Mark Jones (Pictured) is the founder and CEO of OTC, one of the UK`s largest online travel supplier and retailer, owning and powering websites with over 1.6m users a month. Since the inception of OTC, Jones has presided over a company which has increased annual pro-forma sales from £10m in 1999 to over £100m in 2002. This week, Internet Travel News speaks to Mark Jones, who was recently shortlisted for the 2003 Ernst & Young Entrepreneur Of The Year Award for London.
Q. Can you tell me something of yourself and what drew you into the travel industry?
Before founding OTC, I was a chartered accountant specialising in the travel industry and the financial criteria of travel regulatory bodies, and I worked with companies such as Sunmed, Redwing and Destination USA.
Q. How many consumer brands does OTC own and how many partner sites? Who is your biggest partner?
OTC owns 15 consumer sites, including Bargainholidays.com, Onlinetravel.com, Deckchair.com, ifyouski.com, ferrybooker.com and the recently launched Youthtravel.com.
The company has formed partnerships with over 80 leading dotcom and media companies, including Virgin.net, BT Openworld, Tiscali, The Times and Telegraph.
Q. Can you discuss OTC’s business model?
There are four key elements to OTC’s business model. These include the low cost of customer acquisition, technology, our joint venture structure for business travel relationships and our overall trade strength when acting as wholesaler to other travel brands. These distinguish our business model from the high volume flight-led, brands and the consumer-led models of some of our competitors.
Q. What do you think is the key to your success?
Our business model. Our white-labelling strategy has allowed us to acquire customers at a lower cost, with less sales and marketing spend on each booking.
I also believe that due to the broad mix of our business (corporate and consumer, package holiday and independent travel), our technological achievements (dynamic packaging), and our low cost base, we can compete well in a market that operates on tight margins.
Q. Since OTC’s inception in 1998, you have made several large acquisitions over a relatively short period of time - can you elaborate on your acquisition criteria and your growth strategy?
We have followed an aggressive acquisition strategy since launch, geared primarily towards expanding our geographic and demographic customer base. Acquisitions include:
o TravelCoast - June, 1998
o Joint Venture Travel - March, 2000 - corporate specialist
o Emap Digital Travel’s brands - June, 2001
o Ifyoutravel and its brands - November, 2001
o Travelstore - June, 2002 - business travel specialist
o All-Hotels.com - November, 2002
o Deckchair.com and Leisurehunt.com - June, 2003
Q. Having committed to geographical expansion, where have you identified the possibility of growth and where do you see your revenue streams coming from?
OTC has experienced great success in the UK and Australasia, and the company is now in an ideal situation to roll out globally.
Q. Given the increasing level of competition in the marketplace, how will you maintain a leading position?
By continuing to white-label our technology more competitively than other e-travel players.
Q. What type of breaks are proving to be popular with customers - are you noticing any trends?
Build-Your-Own (BYO) breaks are now enormously popular with customers. We have witnessed a huge increase in holidaymakers building their own breaks, by bringing together flight and hotel components on our site Onlinetravel.com.
Q. Has self-packaging technology taken off as much as you thought it would?
OTC is the company that created self-packaged holidays, a development which has been heralded as the most important breakthrough in the travel industry since the launch of travel websites.
We were the first to see that a gap existed in the market for customers to build their own packages on the web, and firmly believe that opportunities still exist in the market for expanding on the overall self-packaging offering, because of the growth in consumer demand for BYO that we have witnessed.
In the face of increased competition from other entrants to the self-packaging market, including Lastminute.com and Expedia, we are committed to continuing to lead in this sector by offering consumers the greatest choice of travel and leisure functionality and by licensing BYO to other e-travel companies worldwide.
Q. What are your main aims for OTC this year?
To continue expanding geographically and demographically, to white-label our content to other travel and non-travel players across the globe, and expand our technology licensing business.
Q. What do you feel is the most important factor for the consumer when booking online?
2003 has been the year of the bargain, and this is unlikely to change. Consumers look for a fair price, as well as flexibility, in booking travel online. Websites should offer easy-to-use and quick functionality, they should also be easy to navigate and offer security when it comes to purchasing.
Q. What factors have contributed to the rise of online bookings in recent years?
- Consumer confidence when researching and booking travel on the web.
- Consumer understanding of where to look for good deals.
- The fact that we live in a society where 24/7 access to the internet means you can research and book at your own convenience.
Q. In which sector of the online market do you foresee the most dramatic growth in the near future?
The self-packaging boom looks set to continue as consumers opt for more independently organised holidays, and continue to take a greater number of short breaks - based upon the time-poor, cash-rich society we now live in, and the growing consumer confidence when it comes to researching and purchasing travel on the web.
Q. What are your predictions for the online travel marketplace?
The prodigious growth in the online travel market has seen operators, agents and direct-sell providers staking their claim for a piece of the action. The e-travel marketplace has been the star performer of 2003, and this looks set to continue. Forecasters predict the following:
- The market will be worth an estimated £12.5bn by 2006 - Jupiter MMMXI.
- Dynamic Packaging will be a market worth £1.6bn by 2005 - PhocusWright.