parts and quirks of the business while bringing them into a large corporation. That’s one of the biggest challenges we have at Western and Oriental as we take these small niche operators and integrate them into a larger company.
Previously they’ve not had the corporate structures and part of my job is to help them in this process. The back-office support is what we integrate – we don’t integrate any of the frontline sales staff.
What advice do you give to managing directors of the acquired companies to ensure successful growth once they have become a part of Western and Oriental?
They will self-combust if they don’t learn the art of empowering the people below them. Quite often it’s small companies’ failure to do this that stifles growth. They have to put in the policies and procedures to support that growth, otherwise it won’t happen. It is a common mistake to make, as very often managing directors don’t want to let go.
What makes a company stand out when you go on the acquisition trail?
Everyone has the same kind of product these days and the price isn’t the differential for us either. The way companies differentiate now is with their marketing strategy and their customer service. You can come up with new ideas and different destinations, but you need those ideas to be marketed in a way to get the attention of the customer, particularly in the web era.
The advantage of an acquisition strategy is its fast growth. By having a buy-and-build strategy you’re not starting from scratch. The companies we buy are well established and, although they may be on the small side, it’s the specialisation and the experience we’re buying into.
How important is it for a tour operator to have strong relationships with travel agents when you consider buying it?
It depends on the company. Some of our tour operators aren’t trade-facing but, if they are, then we put a lot of emphasis on the relationship.
The trade is the best way to distribute our product. It is the quickest way we have of getting our product to the consumer, although you’ve got to get the right travel agents behind you, it has got to be the right relationship with the right agents and they’ve got to be able to understand the product we’re selling.
We work hard on our relationships with the trade, which is why we have appointed Ray Steward. His main area in the business is trade relationships and I also have a very trade-orientated background.
Have you ever acquired a direct-sell operator and changed it into trade-facing company? If so, what are the key elements you look for that convince you an operator is right for working with the trade?
There are a couple of companies we’ve tried to take a bit more to the trade. I think if a tour operator has a good product offering and there’s a gap in the market, then it’s something we consider and South American Experience is a good example of this. It has been in the business for about 20 years and so there’s a good product offering
as well as a lot of experience.
What Western and Oriental is offering is luxury tailor-made holidays and we have to offer the trade staff expertise and flexibility.
What’s the hardest part of working in the industry these days?
The speed of change going on all around us. It is not just destinations and their popularity that are changing – distribution changes, new customers, different marketing strategies for your business and the way you present your product, which are also always changing.
You have to know your industry and you can’t stand still. Twenty years ago you could carry on with your own business and making a living, now the problem is you can be successful with what you are doing traditionally, but then the next year you’re not.
You’ve also worked for Cendant, did you enjoy working for such a big name?
Cendant was very different and it was very corporate. It was a completely different concept from running an independent company as there was a lot more discipline but it was also a very good education.
However, I don’t suppose it would be my choice to work for a large corporation all the time. It comes with a lot of challenges and you learn how to look at the bigger picture and the whole strategic side of the business.
You worked for Travel 2 within a year of its launch. The company has now reinvented itself from being solely a flight consolidator to mostly a tour operator. Do you think we have seen the end of flight consolidators?
No, they are never going to completely go because there are a lot of travel agents who are piecing together dynamic packages and don’t have the airline deals they need to be able to compete.
They need to get the flights somewhere and a good consolidator fulfils that function. Everyone thought consolidators would disappear when the internet took off but they have reinvented themselves and remain a part of the trade; no part of the travel industry is going to disappear completely.
Profile
- Age: 40
- Lives: St Albans, Hertfordshire
- Status: Married with two children, aged nine and six.
Employment
- 1985: Joins Travel 2 as a sales consultant.
- 1987: Moves to Manchester to set up new Travel 2 office where she is general manager.
- 1997: Returns to London to become operations director and take up a seat on the Travel 2 board.
- 2003: Cendant acquires Travel 2. Oversees acquisition of Travel 2 into Cendant.
- January 2007: Joins Western and Oriental as director of tour operations.