“It’s tough to pull off disruptive innovation within an established company”
29 August 2018 · 11 min read
A leading figure in the fast-evolving French travel scene over the last decade, Marco Vasco moved the needle by “bridging the gap between two worlds”: the efficacy of e-commerce and the authentic personal touch that was formerly the preserve of high-street agencies. We caught up with their founder and CEO, Geoffroy de Becdelièvre, and their CFO and COO, Alexandre Vercoutre, to discuss the company’s journey and look ahead to the future.
About Marco Vasco: Founded in 2007 as Planetveo and subsequently renamed after the explorers Marco Polo and Vasco da Gama, Marco Vasco specialises in providing off-the-beaten-track, bespoke travel solutions, particularly for medium- and long-haul holidays. The company employs over 250 people, including more than 150 travel consultants, and has created dream trips for more than 100,000 satisfied customers and has an annual turnover exceeding €75 million, all stemming from organic online growth.
About Geoffroy de Becdelièvre and Alexandre Vercoutre: Marco Vasco’s founder and Chief Executive, Geoffroy de Becdelièvre is a born globetrotter who swam across the Ganges in Varanasi at the age of 18, climbed Ecuador’s 5,000-metre Tungurahua volcano in flip-flops the following year and spent several years living in China. He holds a DESCF degree in accounting and finance and worked at KPMG and the Canal + Group before turning his hand to entrepreneurship. He is also an active start-up investor.
Another avid travel enthusiast, Alexandre Vercoutre also started his career at KPMG, fresh from graduating from ESSEC Business School. Following stints as an Analyst at the investment bank Crédit Agricole CIB and a Valuation Manager at the financial advisory firm Duff & Phelps, he worked in varied positions at Louis Dreyfus Commodities, a major merchant and processor of agricultural and other goods. He joined Marco Vasco as Chief Financial Officer in 2015 and added the Chief Operating Officer role to his job description in 2016.
To begin with, tell us a little bit about yourself. What inspired you to go into the travel industry and how did you wind up founding Marco Vasco?
Geoffroy: We were inspired by the state of affairs back in 2008 when, although there were players capable of offering rudimentary travel services on the Internet – with Booking.com being a prime example –, whenever the arrangements got a bit more complicated, you still had to traipse to the local high-street travel agency. This prompted us to ask ourselves whether we couldn’t instead simply open a ‘virtual agency’ – our site – that would guarantee customers the same service quality they were used to while sparing them the journey to bricks-and-mortar stores.
This was highly innovative at the time because we were the first to do it. It used to be considered that e-commerce was only good for selling standardised items and that made-to-measure products could only be provided offline. We set out to bridge the gap between those two worlds.
Geoffroy, an article published in Forbes last year dubbed you “the entrepreneur who celebrates failure”. What’s the story behind that and what’s your rationale for prizing something that many consider a weakness?
Geoffroy: I’m a firm believer that to innovate, you’ve got to take risks and initiative, which by definition means failing along the way. If you don’t fail, it means you’re not trying anything new. We started cultivating this ethos a fair few years back. Every year, we’d hold a sort of ‘funeral’ for each of our new projects that had come to nothing, in which we’d have invested tens or hundreds of thousands of euros. At a normal funeral, you come to terms with a person’s death by speaking about the life of the departed; likewise, we sought to understand what had gone wrong by talking about the life of the project and the reasons why it had ultimately failed. We even gave out a trophy, the Failure Prize, to the project lead. The buy-in from the staff was pretty good. I particularly remember one member of staff, who was absolutely brimming with pride at scooping the prize because it showed that she was more enterprising and took more initiative than the rest.
Out of all the projects you’ve rolled out, is there one that stands out above the rest in terms of driving innovation within the company?
Geoffroy: It’s funny because I was long convinced that to innovate, you’ve got to revolutionise the market and constantly come up with a new business plan. However, I eventually realised that for us, innovation is an internal process that has to run parallel to our core business and be aligned with our existing business model.
These innovations are all about helping us do what we already do, only better – such as the chatbot we’ve launched for recruitment. Another example is an initiative we put in place that became a major asset for customer acquisition and generating buzz: a contest to become our Special Envoy, an honorary travel consultant who gets to travel the planet, visit a whole host of countries and, in the process, serves up a steady supply of engaging content and pictures to please our customers.
One of our most successful innovations involved investing heavily in organic positioning on search engines (SEO) in the early years. That may sound passé these days, but in our fourth year, it accounted for 70% of our turnover of €40 million, at no additional cost. We hadn’t reinvented the wheel, but by innovating in a key area, we achieved excellence that really made the difference.
It’s tough to pull off disruptive innovation within an established company. The more a company grows, the more difficult it becomes. That’s why the major conglomerates struggle to innovate and simply grow through acquisitions.
