Friday, January 22, 2021

ATM Preview - I


The easy route to success
May 2006 345
Travel agents will need to turn 180 degrees to sustain their businesses, easyGroup founder Stelios Haji-Ioannou tells KIM THOMSON

So tell us about the easyHotel? What’s it going to be like, where are the people coming from, and what do you bring to market with it?
The way I have expanded the brand, I have taken the name easy from our airline business to 15 other business. Some are bigger than the others, some more successful than the others.

I am very bullish about the hotels, since it’s a very easily understood extension of what is essentially a value for money branch. As more people travel on budget airlines there will be a growing demand for budget accommodation, especially in city centres. At the moment you either have an expensive hotel room in the city or unbranded hotel in the middle of the city which is completely in consistent and you don’t know what to expect. There is a gap for urban value-for-money accommodation that we are trying to fill. We bring two things to market: the brand, obviously the website, the booking engine and the managements system and all the other things that made the airline successful, and secondly, some very innovative design in the rooms. We have taken the basic functionality of a double bed, bathroom pod with enough space to get in and out down to 7sqm, although there are some bigger rooms as well. And yes, some rooms will not have windows, we are using the whole floorplan rather than just the outer side with the windows.

So what about easyHotel in Dubai?
With a bit of luck we should have some announcements at the AHIC and ATM of our venture into Dubai.

easybus, easyCruise, easyPhone, what's the next brand extension?
At the ATM it will be the announcement of the easyHotel. I think as an entrepreneur, and as  someone who is by nature a risk taker, I have to constantly balance and make a trade off between one more company and focussing a bit more on the ones that I have started already. So, I’m up to 15 now and I promised myself not to try another front this year.

After Istanbul and Marrakech in the Middle East, what other markets is easyJet going to land in?
easyJet is restricted by the range of its aircraft in the sense that we only own aircrafts that have a range of about four-and-a-half hours. The business model is for short flights. We don’t want to go too far and Europe is really our backyard and our market. Out of London, the network is limited, but if you fly out of Berlin, Milan or Athens, the limits are different, so you may see us going deeper into the Middle East. On an Athens base, you can actually fly to Dubai. I’m not announcing a route, I am saying the range of the aircraft is capable of doing it.

As we see major full-service airlines merge, what impact will that have on the worldwide airline market?
The market is going to divide itself firmly into two separate industries:  the short-haul business and the long-haul business. The latter will continue to be served largely by the long-haul, mostly formerly state-owned, companies. A separate industry will serve the short-haul or point-to-point market and that’s more entrepreneurial and I think we will see more start-ups, as you have experienced in your region.

You've argued that low-cost airlines should fly from main cities, not airports stuck in the middle of nowhere. Why? What difference does it make?
I think I am going to qualify that statement as follows, I think every airport has a price and I think that is what we have discovered with easyJet now flying 265 routes: people are willing to pay X amount to be able to go into a big city and they are willing to pay Y (Y being usually less than X), to go into a place in the middle of nowhere. And as I started in Luton, it was not exactly a main airport, but people are willing to go out of the way a little bit to get a discount. The market will always be bigger when closer to a city. But RyanAir has demonstrated there is a market even for this middle-of-nowhere airports at a discount.

Are your hotels and airlines likely to introduce loyalty programmes? Why not?
I don’t think the hotels need to, it’s too small anyways. The airline is now beginning to get into a stage where you should seriously consider if you have enough business customers to actually warrant one. But we haven’t exactly made a decision on that as a board.

Are businesses like the easy companies killing the travel agents?
easyCruise works with the travel agents. Agents should basically understand that their role in the future would be as agent of the customer, and the consumer will actually tell them they need more help in complicated long trip or an expensive holiday or a holiday to an unfamiliar place. On a cruise, they are more likely to need assistance from a travel agent, than jumping on a flight London to Amsterdam, where they have about 55 flights a day, so you can always take the next one. The mission should be to assist consumers with complicated and expensive itineraries and vacations, companies engaged in that will happily pay a commission. We cannot treat a 29-pound flight in the same way as a 1000-pound cruise holiday. They are two different products.

Where will easyCruises go to? Stops in the ME?
I have been spending more time in Dubai and I am really impressed, I think the advantage of the climate means that you can, to start with, combine an operation and actually sell the Greek islands in the European summer, cross the canal down to Dubai for the European winter and then back. So I can see that as being a rather complementary kind of operation for a cruise ship.

You began with airlines at 28. If you weren't in the travel business, what would you be doing?
I think the question is if I didn’t have a rich father to finance the airline, I would have been an entrepreneur again. I would probably be living in Greece where I was born, not travelled a lot. And if you want to stereotype it, I would probably have a chain of kebab shops, like every good self-employed Greek.

As a traveller, what's the worst thing about travelling budget?
The main problem you get from providers of budget services and travel is that they are not branded and so you don’t get consistent service. Regardless of price point, quality is about creating and then meeting or exceeding customer expectations and brands like easy, and some others, are very good at doing that. It doesn’t matter what the price point is. People will still enjoy rooms of 7sqm because that’s what they expected, no surprises. The problem in most budget offerings is that they are completely unpredictable. Low-cost does not have to be low-quality and inconsistent.

And the best?
All of us, even the most wealthy people enjoy saving money and being smart with the way you make travel decisions, in the sense that when I fly the Atlantic and I am travelling on business, am expected to and go straight to the office, I have to admit I enjoy business class flat-beds and get some sleep. I am equally proud if I fly from New York to Miami, I am quiet proud to go JetBlue, a cheaper airline.

Advice for young, would-be entrepreneurs?
Other than get adopted by a rich father, the main thing about being an entrepreneur is being your own boss, do you really like that? If you are born to be your own boss, you will never be able to work for anyone else. Are you a risk-taker? Are you willing to accept the possibility that you may start a venture and lose money and can end up less wealthy than you were? So, if you meet these two tests then go for it. It’s very rewarding, if you get it right.




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