The operator’s new managing director has been busy taking stock. Edward Robertson speaks to him about his plans
For any business, a strong sense of where you’re going is vital to ensure success.
And for Virgin Holidays managing director Mark Anderson, his position is no different.
He was promoted to the role in May this year and has since introduced four key principles that he believes have not only made the brand what it is, but will be key to the operator’s next five years: strengths, synergies, simplicity and strategic investment.
First on Anderson’s list is to play to the operator’s strengths with its key destinations comprising the US, Florida and the Caribbean.
He is keen to find out not only what is performing well but also to look at how the operator can further differentiate its product offering. And in doing so, he admitted that the Virgin Holidays portfolio may end up a little slimmer.
“We can sell luxury in a less complicated way, and a more targeted and focused way”
Anderson says: “There’s such a breadth of product with seven different brands and eight different platforms; it is just too complex and too much.
“We are in the process of working out what that [simplifying our product range] looks like, but I think the net result is we will have fewer brands.”
He says this is the thinking underpinning the new luxury programme Premium Plus, which will launch next year, and the Virgin Villas.
Anderson says: “We can sell luxury in a less complicated way, and a more targeted and focused way.”
He adds that cruise would continue to be part of the offering as he believes it is an effective example of how Virgin Holidays is able to take product already on the market and add its own twist.
Anderson says: “You can go on a cruise ship and then have a Virgin Holiday before or after it, we’re bringing something to the market that other people aren’t.”
Secondly, he is keen to cut down on costs by identifying and exploiting synergies in the Virgin Travel Group.
“It is no secret we are part of the Virgin Travel Group; almost 90% of our customers fly with Virgin Atlantic,” he adds.
“We will take these two businesses and make sure they work more closely together.”
Anderson says these closer connections could take the shape of better linking between the two sites and the product available through them. He is also considering how best the UK operator can join forces with US sister brand Virgin Vacations, which offers long-haul escorted tours into the UK and Europe to the benefit of both.
He adds that in building closer links with the US market, he would have to take into account elements that are popular across the Atlantic, such as air miles, while the fact that between 70% and 80% of all US travel sales are made via the trade means there is potential to build closer ties with US agents.
Hand in hand with exploiting synergies is a process of simplification in the business, with much of the focus targeted at the website.
“We’re selling experience. It isn’t something you can go into a shop and hold in your hands”
Anderson says the work on the websites will be first noticed by consumers around March and April next year. The final intention is to drive the operator’s online business to account for more than 50% of total sales.
Simplifying the websites will also lead to a focus on Virgin’s e-fulfillment, with Anderson keen to ensure that pricing rewards the most loyal customers.
He says: “I’m trying to get the first price to be the right price and the best price.”
Nor is Anderson’s plan fully focused on the customer. Instead this is a journey he is intent on taking his staff on, starting with an overhaul of Virgin Holidays’ headquarters in Crawley.
“The Galleria has now been largely untouched for 30 years,” he says. “In March we’re going to move out of the Galleria and are going to spend quite a lot of money on refurbishing our office completely.
“We want to create a new, highly flexible, collaborative space to echo the whole culture of Virgin Holidays and to [let us] value it even further.”
He believes that such a change will better engage head office’s 700 members of staff, who he is confident will be pleased with their new environment.
Head office and various Virgin destinations are not the only ones likely to feel the impact of Anderson’s strategic investments - he has also turned his attention on the operator’s UK retail estate.
The operator has announced it plans to open eight V Room-style shops across the country to complement the 60 Debenhams and House of Fraser concessions and 20 Retail Lite stores, operated in branches of Sainsbury’s and Tescos. A further 10 Retail Lite stores should be opened in time for January.
Anderson says the shops were originally introduced to plug the gap created when the big four halved in number, so impacting their retail networks across the country.
But as the company has become more familiar with having its own agencies, so Anderson is looking at how they can best reflect the Virgin experience.
He says: “We’re really driven by the question, ‘how do you make an intangible experience like a holiday come alive?’.
“We’re selling experience, it is not something you can go into a shop and hold in your hands. Customers like to be able to shop, they like to go and experience the product and talk face-to-face with sales staff.
“You need to make the experience come alive just as much in the dream stage as in resort.”
Anderson argues the way to do this is to ensure the shops are giving as much of an immersive experience as possible.
And he admits the success of the shops has had an unexpected impact as they drive strong sales growth in the youth market, adding: “Maybe it’s something to do with confidence, it is a lot of money to spend.”
“If you do something well and it is seen to be successful, then people will try to copy it”
Of course, this success has not gone unnoticed by rival companies, with Anderson saying: “It is inevitable that if you do something well and it is seen to be successful, then people will try to copy it.”
However, he admits he is unlikely to return the compliment, adding: “What I’ve looked at is what do our customers want, what’s happening in our industry, what are the trends, who are our future customers and how are they going to behave?
“If I’d tried to look at our competitors we wouldn’t have come up with ideas such as the Virgin Holidays’ Concierge.”
And with the amount of different projects he currently has on the go, it’s probably just as well he is keeping his eye firmly on the Virgin Holidays ball.