‘I’d be concerned if the travel industry weren’t in a period of change’
Interview with Gold Medal and Travel 2’s Managing Director, Lisa McAuley
Taking the helm of a successful operation can be a blessing or a curse. For our latest interviewee, Lisa McAuley, it has been firmly the former. During a fascinating conversation, the Managing Director of the B2B long-haul operators Gold Medal and Travel 2 lifted the lid on her first six months in the role, as well as sharing her views on some of the key changes during her many years in the industry and the challenges of currency management. She also gave us a glimpse at what lies ahead for these two big names in the UK travel industry.
About Gold Medal and Travel 2: Both subsidiaries of Stella Travel Services, which is in turn part of the Emirates Group’s dnata unit, Gold Medal and Travel 2 are two of the largest and longest-standing B2B travel companies and tour operators in the UK. They specialise in tailor-made long-haul holiday packages sold through independent travel agencies and cater for every aspect of the travel experience, from flights to accommodation, car hire, activities and excursions.
Over the course of decades in business, both brands have built up strong relationships and expertise in a range of different destinations, from the USA to Australasia, South America, Africa, the Pacific and the Far East, to name but a few. They have won multiple awards and are both members of ABTA, the industry’s association and are bonded under the CAA’s Air Travel Organisers License (ATOL) scheme.
About Lisa McAuley: Lisa is the Managing Director, B2B Tour Operations at Gold Medal and Travel 2, a role she took up after three years as the MD at Silversea Cruises. She has over 30 years of experience in the travel industry overall, having previously worked for the likes of Avis Budget Group, Shearings, Travelpack and Lunn Poly. She is a member of the Association of Women Travel Executives (AWTE) and has been named on the organisation’s Influential Women in Travel, Tourism and Hospitality list.
You recently became Managing Director at Gold Medal and Travel 2. How did you come to take up that position?
I started out in retail travel way back at the age of 18, working for Lunn Poly, which is now Tui. After that, I went on to work in tour operating and for niche operators in the skiing and touring spaces, as well as in car rental. Indeed, I spent 16 years at Avis Budget Group, from where I moved into the cruise sector to become Managing Director of Silversea.
After a few years at Silversea, last year I was approached about taking on the position of MD for Gold Medal and Travel 2. Whilst I was really happy and really enjoying my time in the cruise industry, it was just too big an opportunity for me to turn down because this is such a significant business in terms of its scale and potential.
What have your first few months been like?
I started here on 9 January, which is absolutely peak booking period in the travel industry. It was a baptism of fire, but I’m used to working in that kind of fast-paced trading environment. In fact, I view coming in then as a positive; November and December represent the lull within the travel industry, whereas by starting in January, you get to see warts and all. My first hour within the building was being shown around the office and in my second hour, I went into a trading meeting. It’s been a steep learning curve, but because I’ve spent so long working in the industry and in distribution, a lot of it made sense very quickly.
In essence, it’s really been about listening and trying to map out where I think the business should go. They’re very successful businesses, so it’s not a turnaround position; it’s really looking at where we can take the business from here. Moreover, trading has been very strong, so I haven’t been under any pressure to make any rash decisions. That’s great, because it gives you breathing time and the scope to really think strategically, as opposed to acting reactively because you’re trying to fix a short-term problem.
One of the things I’ve found is that, since I started in retail, I still do think like a travel agent. We’re a B2B supplier, so having that understanding of the audience that you’re talking to really helps. At some organisations, you can become fixated on internal priorities and so aren’t as customer-centric as what you should be, but the benefit I’ve got is that, due to my background, I’m naturally customer-centric.
As you said, Gold Medal and Travel 2 are already very strong brands and are among the UK’s largest long-haul tour operators. Could you tell us a bit more about how you’ve managed to position yourselves so well? What differentiates you from your competitors?
I think that there are a couple of things. Firstly, the breadth and depth of our product portfolio are unsurpassed. There’s nobody else like us in the marketplace. We benefit from the scale of dnata from the purchasing point of view and can tap into that buying power through two very well-loved and well-respected brands among UK travel agents.
I’m obviously biased, but I would also say that I genuinely believe that we have world-class relationships with not only our agents, but also our suppliers.
You’ve got to remember that, as an intermediary, our product is our service. We don’t own assets, so our asset is our people, who have to be delivering first-class service, and I’ve been overwhelmed with the examples of that. I’ve listened to our staff talking to agents and the relationships they have are incredible. That’s been built up over 30-odd years or so; it doesn’t happen overnight.
You touched on your solid grounding in the UK, but are there any other markets or jurisdictions that you are or want to be strong in? Or are you really focused on the UK market?
Under the ownership of Gold Medal and Travel 2, we’ve also got Pure Luxury and Simply Luxury. They are the four brands under my remit and they are UK-only where source markets are concerned.
dnata Travel is the parent company and has destination management companies (DMCs), online travel agencies (OTAs) and a retail travel network out in the UAE, as well as a presence in the corporate space.
However, my tour-operating brands are UK-centric. Is there an opportunity to take them overseas? Well, I’m not saying we wouldn’t diversify, but there is scope to keep growing them in the UK, so the priority right now is really to enhance what I’ve got in the UK.
You mentioned your many years of experience in the industry. What have been the most significant changes that you have observed?
I think that with this industry, the question is when it is not changing rather than the other way around. It’s very dynamic and I’d be more concerned if it weren’t in a period of change.
