Loveholidays CEO: From Covid to £350m revenue and the road to IPO

0:02I joined in December 2019, three months before Covid. So timing is everything. So as you can imagine, moving to a new country in a travel business three months before Covid was probably not the best decision. It's your baby. Like you have put all your heart and soul in your business. So it's very important. I think that when you give your baby away, you give it to somebody that you really trust. You can't leave it blurry because if it's blurry, your employees are going to be confused. It's a turbulent time to run an online travel agent in the post-pandemic world, with turmoil in the Middle East and volatile oil prices.

0:41But it seems demand is rising. Donat Ratif took over as chief executive of Love Holidays in 2019 from one of the company's co-founders. He brought a wealth of experience of leading private equity-backed companies. Since then, Love Holidays has experienced explosive growth, tripling the size of the business to over£350 million in revenue and is now the fastest growing online travel agency for package holidays in the UK. An IPO has been rumoured for Love Holidays, potentially valuing the company at up to a billion pounds. Will we see it float on the London Stock Exchange this year? Donat, welcome to the Business Leader podcast.

1:23you grew up in Mons in Belgium tell me about your early life and then how your career started yes so I'm from Belgium I'm from Mons the southern part of Belgium the French speaking part as you can hear from my accent so Mons is very close to the border of France it's an old mining area it's quite a poor area and so I was quite motivated very early on to study to make sure that I could like discover the world and get out of this area as fast as I could. And then you've led a couple of PE-backed businesses before Love Holidays. Tell me about that. Yes. Well, actually, I used to work in the US for Verizon.

2:06So my background was in telecom. If you remember, in the late 90s, most of the European telecom companies got American shareholders. So it was the case in Belgium. So I got the opportunity to move to the US, where I used to work and live in California, which was very nice. Unfortunately, my dad got a cancer when he was 56. So I wanted to come back to Europe. And that's when I met the PE world because I was offered a job in a company which was backed by Apex and Synvan. This was 2005. And since 2005, I've done nine exits with a few different private equity. Wow. Until this one, which is Lovely Days, which is backed by LivingBridge.

2:46What have you learned about private equity backers? how does a founder pick the right one? It's actually two different questions, if I may, in your question. So my background until Lovely Days was with bigger companies that were not founder-led. And what I liked about private equity is that they are very decisive, they're very quick, they can give you the capital when you grow and it allows you to make things happen much faster than in the normal corporate world. And I know there's lots of negative comments about private equity, but there are lots of positive comments that we should absolutely mention as well.

3:18lovely days is very different from the previous one which i led because it is founder led as you said it's also it was a smaller and it was a b2c business which i was used to big b2b bigger businesses so you could ask like why the hell did you take this job and actually it came from my meeting with the founder it actually started a little bit sooner a headhunter called me a headhunter which i've known for many many years and told me listen i have this great opportunity in london and i think you should go meet the founders there were two founders because I think it's a gem and you could do something very nice out there.

3:51I was not overly motivated by it because it was a small company, only UK-based. I love the UK, but it was only in one country. It was travel, which I didn't know. It was B2C, which I didn't really know. But anyway, I was convinced by this headhunter. I came across, I met the founders, and it was a bit like, I wouldn't say love at the first sight, but we really connected. And I think it's very important because obviously as a founder, and you have been one, so you know, it's your baby. Like you have put all your heart and soul in your business. So it's very important, I think, that when you give your baby away, you give it to somebody that you really trust.

4:24And so for me, that's the connection that we've created since day one with the main founder, which we still have today, by the way, even though obviously our interactions are quite limited. And one of those two founders had been the chief exec of the business. So it made the decision that they wanted to bring in a professional chief exec. That's exactly it. so he had been the chief exec since day one they sold the business in 2018 so business is only 14 years old they sold the business in 2018 to Livingbridge and I think part of the evolution was to find a successor to Al Francis is his name in order to scale the business people used to say professionalize the business but I don't like it too much because it sounds a little bit arrogant but it was there was the purpose indeed to succeed Al become the chief exec and try to scale the business to another level.

