Fleet News

Face to face: Holiday Autos UK managing director Doug Sawers

ANYONE who has travelled on a budget airline over the past few years cannot help but have noticed the attaché case revolution among the passenger base.

There may be a lingering image of cheerful independent holiday makers on the likes of Easyjet, Buzz and Go, but on many flights – both domestically and internationally – more than half the passengers will be wearing suits and carrying laptops.

The combination of convenient airports with low cost parking, fast and customer friendly online booking and drastically reduced corporate travel budgets has seen many business travellers turn to the budget airlines as their first flight option. It's a development that has not escaped the notice of Holiday Autos, once firmly ensconced as a low-cost leisure rental broker but now eyeing the corporate market as a real opportunity for growth.

The company has already won its first major corporate account to provide rentals for Lex Vehicle Leasing clients when they travel overseas, and closer analysis of its customer base may well reveal a client profile becoming increasingly similar to that of the budget airlines.

Doug Sawers, managing director of Holiday Autos UK, is keen to emphasise that the company does not intend a head-to-head battle with the major rental companies – its principal suppliers – but he believes Holiday Autos can generate incremental business for these rental operators.

'We would never go after a business account in the UK because that would harm our suppliers, but we are now starting to look at the corporate market,' he said.

This is likely to be in two areas initially, firstly providing rental solutions for UK companies when their staff travel overseas, and secondly targeting human resource departments with the intention of offering affinity schemes for employees so they can enjoy preferential rates for leisure rentals.

Sawers insists Holiday Autos will not target mid-week replacement car business – bread and butter revenue for the major rental operators – but as businesses devolve procurement budgets to local profit and loss accounts, there is no reason to stop an executive flying with Easyjet from Luton to Liverpool hiring a car via Holiday Autos.

Circumstantial evidence certainly supports this, with Sawers confirming that: 'we are having to change our invoice processes because we never used to have to send out VAT receipts to holidaymakers, but we are now having to provide VAT receipts.'

Business travellers have few concerns over the quality of cars sourced through Holiday Autos, with firms like Hertz, Europcar and Alamo key suppliers, and a team of quality assurance experts verifying the standards of smaller rental operations.

There may, however, be a sticking point over the all-inclusive nature of Holiday Autos prices, given that many corporate renters hire cars on their own insurance policies, although Sawers claims that his company could still prove cheaper even if renters are technically paying for insurance twice.

He also believes that the flexibility and customer-focus of Holiday Autos' web-based booking system sets it apart from the major rental brands.

'Our online booking is not bolted on to a fleet operation side, so we can concentrate on making the process quick and easy for our customers, while the majors have to look after their assets and focus on yield management,' he said.

And the vertiginous growth of Holiday Autos' internet bookings makes impressive viewing for any business in any industry.

About 18 months ago, the web accounted for between 13% and 14% of bookings, but that has since risen to 50%, representing about 20,000 visits per day and 600 daily bookings, and Sawers believes it could reach as high as 70-80% of bookings.

Of course, as soon as a potential customer goes online to hire a car, there is a strong chance that they will source prices from different sites, potentially leaving Holiday Autos exposed to attack from another online supplier or from one of the majors that develops a committed web presence.

'The majors have been talking the internet up for a long time, but we are still growing,' said a confident Sawers.

To put the issue into perspective, Avis Europe is pushing hard to reach double digit online reservations, and all hire companies with their own fleets are beset by yield management and utilisation rates, while as a pure broker Holiday Autos can focus its management time almost exclusively on sales and marketing.

The big question is whether Holiday Autos would ever diverge from its traditional business strategy and acquire and run its own hire fleet, capitalising on the profit opportunity in every link in the hire chain. As one of the most experienced rental industry directors in the UK, Sawers is no stranger to the challenges of running a car hire fleet, and in certain locations such an initiative would appear to involve minimal risk. In Malaga, for instance, Holiday Autos always has at least 500 cars on rent, so fleet utilisation would hardly be an issue.

Sawers, however, offers the 'never say never' answer to questions about a future hire fleet, and points out that the company does run vehicles in Greece. Yet across Europe, Holiday Autos' fleet would need to average 40,000 cars to satisfy its current demand, 20,000 in winter and 60,000 in summer, so running its own fleet would be a major affair, although given the outbound nature of the majority of its business it would need just 2,000 cars in the UK to satisfy demand, which would hardly put it in the British big league.

This year the UK Holiday Autos operation will broker between 420,000 and 450,000 bookings, with each rental lasting an average of nine days, and the UK accounts for about half the company's £160 million turnover.

For the short term at least, Sawers sees significant growth opportunities in the UK, and business rentals are likely to feature strongly among this growth. The attaché case revolution in budget travel continues.

Firm braves TV cameras

IT'S a brave company that lets television cameras into its office for six months to film a fly-on-the-wall documentary. The tape of mundane, 'normal' days is likely to find its way on to the cutting room floor, while the confrontational and salacious days ends up in the final edit. Yet Holiday Autos opened its doors to a 'warts and all' documentary that was originally intended to offer an anthropological study of real life in a modern office.

However, the film company's initial ideas were not borne out by the mundane reality, so instead an office soap appeared where private conflicts between staff vied for the attention of viewers with preoccupations over the wobbly desk of the chairman. Timing of the documentary (as the company moved into a new building) was not ideal.

Sawers said: 'It took place when we were in a new building with a new team and with insufficient staff, so it really was chaotic. We were losing about 25% of calls, but that has fallen to just 3-4% now,' he said. 'We would definitely do it again.'

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