Marco Vasco has experienced incredible organic growth; indeed, your turnover went from €1 million to €60 million in the space of just five years. What are the main pillars of your business model and how do you differentiate from your competitors?
Alexandre: The first thing that sets us apart is our attentiveness to our customers; we listen to them more than our competitors. We know this from the mystery-shopping surveys we conduct every year. First and foremost, when calling customers, we place the emphasis on really listening to them and trying to grasp what they’re looking for. How can we fulfil our mission of delivering a unique trip that fits our customers’ needs if we don’t take the time out to truly understand them?
A second strong factor is our customer-focused technology. Since the beginning, it’s been key in differentiating us and it is something we are continuously looking to improve. From 2008 to 2014, we developed around one site a month, offering a greater range of destinations for both our new and revisiting customers. Each site leveraged an algorithm that ensured that customers’ requests went straight to the right people, making us much more responsive – we still use this same system now. After receiving a request, our target is to call our customers back within 24 hours. We’ve got a whole technological system in place in the background that supports us and enables us to manage our operations effectively. We have indicators that allow us to keep track of every case on a minute-by-minute basis.
On top of that, there’s our destination expertise. That may sound run-of-the-mill because our competitors can also draw on such expertise. Our edge is that our advisors have lived and travelled in the destinations we offer and have already experienced the activities we recommend. So not only are we experts on our destinations but also of our products. We put together unique packages for each and every customer. The Dupont and Durant families may both want to discover the American West, but they won’t have the same needs. As a result, they may go to the same places, but we won’t arrange the same services for them. To summarise, our attention to detail and adaptability combined with our in-depth destination knowledge is what makes us stand out from our competitors and creates real value for our customers.
Do you view your biggest competition as coming more from the offline space, in the shape of traditional agencies like Voyageurs du Monde, or from online players? Similarly, what is Marco Vasco’s target market? What is your typical customer like?
Alexandre: I think that when Geoffroy started out in 2008, our main competitors were traditional bricks-and-mortar agencies. However, over time, the Internet has brought people closer to service producers and enabled customers to engage directly with incoming agencies. These days, our suppliers, the DMCs we work with, also compete with us in a host of destinations. Likewise, Airbnb and Google are also our competitors – we can’t delude ourselves about that – and I think we’ll face competition from service providers themselves in the future.
As for what our customers are like, we obviously know their average age and things like that, but we have a wide-ranging clientele and we seek to be by their side for their lifetime. We have young married couples who come to us for a made-to-measure honeymoon. As they grow older and have kids, our aim is to cater for their family vacations too. We also want to be there for their retirement; retired people are more active and travel much more now than 20-30 years ago, and the idea is to offer them things geared specifically towards them, with a different pace compared to what we provide for families and young couples.
What has changed since your acquisition by the Le Figaro Group in 2017? Has that paved the way for potential synergies with Les Maisons du Voyage (LMdV), another travel company acquired by the group?
Alexandre: LMdV joined the Le Figaro Group in September 2016 and we followed suit almost a year later. The first challenge was to sit down together and start mapping out the synergies that could be put in place. We’ve made pretty good headway in a bunch of key areas and, having discovered that we had a number of service providers in common, we realised that Marco Vasco could benefit from preferential conditions and rates in some cases thanks to LMdV.
By bringing us together, Figaro has established a real travel hub within the group. The conversations between us are really productive, thanks in part to the commitment shown by the people at Figaro, and another thing that’s helped is the fact that we don’t have to worry about encroaching on one another’s turf. After all, LMdV’s customer base is 50% GIT and 50% FIT and the bulk of their trade is done offline, as befitting a bricks-and-mortar agency, whereas our model is 100% FIT and online. So, we don’t tread on each other’s toes; there’s a real eagerness to join forces and ensure that 1+1 equals not 2, but 2.5 or 3.
Geoffroy, what was it like for you as Marco Vasco’s founder when the takeover went ahead? How does it feel to open up your creation to someone else?
Geoffroy: You’re giving up your baby, but I was prepared for that. I’d thought long and hard about it, I was ready and, above all, I believe it was in Marco Vasco’s best interests.
Given the evolution of our business model, our increased marketing costs and so forth, I really felt it made a huge amount of sense to link up with Le Figaro. Not only are they a like-minded partner, but they are an extremely well-known media player with strong brand awareness and a huge reach, with 30 million unique visitors per month across the group. Given this complementarity, it was really a fantastic fit for Marco Vasco.
In your opinion, what are the most relevant technological transformations taking place in the travel industry and in your segment in particular?
