Cadogan Holidays undergoes management restructure

Cadogan Holidays is going through a management restructure under new managing director Stephen Rhodes after shutting its business travel division.

Rhodes took over in March from Tom Allen, who left after three years in the job and has set up consultancy Tom Allen Partnerships.

Last week Cadogan Travel, a separate division to its tour operation Cadogan Holidays, closed its business travel agency in Poole after 20 years with the loss of two staff. The company blamed poor bookings in the current recession. It had a turnover of less than £1 million a year. Cadogan Travel’s retail shop in London remains trading.

The restructure of the tour operation comes only a year after a shake-up of the senior management, product and commercial teams under Allen. During his tenure the company took legal proceedings against his predecessor Gary David. Details of the case were never made public but a substantial out of court settlement was reached in 2007.

Rhodes would not be drawn on specifics of the latest restructure, which began last week, but said some senior staff were being consulted about their roles and the current structure of the company.

He denied any redundancies were imminent, with the restructure expected to take at least four to six weeks.

“I am in the process of doing a management restructure and making certain changes to the management team. I am in consultation with a number of managers. In the current economic climate I am looking at our costs like any company,” said Rhodes.

“I have been brought in to grow the business and ensure the structure of the business is in line with the volumes Cadogan is doing.”

In the medium-term the operator, part of the family-owned Bland Group, could look at potential acquisitions as well as organic opportunities to grow the business, he added.

“If there are acquisition opportunities of small tour operators we would look at them if they are in areas we don’t currently feature. We would only do it if it makes sense and it would be businesses that are fundamentally well-run,” he said.

Rhodes said the tour operator was currently promoting itself heavily through the trade, and needed to raise its profile further. Around 80% of sales are through travel agents. “We didn’t go out to the trade with enough vigor in the past,” he admitted.

Bookings over the last six weeks are up on last year, in part as a result of high profile promotions, being more price competitive and targeted offers at specific agents as well as a trend to book later, he said.

But he admitted margins were being hit. “Where we are averaging 25% up on bookings, margins are only 14% up. We are making less profit per passenger and we are having to work hard for every booking that we get. I am sure we’re no different to anyone else on that.”

Cadogan shifted its product mix upmarket last year and now offers more five-star than four-star product. It plans to relaunch its dedicated Morocco brochure in the near future. “It’s about making the most of what we have, which I don’t think we have quite done from a product perspective, and offering more specialist hotels and tours than we currently do,” he said.

More information:

* Turkey specialists offer more tailor-made product (Travel Weekly, April 7, 2009)

* Tom Allen leaves Cadogan (Travel Weekly, February 26, 2009)


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