Turbulence
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By Arturo Pallardó

“You can really build trust in your brand on social media if you invest time in authentic content”

Published February 8, 2018

About HolidayPirates: Present in Germany, Great Britain, France, Italy, the Netherlands, Austria, Poland, Spain, Switzerland and the USA, the multi-award-winning HolidayPirates group is one of the fastest-growing travel companies in Europe. It aims to offer travellers inspiration for their next holiday and the best travel deals, including flights, package holidays, car hire and hotels, plus rail and bus journeys. These offers are posted on the company’s websites and social media channels, as well as being publicised through in-app alerts.

About David Armstrong: David Armstrong’s career in travel spans over 20 years and both offline and online players, including stints at tour operators, a DMC, a language travel operator, and flight and rental car consolidators. He has been the CEO of HolidayPirates since July 2016, having previously served as the company’s COO.

Tell us a little bit about yourself.  What inspired you to go into the travel industry and how did you wind up as the CEO of HolidayPirates?

Like most people my age and older, I didn’t really plan to end up in travel. I studied history and politics, and I got a job working for a Greek tour operator in my mid-20s, which enabled me to follow my passion for ancient history by travelling to Greece a lot.

I’ve stayed in travel pretty much ever since, barring one exception when I ran a software company with a partner in my late 20s. For example, I built up a pan-European ferry booking platform during the first dotcom period, and I’ve also worked for traditional businesses like tour operators and two Swiss companies, one in the destination management sector, the other dealing with congress management.

Similarly, I spent nine years at the FTI Group. One of my assignments there was launching fly.de, a non-VC-backed B2C platform that sat alongside their existing flight-ticket consolidator, which I also oversaw with two other colleagues. Another was managing the language tour operator, LAL, where I built up the online business to supplement the traditional agency side.

I’ve been at HolidayPirates since November 2014. I was classically headhunted and, having managed several large companies with 800-900 employees, I initially thought it wouldn’t be a good fit for me, because it was a small company of 15-20 people back in those days. However, I was actually looking to do something totally different to going into companies and pivoting them or turning them around, which I’d been doing successfully.

I decided to take the opportunity because I thought that, at the very least, it’d be a lot of fun to work for a new, fresh brand. I also believed in the social media approach and thought it would be a very new way of acquiring traffic and building up a brand in the travel ecosystem.

Regarding that approach, could you tell us more about HolidayPirates’ business model and how you differentiate yourselves from your competitors?

On the content and product side, we do something totally different. Other online players have their verticals and products on their website and wait for people to start looking for something. They then try to capture them in that phase by paying someone else – for the most part, Google – to bring them on to their website, hoping that they then conduct a search, find something and make a purchase.

As for us, we don’t spend a single euro on Google AdWords to acquire traffic. Instead, we go and search for awesome value-for-money travel deals – often things that people aren’t looking for – and publish them on our media (our website, app, Facebook page and so on), inspiring our followers to potentially book them. That’s how we grew and continue to grow on social media, because the things we find are so exceptionally good that people naturally like and share them. As a result, the content we post is rated as highly relevant by Facebook and other platforms, providing us with great organic reach on social media.

I imagine that at the beginning, your business model had very little traction, but right now, having built up a reputation for high-quality travel offers, your social media growth is steady.

That’s right. The most important thing and what most travel companies don’t understand is that you can really build trust in your brand on social media if you invest time in authentic content and don’t just post random deals because you have them in stock and have to sell them.

The conversion rate and sustainability of our traffic just keep growing because people are in touch with our brands more or less on a daily basis, on their News Feed on Facebook or through WhatsApp messages, Facebook Messenger notes or app push notifications that they’ve signed up for.

We have to put our customers first, because if we don’t, as a social media-driven company, we will receive bad comments that will be out there in public. It’s like a self-regulating system. If we do something bad or post a deal that’s not that good, they will let us know immediately on our Facebook page or on other social media channels. This transparency helps us and our customers, making sure that we really try to do the very best for them.

Moreover, because of the trust we’ve built up, people also come to our website or open our app when they want to book their normal annual holiday, rather than only waiting for deals to spontaneously pop up. After the first experiences, they don’t even double-check our deals against other platforms, as they’re convinced it’s the best thing that they can find. They prefer coming back to us instead of just searching on Google and ending up with one of the other online travel agencies, which all have the same content.

So, your customers believe in you and buy from you even if your prices maybe aren’t the most competitive.

Well, in fact, our prices should always be the most competitive and offer the best value for money. Only very, very seldom should that not be the case. If we know that there’s something cheaper elsewhere, but that it also offers less value for money, then we’re normally transparent about that in the article, saying: ‘We found this even cheaper in x place. However, if you pay just €30 more, you’ll get much more value, but go with whatever you want.’ That more or less sums up our approach. We don’t try to sell stuff to people; it’s not a pushy sales approach.

Do you produce all your content yourselves, or do you leverage influencers and third-party content?

All of our editorial content is produced and curated in-house. Though our methods for searching for deals were entirely manual to begin with, we’ve since developed different algorithms for the various verticals. For instance, our flight algorithm scans databases, APIs and GDSs (global distribution systems) to find crazy flight deals. These are popped up to the editors for verification – nothing is automatically posted on the website or Facebook page – and if they think a deal is good, they write an article about it and push it out.

Given this human touch, how scalable is this business model?

