Lee Hayhurst caught up with MagicBreaks, a specialist OTA operating a ‘virtual’ model that marked 10 years in business last year, to hear about the secret to its success
The latest collaborative online business tools and reliable broadband connectivity are allowing firms to innovate with their structures to operate more effectively and efficiently.
This is seeing increased interest in firms setting themselves up as ‘virtual businesses’ with minimal central headquarters and a dispersed workforce linked by technology.
But for one successful specialist UK online travel agent the concept of operating in this way is nothing new and, it believes, is one of the secrets to its success.
MagicBreaks has been operating a virtual business model since it was first established in 2008 ahead of officially opening for business in January 2009.
It began life as World Travellers, a ski and city break specialist, but rebranded to MagicBreaks five years ago after seeing success selling trips to Disneyland Paris.
Today it employs around 60 people with homeworkers dotted around the UK and overseas managed from a small central London HQ in WeWork office space near Liverpool Street.
Now the biggest re-packager of Disneyland Paris in the UK, the firm sold 100,000 room nights to the Paris venue last year and will hit Total Transaction Value (TTV) of £75 million this year.
Tom Dunkley, founder and managing director of MagicBreaks, said operating virtually has enabled it to be flexible and nimble and focus on the quality of the customer service it provides.
And he said it has also helped the firm to evolve its model and the skills of its home-based staff as consumer demand and behaviour has changed over the last decade.
“The model has evolved from being a virtualised call centre to now one with dedicated teams to deal with the different types of enquiries we get.
“We have people looking after social media enquiries and people looking after live chat. Today we get more enquiries via live chat than we do on the phone.
“We are just starting to set up a dedicated team for dealing with removing friction from the customer journey online.
“They are not sales agents, they are there to handhold the customer through the website journey to make sure if they want at any point to engage with the team we are available.”
MagicBreaks is the largest member of the Freedom Travel Group consortium. This means the firm benefits from the services the Freedom group provides for regulatory supplier payments and other back office functions while is concentrates on selling holidays.
Dunkley said he and his two co-founders, Karl Harrison and Adam Swift, were very clear from the outset how they wanted to run the business: “We had this vision of creating a virtualised online travel agency.
“We used to refer to it as a spreadsheet business. We were aiming for a variable overheads model so as sales went up some costs followed but did not overtake sales.”
At the outset 95% of MagicBreak’s bookings came via phone calls so the firm worked with a fulfilment partner to help it to cope when demand was high.
But as the company grew it employed more of its own full-time sales agents working from home and became less reliant on its fulfilment partner.
This allowed MagicBreaks to operate 8am to 10pm, 364 days a year last year, and this year it will open on Christmas Day after taking 30 web bookings on that day last year.
Dunkley said he is also considering extending opening hours further and may return to using a third-party fulfilment partner again to help it when demand spikes.
“That does present a challenge to make sure that the quality is maintained on the service side,” he says.
“We have spent 10 years investing heavily in our brand and all the values that stands for in terms of reliability, excellent service, knowledge and availability.
“People have very high expectations. We are dealing with a premium product so we need to make sure we are fulfilling everyone’s expectations.
“We are the magic makers making dreams come true with a fabulous product. You cannot do that without a customer-centric team focussed on that.”
Dunkley said its agents, who are drawn from travel and other sectors, are attracted by MagicBreaks’ flexible working conditions which they can fit around their private lives.
And he said everyone is made to feel a part of the team through a regional management structure that sees regular interaction by phone and Skype and even home visits.
“We have all these people working from home, but in the same way as they would if they were across a desk from their colleagues,” says Dunkley.
“We have taken all the functions that would happen in a fixed office traditional business and run them virtually. There’s no cost of commuting or expensive lunches. It’s a win win.”
Unsurprisingly, MagicBreaks has embraced the cloud and today has a “varied technology stack” having gone through three technology suppliers over the last 10 years.
Initially Vertical Systems provided everything, from back- to mid- to front-office and MagicBreaks still uses Vertical’s Tarsc back-office technology.
But Dunkley said: “You can’t afford to stand still, you have to keep moving forward all the time. You must keep innovating to make sure you stay ahead of your competitors. Being virtual means we are fleet of foot, we can move nimbly and we can take opportunities.
“We have evolved our technology over the last 10 years to focus on what we’re really good at – great customer service and driving sales through various marketing opportunities
“I wouldn’t say we’re bleeding edge but we are leading edge.”
Given its dominant position in the market, MagicBreaks has to work closely with its key supplier Disney. Dunkley says it sees itself as an ambassador for the brand.
“If you want to survive you have to add value,” he says. “We add value in the way we look after customers. We feel privileged to be servicing holiday enquiries for our customers.
“Disney control the product, it’s their hotels and parks, we combine that with a fantastic transport offering, ensuring we deliver a great value package with unrivalled service.
“What we do is put together that whole experience from starting in the UK to getting there to coming back home.”
Being so reliant on a specific product has its pros and cons, says Dunkley, but he believes the MagicBreaks brand has demonstrated it can expand its reach.
Although he admits there is a danger of being distracted from its core Paris market, MagicBreaks wants to build on its specialism by offering a greater range of Disney products.
An example of this is the newly opened Les Villages Nature Paris, a Disney and Pierre & Vacances joint-venture, whichMagicBreaks has gone from a standing start to 45% of the UK market.
Another key partner, says Dunkley, is Google. “We’re involved in a whole bunch of things they’re doing.
“Some people see Google as a massive threat, we see them as being a fantastic partner, they are a great media advertising partner. It’s probably the purest model possible.
“The market sets the price you pay for the customer but to be a successful digital business you cannot just rely on that.
“You have to drive people in to the funnel through email, through digital, through traditional newspaper and radio.
“You cannot just find a place to sit in a search funnel and think you are going to have a viable digital business. You cannot just tune in and out. You have to be there all the time.
“You have to drive that business consistently, merchandise your holidays, understand what your customer expects from you and make sure you deliver it at every touch point.
“That’s probably the biggest single challenge for a business like ours; to make sure we are available consistently at every touch point, at every stage.
“That shows the importance of brand. It’s the people who do not see the value of brand who still think of Google as being like a cash machine.
“We would not be where we are today had we not worked with great people and great partners.”