Costly barriers to entry today mean emulating On The Beach’s success would cost multi‑millions of pounds, according to the online retailer’s founder.
Simon Cooper, chief executive of the Manchester-based OTA, said although a decade ago new entrants like On The Beach may have been seen as a “fly-by-night, new kids on the block”, perceptions had changed.
But he believes others wanting to emulate the agency’s rise to prominence over the last decade will struggle, saying there are many examples of those that have tried and failed.
“The barriers to entry are huge – way more than 10 years ago when they were almost non‑existent,” he said. “2014 is not the time to be launching an OTA.”
Cooper established On The Beach as a sideline while running ski operation On The Piste.
He initially spent money with his own credit card on Google advertising to establish the firm.
“I think that now there are regulatory requirements, and the level of investment required to build a technology platform, to build a brand and the right team of experts,” he said.
“This is not a sector you could come into and deliver anything unless you have multi-millions of pounds to get in – and spending alone is no guarantee of success.”
Cooper also believes that On The Beach has the ethos and strategy in place to stay ahead of other well-funded industry rivals on the web.
“To deliver what you have to deliver you have to be incredibly fleet of foot,” he said.
“It requires not just investment in technology but also a whole kind of one-culture approach – a collaborative infrastructure that’s only possible when you are of the size of On The Beach.
“To deliver improvements to customers something has to change on your website. We can deliver six changes a day. I would be surprised that those who have dominated the market before could deliver six changes a quarter.”
OTA says obtaining Atol was a watershed
Offering customers 100% Atol protection via a pioneering agreement with the CAA was a key moment in On The Beach’s development.
Founder Simon Cooper said at the time the firm had come “out of the hinterland” of travel by embracing the new Flight-Plus Atol designed to encompass online agencies.
The purchase of On The Beach’s first licence in July 2011 coincided with the firm’s rollout of its in-house technology platform.
It also came after a difficult period following the shock of the recession that saw XL Leisure Group collapse in 2008, prompting Cooper to claim the market was the worst in living memory.
“When we launched the new platform at the back end of 2011, consumer confidence was returning,” he said. “But people wanted reassurance on consumer protection and we had completed negotiations with the CAA. We put together a far better management structure and together this super-charged growth.”
Cooper said the recession made life tougher but added that the number of times On The Beach had had to be strategically repositioned had been the most enjoyable aspect of running it.
“Back in 2004 it was about being in the right place at the right time. There was not a carefully laid out road map.”