The operator’s new chief took over at the helm six months ago and has wasted no time formulating a five-year plan based on the ‘Four Ss’, which he believes will be the company’s pillars for growth. Lucy Huxley reports
Anyone who thought it might be hard for the new MD of Virgin Holidays to chart his own course in the wake of his high-profile predecessor, Amanda Wills, need not have worried. Mark Anderson has emerged from Wills’ shadow with a sharp focus on what he wants to achieve and a clear strategy on how to do it.
And after five years of decline in long-haul travel from the UK (albeit in which Virgin Holidays’ decline was half that of the overall market), Anderson now wants to grow the business significantly and return it to the record years of profitability. He explained the plan, known as the ‘Four Ss’, as follows:
Play to our strengths
“You can’t be good at everything; far better to focus on what you’re best at, so we’re going to be adding new product and more differentiation in Florida and the Caribbean,” said Anderson.
“We plan to create something unique with villas, where customers mix with other Virgin customers and use shared facilities. The working title is
Virgin Villages, which will open next year.”
Anderson admitted the operator’s seven brands over eight websites was confusing and said some of the brands were likely to disappear and come under the Virgin Holidays’ branding.
“It’s fair to say that not everyone understands everything that Virgin Holidays does. We are strong at cruise retail, luxury and worldwide touring, but we need to focus our marketing more to our strengths, not try and promote seven different brands.
The logical conclusion would be that we need to dial up the Virgin Holidays brand across all our products and downplay the other names.”
Realise all the synergies
“Ninety per cent of our flying is with Virgin Atlantic and it makes sense for us to grow our businesses together. We need to make sure [Virgin] Holidays customers are buying Virgin Atlantic where possible, not just because it’s part of the group but because the experience is genuinely better. But if you go on to Virgin Atlantic’s site, you’re not necessarily being offered a hotel or a car from us. That will change,” he said.
“Virgin Atlantic and ourselves also run two excellent but separate loyalty schemes which is another wasted opportunity. From 2015 points collected from both will be interchangeable.”
Anderson said there may also be opportunities in future to link to Delta’s loyalty scheme.
He added that with “limited opportunity to grow long-haul travel from the UK”, he plans to boost the company’s US domestic and inbound business Virgin Vacations from 10,000 passengers to 100,000 over the next four to five years. “There’s an opportunity for exponential profit growth with this,” said Anderson.
Do things more simply
Anderson said one of his first aims was to make Virgin Holidays “less complicated”, so bookings were more straightforward and to ensure customers weren’t paying for duplicated effort.
“It’s not about wanting to be the cheapest but we must offer the best value and that can come from looking at areas that can be automated, for example,” he said.
His senior team is now in place, except for a new customer and marketing director, due to be announced this week.
Anderson said he also plans to grow web bookings from 25% of business to 50% by emulating the likes of John Lewis and Argos, which have omni-channel strategies that don’t penalise customers for using one channel over another with discounts or booking fees.
“Our challenge is to look at how we price holidays so it’s the same whether you’re booking in a shop, through our sales centre or online.”
He stressed retail shops would be crucial as customers still want to talk to people before booking, but he revealed the proportion of Virgin’s holidays sold by third‑party agents had fallen from 50% to 10% since he joined the operator nine years ago.
Anderson also revealed Virgin Holidays is creating a web platform that is “device-agnostic”, whether that be mobile, tablet or desktop.
Invest strategically
“Everything we do gets copied,” said Anderson. “Whether it be Kuoni with retail stores or Expedia with our concierge service. So we need to keep innovating.”
He said Virgin Holidays was looking at opening v-room lounges at Heathrow and Orlando, to add to those at Gatwick and Manchester. He is also adding shops to the retail estate – Retail Lite outlets in Tesco – and opening v-room lounges as a new retail concept to the high street (page 4).