Geoffroy: If we’re talking about real innovations that allow you to do things much more quickly than previously thanks to data or smarter technology, there aren’t any at the moment. For example, if you want to plan an interesting trip to Vietnam, either you use someone like Marco Vasco or you’ll have to visit ten different blogs to get information and make up your mind and then, if you want to arrange everything yourself, you’ll probably find yourself booking on anywhere from seven to ten different sites. Once you add reserving transfers, cooking classes and other little things like that into the equation, although it’s feasible, it’s very laborious.
To be honest, I haven’t seen anything incredible emerge in the last ten years. On paper, Evaneos are pretty innovative, but that’s not really the case because ultimately, they’re still just another intermediary between inbound agencies and end-customers. Besides Airbnb, I can’t think of any standout innovations that have revolutionised the travel industry over the last ten years.
In a recent interview, you mentioned that internationalisation was a logical next step in Marco Vasco’s development. What’s your status on that front? What are the possible hurdles you face along the way?
Geoffroy: If I didn’t think about internationalisation, I obviously wouldn’t be an ambitious entrepreneur, but there’s the small matter of how to make it happen.
I think some tasks are easily replicable through technology. If you’re producing the Booking.com website, whether it be in Japanese, French or Russian, it’s pretty much the same story; very little will change. It’s all about room nights and hoteliers will fill in the same details regardless of who the end-customer is, and will have a single channel to update their availability, pricing and so on. It’s very simple.
When you sell bespoke trips, it’s a totally different kettle of fish. When we translated our Japan and Malaysia offerings into English, we realised that while French people like getting a call-back the following day and being asked a ton of questions to customise their trip, English people are reluctant to talk on the phone. The buying process varies hugely from one place to the next.
Moreover, things change a lot depending on how mature a market is. In France, there are some 4,000 high-street agencies and it’s an almost €10 billion market. By contrast, there are 10,000 bricks-and-mortar agencies in Italy, but the market is only worth €5 billion because digital has much less clout there – people prefer to go to agencies in person and pay in cash. So, varying maturity levels in different countries, on the one hand, and consumer habits, on the other, mean that internationalisation is far from straightforward.
We’re not a tech firm; our business model isn’t easily replicable internationally because of our human touch and, above all, the cultural aspect and local specificities are too important. It’s because we’re a bespoke provider that we create value and avoid getting dragged into the red ocean of mass production (plane tickets or hotel rooms), but the flip side is that our model doesn’t immediately lend itself to internationalisation.
Going Global is powered by Kantox, so we always ask a question about currency management, which can pose a substantial risk in the travel industry, but can also offer a major competitive edge. What is your approach to FX?
Alexandre: To put it into context, we mostly deal in medium- and long-haul trips and we operate in around ten currencies. Foreign-currency purchases account for roughly 40% of our procurement outlay, so it certainly does have a major bearing on our bottom line. We’ve made the choice to tell ourselves that we’re not traders and we don’t want to speculate. Our job is to be a travel agency, so we hedge 100% of our foreign-currency operations. Safety first!
These days, we chiefly use forward contracts. We used to go through trading rooms but in recent weeks and months, we’ve been using a platform created by our bank. With the arrival of FinTech players like yourselves, banks are being forced to evolve. The bank is always there in the background to advise us but we execute the forward contracts ourselves.
Lastly, in general (and this is a question we’re asking all of our interviewees), what do you see as the biggest challenge facing tourism and the travel industry today? And what are the major emerging trends, in your opinion?
Geoffroy: There are three main underlying trends, at least from the customer point of view. Number one is that customers increasingly want trips that are tailored to them, which is good news for us and for the made-to-measure sector of the industry.
Number two is the fact that customers are increasingly independent and unafraid to arrange trips themselves. There is a move towards disintermediation all the way across the spectrum, as in every industry. Intermediaries obviously charge fees and so, by definition, the more intermediaries you cut out, the less you spend. The snag is that there is still relatively little automation and if you want to do everything yourself, it’s very time-consuming. I think there will always be people – who fit the mould of our customers – for whom time is more valuable than money, meaning that they’d rather spend an extra €1,000 – €2,000 on a €10,000 trip and save two weeks of their time.
Last but not least, there are numerous major players who are getting into travel. Foremost among them are Google and although I’m concerned, I’m also really intrigued by what they’re doing with Google Flights and Hotel Finder, not to mention what a big play they’re making with Google Destinations. Then there’s Google Trips in Inbox, which scans your emails and bundles the information together to create an itinerary for you. These are genuine advances.
Alexandre: We haven’t yet reached the age of anticipation, if anything we’re far from it, despite information being more readily available than ever before. In my opinion, that’s the greatest challenge and not only in travel either. I think the dominant player in the future will be whoever manages to collect data on their customers left, right and centre, anticipate their needs and cater to them before they have even become apparent.