Activity operator Neilson Active Holidays is looking forward to life after Thomas Cook, its new executive chairman tells Juliet Dennis
Neilson’s new executive chairman Richard Bowden-Doyle doesn’t mince his words.
“Our objective is for Neilson to become THE active brand,” says Bowden-Doyle, whose track record includes managing director roles of Lastminute.com, Thomson, and Thomas Cook joint venture Accoladia.
The plan comes a year after he set out, with ex-Tui finance chief David Taylor, to buy the tour operation – and succeeded.In November last year, Thomas Cook sold Neilson to serial entrepreneur Luke Johnson’s private equity firm Risk Capital Partners for £9.15 million. Johnson, best known for expanding Pizza Express, also acquired a majority stake in Cruise.co.uk last year.
While most private equity firms saw the acquisition as too small or too risky, Risk Capital viewed the bid an opportunity, says Bowden-Doyle, provided there was “a good plan and experienced management”.
It would appear to have both.
Bowden-Doyle now hopes to unleash Neilson’s ‘true’ potential by opening it up for sale through the trade, expanding and improving its product and increasing awareness of the brand.
Already the foundations have been laid. By the end of this year Neilson will be a standalone business. Its financial and human resources systems are moving across from Cook, and it has just switched to its own reservation system.
Product
Neilson effectively operates as two businesses – activity themed beach clubs in summer and ski holidays in winter.
Its nine all-inclusive summer beach clubs – which offer everything from sailing to tennis lessons for the active family market – are seen as its “jewel in the crown”.
Not only is the summer business very profitable, it has enviable customer satisfaction ratings, according to Bowden-Doyle. Properties are on long-term leases and most staff employed by the company.
Not surprisingly, Bowden-Doyle’s answer is to create “more of the same”. Already two more beach clubs are on the cards for summer 2015, and new destinations are under consideration.
It currently operates in Greece and Turkey. Now the Ballearics, Corsica, Sardinia, Croatia, the Canaries are all possible future options.
The operator’s winter ski business is the weak link in the chain. “The ski programme is profitable but no-where near as profitable as the summer business,” says Bowden-Doyle.
The company is looking at how to differentiate itself from other traditional ski operators by instilling some of the successful elements of its beach clubs.
This means offering more exclusive accommodation to create a holiday more akin to a Neilson “beach club experience”, but in winter.
For Bowden-Doyle, it’s a no-brainer. “We are trying to increase the proportion of our winter business focused on exclusive accommodation which we can control.”
Bowden-Doyle is confident 70% of the programme will be exclusive accommodation “in the foreseeable future”. Exclusive properties will make up 25 % of the ski programme in winter 2015, up from the current 5%-10%, with two new exclusive properties already in the pipeline.
Creating a programme of similar product across summer and winter will also make marketing easier.“It will be easier to understand what the product is and who the brand is for,” he adds.
Trade
Traditionally around 75% of the operator’s summer business has been sold direct and around half its winter business, with Thomas Cook shops accounting for 60% of trade sales.
This is all set to change. The operator is in early talks with miniples and consortia.
“There are lots of businesses which have a driving desire to only sell direct. My view is you deny yourself access to a chunk of customers whose first port of call is their local travel agent,” says Bowden-Doyle.
Profit
Already Bowden-Doyle is upbeat about Neilson’s future.
“This is a business that will make £3 million to £4 million this year, which gives you money to invest in people and products,” he says.
Historically, the business has lost money, which observers have blamed on the Cook group for using the ski business as a “dumping ground” for flight capacity.
Bowden-Doyle agrees ski passenger volumes were kept “artificially large” under Cook’s ownership to keep aircraft flying during the winter, which dented profits.
But he adds: “What’s happened over the last few years is Cook reduced its fleet size and that allowed Neilson to reduce the size of its winter business and bring it into profitability.”
He adds: “We bought Neilson on the basis it was going to be profitable. It was not a business haemorrhaging money. And the evidence to date is the business will be nicely profitable this year.”