Campaign Business Media Brand of the Year 2020
Travel Media Awards Trade Publication of the Year 2020 - Print & Online
New Blue Bay chief Rowland: 'We're on the acquisition trail'
Taking up the top job at a burgeoning travel business would be no mean feat at the best of times. Throw in a global pandemic and a side-role as Abta chair and you’ve got a mammoth task on your hands.
Yet OTA Blue Bay Travel’s new group chief executive Alistair Rowland seems cool, calm and collected when he joins me on Zoom from his Stoke-based offices, resolute in his aim to double the size of the business by 2023 – in terms of both turnover and HQ headcount (to 200).
Many in the industry will know Rowland for his role as chief retail officer at Midcounties Co-operative (whose travel arm comprises high street agencies, the Co-op Travel Consortium and The Personal Travel Agents at Co-operative Travel), where he had been for nine years. But his role there spanned pharmacies, funeral care and nurseries too, and Rowland was ready to “just run a travel business exceptionally well”.
Blue Bay, which trades as Caribbean Warehouse, Tropical Warehouse and Xclusivity online, is Midcounties’ largest consortium member, and Rowland remains a non-executive advisor for the co-operative. His wife, Maxine, has “happily stepped down” as managing director at Blue Bay to spend more time with family, but remains a commercial advisor, while Blue Bay’s former chief executive Stuart Wilson has taken the role of group executive director.
“At Midcounties we took a business that was about £50 million [turnover] and, when I left, it was about £650 million,” says Rowland. “I had a wide remit, but really my heart was in the travel business. So my move here is to run a travel business very well while still having a presence in Co-op.
Homing in on growth
Private equity firm LDC-backed Blue Bay, a multiple TTG award winner, serves about 15,000 passengers per year, operating “at the value end of luxury”. Known for selling Mexico and the Caribbean, the brand is growing into the Indian Ocean. It sells direct through a subscriber model and through third-party channels Travelzoo, Holiday Pirates and Secret Escapes, and also operates as a tour operator to the 400 agencies within Midcounties.
A big focus for the brand is growing its homeworking arm, which Rowland hopes will expand from 24 to 50-100 homeworkers within two years.
“We’ve got an opportunity to bring onboard selfemployed homeworkers who can sell whatever they want to their own database, but have also got access to all our enquiries for our bespoke, exclusive contracts, and that’s going to be new to the market.
“Many of those in the marketplace who might have shops but can’t afford to continue with the lease are going to probably end up in a homeworking model, and many people with their own Atols who find they can’t renew them will probably end up in a consortium model,” he explains.
“So there’s going to be a big, significant shift in the marketplace to homeworking and consortiums more generally.
“What I’m looking at here is really good agents who do the job properly, at least on a part-time basis.”
He adds: “The more product we deliver, particularly in new destinations, the more opportunity we’ve got for fulfilment. Anything we push out through a third-party channel is exclusive.
“Equally, we offer our products to the PTAs within Co-op as well, so they have access to all of our contracts.
“We’re not worried whether we’re selling all of our stuff B2B or direct to client, or whether we’re selling it within the Co-op family.”
Product growth is also an area of focus for Blue Bay, expanding its contracting team with the addition of Steve Silver and Sam Dowling as product managers.
Rowland admits it may seem an “odd” time to be taking staff on while so many other “great businesses” have made redundancies.
“In a year’s time, we don’t want Blue Bay to just be known for the Caribbean and Mexico,” he says. “We want it to be known as a luxury tour operator with exclusive deals in a much broader context.
“We’ll always invest in the development area too because much of this is around bespoke technology and what we can do with websites – the speed to market.” Blue Bay currently sells 50% online.
“So I think we’ll continue to grow in terms of resourcing generally, but we’ll be cautious,” he concludes.
And Rowland is confident there aren’t wholesale redundancies on the horizon for debt free Blue Bay. “Technically we operate as an agent and we’re still getting paid for what we sell. And right now we’re selling enough to pay the bills.”
Rowland adds Blue Bay is looking to become better known among the trade.
“Our product is exclusive in terms of use of the Atol licence, but we have Blue Bay Hotels as an Abta member in its own right, therefore we will end up with our hotel contracts available for agents using other tour operators throughout the UK.”
Open to acquisitions
And what about growth through acquisition? “Sadly, on the back of this [pandemic] it is expected that it’s going to be a narrower market,” says Rowland.
“Because it’s a well-funded and well supported business, Blue Bay’s plans are to acquire. The ambition is to double the size of this business over the next three years.
We could do that by adding in specialisms and business – perhaps cruise – or acquire significantly where we see something with value.
“And we remain open to acquisitions, but valuing a business is incredibly difficult right now.”
Rowland would not confirm whether speculation that Blue Bay had been in the running to buy Saga Group’s luxury operator Destinology before it ceased trading (via wind-down) in September was true.
“We will continue to watch that one really carefully because Destinology was a great brand,” he reveals.
Asked when Blue Bay will next be seeking investment itself, Rowland adds: “Our investors are very comfortable with the business. It is profitable and doesn’t give them a headache.”
Future talk
So what does Rowland expect for the industry? “It needs a break,” he says, adding news around a Covid vaccine and airport testing would help with confidence.
“There is a way through, for businesses to go into a semi-hibernating state for winter ready for next year.
“And then when we’re out the other side you’ll see new activity, new agents, new operators, M&A activity.
“There’s never been a time when people won’t have gone on a holiday for a period of about 18 months. So when the market can fly again, it will.”
Rowland does expect prices to rise, though, by “perhaps 15% for 2021”. And companies will be more prepared for any future pandemics “likely to happen again within our lifetimes”, he believes.
While it may be hunkering down for winter like everyone else, Blue Bay remains in marketing mode.
“This is a terrific business that just isn’t that well-known. What’s been achieved at Blue Bay in 15 years has been exceptional.
The only thing is it should be twice as big. And that’s what I intend to achieve.”
Become a TTG+ member to watch the interview in full on demand