On a negative note, one environmental change has been the increase in terrorist attacks over the last ten years, which is a difficult challenge that forces everyone to adapt their business model accordingly. That said, I think it’s different for us because we’re not the asset owner.
If I think back to my time in cruises at Silversea, it coincided with when there was lots of trouble in Turkey and the Istanbul attacks, and our deployment for that particular summer was heavily weighted to the Eastern Mediterranean. We had an asset, a cruise ship, that we could move, so we then moved over into the Western Mediterranean — as did many of the other cruise lines. You can take that opportunity if you’ve got a movable asset, but if you’re a hotel in Istanbul, you have to suffer the consequences.
Technology has been another big change, with the likes of Uber and Airbnb coming into the travel space. These guys have been challenging and disrupting traditional business models; obviously, having worked at Avis, I understand the challenges that car rental companies have had when someone like Uber comes on board.
I guess the big current issue is regulatory change — things like GDPR and the new Package Travel Directive. But we constantly go through things like that: the way I see it, it’s just an evolution, not disruption, and you have to live with it.
For me, it’s about being agile and speedy to take whichever direction you need to in order to either avoid a challenge or seek an opportunity. You’ve got to be customer-centric and we’ve got a lot of data in our industry, so you should use the data to determine which direction you go in.
The word ‘disruption’ is thrown around a lot, but who are the players who are truly disrupting the industry from your perspective?
I’m in a unique position, to a certain extent. Because of the scale of the business, our relationships and the longevity of our brands, I don’t see anybody chipping away at us from a competitor point of view.
Having said that, I do see that the OTAs are presenting a challenge — and have been for some time — to traditional high-street retail travel agents and to homeworkers. So, it’s really a case of when the market we serve is disrupted, that has a knock-on effect on us.
It’s not so much that tour operating is being disrupted. It’s almost like a secondary level of disruption: if travel agents are going through anything that disrupts their environment, then we have to live with that and find a way to manoeuvre around that disruption or to help them through it.
Still, I don’t see a huge amount of disruption within tour operating as yet or foresee that changing, so long as suppliers need third parties to distribute their products and we distribute a significant volume of products while adding value. For me, we have to add value both to agents and to suppliers — that’s the challenge.
Leading on to another challenge, as you know, Going Global is powered by Kantox. As a result, we always ask a question about currency management. We see that there is an inherent risk within the travel industry: you’re sending people to lots of different destinations, different suppliers have different currencies, and there is an innate time lag between when a customer books and when you need to pay your supplier. How does this affect your business and what do you do to mitigate it?
We hedge currencies, although I don’t think we are any more exposed than anybody else. I think where the exposure comes to us as a business is consumers being aware and savvy about exchange rates and how that might impact their holiday spending in the first place.
As an example, when the dollar tanked against the pound, there was a shift away from North America. As the dollar started increasing, we knew that there would be a movement towards consumers starting to go back to the States.
Similarly, we know that when there’s negative currency impact, all-inclusives as a holiday type start to become even more attractive.
I don’t think there’s a huge amount of risk on the back end, from a supplier-payment perspective — at least no more so than anybody else. It’s more the consumer sentiment when travellers understand the impact of currency fluctuation.
What happens if a customer books and then something like Brexit happens in the middle of the booking window? There is obviously a great deal of risk for travel companies like yourselves. Is this where you have a hedging strategy in place?
In our business, we do have a broad mix of short lead-in bookings and people who will be booking now to go on that once-in-a-lifetime family holiday to Florida in 2019. However, with people like that, if you’ve booked 18 months in advance, you will have a payment plan in place anyway, one would assume, since you’re making that commitment.
Similarly, if I think back to my time in the cruise industry, I was operating within an ultra-luxury player in Silversea and people would book two or even three years in advance if they were going to Antarctica and it was going to cost £45,000.
I think it very much depends on what consumer segment you’re talking about. In the ultra-luxury segment, there is an assumption that customers are largely immune to minor currency impact. The audience that is more affected is probably the people who are deciding on whether or not they can afford to go on that holiday, which is a shorter lead-in market, and that isn’t necessarily the market that we operate in.
We’ve mentioned how well established Gold Medal and Travel 2 already are. However, as a new Managing Director, what are your ideas to further develop these brands?
There are a couple of things that I want to focus on. One is tapping into industry trends and future insights so that I can cultivate the product correctly. We need to look at evolving the product over the next three to five years and I’d like to dial up where we are in terms of the luxury sector, including cruises and experiential travel.
We introduced ocean cruising five years ago and that has seen phenomenal growth. I’ve increased river cruising this year and I also want to look at dialling up expedition cruising because, having come from the cruise industry, I know that there’s absolute growth potential in that, albeit off a smaller base.
The other thing is the evolution of the brands. We have recently undergone a brand evaluation across both Gold Medal and Travel 2, looking at the key differentiators and the points of similarity, and my aim is for us to reach a stage at which we have more key differentiators than points of similarity.
Each of our businesses and brands has a very loyal fan base: they’ve been in the market for 30–45 years and so we don’t want to push the brands to such an extent that they lose that fan base. That’s why I say that whatever we do will be an evolution, not a revolution, but there is absolutely space to move the brands into.
If it were a turnaround job, it would be easier for me, but it’s more about differentiating the brands and growing them rather than saying, ‘We need to drop that one and progress this one.’ Instead, we want to properly establish them as their own entities, with the relevant product to support them.
The benefit is that I know my audience so well, because they’re the agents I’m talking to, so I won’t do anything without making sure they’re fully on board.
Originally published at www.kantox.com on July 17, 2018.