Though the technology learns, we always want to make sure that we only push things that are really good. That’s why the humans are there, as well as to then write the article and inject their personal experience of, say, what to do and where to go once you’re in Buenos Aires or Tokyo, or their special tips as to how to get in the fast lane at the airport. These are things that only humans can supply and that make it really unique in the end. It’s not only about finding the deal and being the first to find it, but also adding the extra content alongside it.

It’s true that we only push 15-20 curated deals in each market per day, but those deals really help us to acquire traffic, build the brand and expand our reach. As I explained before, once they are attracted by the brand, people follow us and come back to book their flight, hotel or package for any destination when they are really searching for something. That’s what makes this model highly sustainable and scalable.

You mentioned technology: what do you think are the most important technological transformations taking place in the travel industry and in your segment specifically? And how is your organisation tackling them?

Although it’s not exclusive to the travel industry, the matter of increasing relevance for every user – in combination with artificial intelligence – is a hot topic. We’re developing some things in this respect right now in order to provide the most relevant, on-demand content both through push notifications and on the website.

Everyone knows how this works on Amazon, eBay and so on. It’s quite easy because everyone has a user account on these platforms, so they know their customers. It’s a bit tougher to tackle if people don’t have user accounts, but simply follow you on Facebook or have subscribed to WhatsApp alerts. So, it’s about identifying people, knowing who they are and what they’re interested in, and then making our communication more relevant, so that we send you – since you’re Barcelona-based – specifically awesome flight deals departing from there and not Cádiz, for example.

With all this talk of algorithms, AI, push communications and so on, you almost sound more like a tech firm than a travel company!

I think we’re actually a very interesting mix. On the one hand, we’re a company that is very human, with real people talking to you on social media and curating articles around awesome deals. But we also strive to make use of technology such as algorithms and AI where it makes sense for us, to assist our staff in providing the best content for our users. And, of course, we also try to structure and organise our processes within the company in the best possible way, using technology.

We also opened a tech office in Belgrade two years ago. We just can’t find enough product and IT people in Berlin, as one of the major start-up hotspots in Europe, where such figures are highly in-demand. In total, we have more than 50 people working in IT and product throughout the organisation, and that number is growing.

You’ve also entered new markets and set up subsidiaries in some countries. What are the main challenges involved from your point of view as a CEO and from an operational perspective?

We only open subsidiaries in places that we see as core or potential growth markets for our brands, such as Spain, France, the UK and the US.

We normally launch the website in these countries earlier and then open the office at a later point, after we’ve seen that our approach works there. As for challenges, in any market, after building up a big enough user base, it’s also about establishing partnerships with local suppliers to really grow the content.

Often, relevant content isn’t easily retrieved. Not everyone has APIs, so you have to go into those markets, partner up with suppliers and see how you can work with them. To do that, you need local people, a local presence, and finding the right people is a challenge in itself. They need to understand the markets, the people and the mentality; it’s not enough to only speak the language. And, ideally, you will be well-connected within the industry to easily gain access to important people and brands.

Incidentally, we read an article suggesting that you are developing IT connections with travel suppliers and are considering creating your own tour operator products. Is that true and does it mark a shift in your business model?

Yes and no. The shift that you’re referring to is that we’ve become a de facto OTA in some markets, because we have agency contracts with tour operators, for example in the DACH region. So, we act as an OTA for some of the packages on our website.

However, that aside, we ourselves have not become a tour operator yet. We are thinking along those lines perhaps mid-term, but it’s not a must. Rather, it’s related to our aspiration to have unique content and a unique product on our website. In some markets, that could require us to become a tour operator ourselves in order to provide that uniqueness. On a technical level, that would be quite an easy move – although we would still need to do some development –but the legal implications also have to be looked at.

And would it be beneficial from a business perspective, enabling you to enlarge your margins?

It could lead to higher margins, but the effort and risk are higher too. If you’re only an OTA serving as an intermediary, you don’t have payment risk and things like that on your table, whereas as a tour operator you do. So, the margins are higher in theory, but whether or not they remain higher in the bottom line depends on how the business shapes up and what customers you end up with.

However, the trigger for us isn’t so much financial, but rather whether any step we take results in a benefit for our users. That’s the only currency that will really help us to grow further. If we’re convinced that working as a tour operator in a certain market is the only way to provide really good content and products, we will do so and find the best way to minimise risk. It all starts with the question: ‘What do our users and followers get out of this? Will it provide a benefit for them?’

Lastly, in general (and this is a question we’re asking all of our interviewees), what do you see as the most significant challenge facing tourism and the travel industry today?

I won’t dwell on terrorism and political things because they will always be there to some extent and we just have to deal with them somehow. The nice thing about our industry is that people will always want to and find a way to travel, no matter what. They might change destinations, but maybe that’s an advantage of us not being a tour operator, in that we’re not bound to particular destinations.

As for other challenges, like I mentioned earlier, there’s the issue of traffic acquisition, which creates a vicious circle for most players. They see themselves caught in a Google AdWords trap: they have to pour in more and more money in order to get traffic, and if you stop putting money in, then you end up with less traffic and hence won’t grow.

The approach we’re using works for us and could actually work for any company, if they were able to change their mindset, but I appreciate that most companies will never be able to do that. It’s a DNA thing – you will never be able to change these huge OTA organisations and get them working in a different way.

On top of that, there’s the data side, the technology, which we’re investing a lot in. Without technology, you won’t be able to be relevant to your customers and being relevant has been the major challenge for many tour operators and OTAs for quite some time. Most are not relevant enough, and the gap is widening every year between the brands and organisations that manage to become more relevant and those that fail to do so.

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