Interview with Chris Paulsen, Founder & Executive Chairman of House of Travel.
House of Travel is about to fire another shot in a multi-million-dollar campaign that uses a familiar face. The goal is to strengthen the place of bricks and mortar agents in an increasingly fragmented industry.
The New Zealand-owned business is the largest privately owned retail travel company in Australasia, with more than 2000 staff and turnover of more than $2 billion, and vies with listed Flight Centre to be this country's biggest chain.
It says it is enjoying a record year as the travel boom rolls on. And the company says the proliferation of online travel agents (OTAs) is helping traditional stores, as consumers bombarded with too many options return to agents.
''With the emergence of the OTAs and all the places you can buy content now, a lot of consumers now come into our stores quite confused,'' says House of Travel founder and executive chairman Chris Paulsen.
Online agents and direct sales by airlines account for as much as 50 per cent of bookings in some travel markets, but the strong growth of recent years is levelling off, he says.
The firm accepts that many of its customers will spend time online researching holidays, but hopes a $4 million marketing campaign will draw them to the consultants at its 75 stores to complete a booking.
The company has re-introduced ''Lucy'' to represent the brand, 15 years after ''Miss Lucy'' was the bright face of the then-emerging chain, founded in 1987.
Phase one of the campaign, ''dinosaurs'' launched early in February, and was aimed at breaking down the ''myth'' that travel consultants were going extinct.
"We are experiencing a major upsurge in new customers, some who have had online booking disappointments and this trend has contributed to the double-digit increase in our business this year,'' says the firm's chief executive Mark O'Donnell.
Travellers have realised that the ''myth'' of the travel consultant being more expensive is just that - not true - he says.
In spite of this, the OTAs' share of the market is growing. About 70 per cent of outbound travel from this country is trips of less than three hours, across the Tasman and around the Pacific, and are simple to book online.
But some travellers still come to agents only to book only airfares, Paulsen says.
''That's the challenge - if we do a good job with the airfare, what we need to do is get better and better at engaging with you because the next time you come back, we have a better opportunity of offering you something other than just an airfare.''
Hotels are also fighting back against OTAs. Amalgamated hotel groups are bigger and better at booking travellers direct.
Paulsen says travel agents are able to respond when there is travel disruption because of weather, other natural events or terrorism, in ways the OTAs can't.
''The moment something happens where any of our customers could potentially be impacted we go into our system and download all that information to the consultant involved and put processes in place to contact the people to make sure they're okay.''
The firm will dispatch staff to another country if the problem is serious.
Chris Paulsen, founder and executive chairman of the House of Travel Group. Photo / Peter Meecham
Bookings up on last year
Travel bookings this year are running ahead of previous years in spite of some signs of consumer weakness, says Paulsen.
'If there is a slowdown - and there is some evidence there could be to some degree over the next 12 months - the airlines will price the seats to fill them,'' he says.
A lot of airline capacity into New Zealand is fixed, except for the Chinese carriers, he says.
Paulsen started House of Travel around the time of the 1987 sharemarket collapse, and when the impact of cuts to farm subsidies was being felt most acutely.
One lesson he learned was that travel didn't stop, especially travel by farmers.
''If you've got a bit of money, you don't go and buy a new tractor, you go on holiday. Kiwis are very resilient travellers.''
And for the very rich - the top 1 per cent - travel was the last thing they stopped doing.
Stores in the chain are joint ventures - 50 per cent owned by the operator and 50 per cent by House of Travel Holdings.
The holding company is in turn 86 per cent owned by Paulsen Holdings, the company he owns with his wife Maureen.
Asked whether he had been tempted to list the company, he says: ''We've thought about it. We've never done anything serious about it. Maybe it's because we've been able to fund growth out of reinvestment and we have a very supportive shareholder who is happy to reinvest in the business.''
While rival Helloworld is on the acquisition path, Paulsen says his company isn't so interested in buying existing businesses to expand. It favours growing organically.
Ten years ago it started from scratch to build a network of consultants in Australia and that business, Travel Managers, is now 550-strong and in all states.
A screen shot from an earlier House of Travel campaign featuring 'Lucy.'
Next phase of campaign
The next stage of the firm's marketing campaign, launching this weekend, is called "Pyramids", and is based on the true story of a dream trip to Egypt for a South Island couple.
Their specific requests for the holiday are met by an agent.
The brains behind the ''Better Together'' campaign is creative director Roy Meares, who created the original House of Travel campaign in the early 2000's that introduced Miss Lucy (actress Tanya Horo). In the new campaign, she takes on the role of an agent, reflecting the true stories Meares heard while talking to staff.
Flight Centre has also launched a new campaign, highlighting the expertise of its agents in a variety of demographics and their ability to work with fellow travellers.
Paulsen says he welcomes his competitor's campaign.
''We think it's an industry job that needs to be done and if Flight Centre is going to be telling stories in this space too, that's great.''
House of Travel's customer engagement director, Celeste Ryall, says phone inquiries shot up in the week Lucy reappeared.