5:12How difficult do you think it is looking at the other side for a founder to give up the reins and what would your advice be to a founder in bringing in a professional chief exec like you? I think it must be very difficult for sure and I think as the new CEO you need to understand that that you need to respect the emotions of the founder. I think secondly it's very important that you define principles and they might be different between any founder and any CEO about how the two of you will interact. You can't leave it blurry because if it's blurry your employees are going to be confused did you write that down and have an agreement between you or how did it work absolutely yes i did write it down i did write a one pager you know founders don't like too many documents and too much paper me either by the way so i i just wrote one one page like one and four which i discussed with al uh up front we made a few little amendments but i was quite black and white about what i thought was required respecting again his emotion and his knowledge and then we presented it to the shareholders and we went from there.

6:12And how does it work still getting that knowledge and experience of the history of Love Holidays from the founders? Maybe a little bit of background I joined in December 2019 three months before Covid so timing is everything so as you can imagine moving to a new country in a travel business three months before Covid was probably not the best decision I well probably one of the I made but I didn't know at the time. And so where I could help initially that was pure luck is that I've led a few businesses that went through some tough times. I was in the US during September 11. I led a publishing business during the crisis of 2008.

6:47So dealing with crisis was not something new to me, which I think was new to Love Holidays, which had been successful since day one. That helped a little bit to create the gap. But with that, what I did is that we had a once a week meeting just he and I to make sure that I could ask him any questions that I wanted in order to take as much knowledge as I could but but we did this in isolation of the rest of the business not to contaminate them. And the founders stayed on the board and they still do retain a small shareholding I think? That's correct so he's still on the board so we meet six times a year and a couple other times for a beer but basically it's completely remote from the business now.

7:28I'm Richard Harpin a Yorkshireman who sold my company HomeServe for four billion pounds and this is the Business Leader podcast where we look at the stories and strategies behind modern businesses I'm passionate about helping British businesses scale and succeed I think it's the key to unlocking Britain's economic growth founders and CEOs of mid-sized businesses can become members of the business leader community for coaching peer-to-peer forums and exclusive learning events. So do get involved. Sign up to our weekly newsletter at businessleader.co.uk slash newsletters. It's free and it helps us grow the community.

8:12So tell me about the business that you joined just before COVID in terms of what Love Holidays looked like. So Love Holidays was an OTA, an online travel agent. As I mentioned, it was a young business operating in the UK and selling what's called in our jargon, Shortall Beach, which is a trip which is less than six hours away from the UK. And they did very very well. I mean they were the fifth I think biggest travel companies in the UK already by 2019 when I joined the business. The one thing that I really liked about the business was it was TechPact so it's based on a platform based on technology which is my background.

8:51The one thing that it didn't do it didn't scale well and as you know if you know technology the world principle of scaling is that you can scale to multiple geographies multiple segments multiple products and and our platform didn't do that why because and it's not a criticism i think the founders like build a business for the uk and they build a magnificent business which was already great at the time but they didn't build it with the mindset of like we want to conquer the world of different countries different currencies exactly that different payment methods different suppliers different airlines, different hotels and so on and so forth, where my background is exactly to do that.

9:26And I'm a very ambitious guy for my sins. And so the first thing that I thought is like, this is a gem, but we can take this gem and just make it like a very different company. So we developed a vision, we want to be the global leader in package holidays. And that's what we've done since COVID. We have tripled the size of the business. We're one of the top three travel companies in the UK, soon to be the second biggest one and we are on our path to continue our international expansion we're now in eight countries soon to be 10 by the end of the year and we will continue there's an exciting model here isn't there because it is asset light and technology heavy a relatively small number of people given the number of holidays that you're selling and you're attacking the incumbents like haze travel like easy jet holidays jet 2 tui and you don't have any airplanes you don't own any hotels that's exactly it so that's first of all we're in good company as you mentioned great companies jet to to easy jet booking.com and as you say we have no assets we're completely asset light so what we offer is is three main criterias which are very important for people when they choose their holidays it's ease choice and value and the the magnificent advantages of low holidays is that we're not married to anybody we operate as a marketplace and you as a customer can choose exactly which airline you want to fly with which hotels you want to go to or which destinations you want to go to and as we don't have any commitments which my peers have to have it gives us the flexibility the flick of a switch to send you from one place to the other with the best deal possible so it then sounds quite straightforward to develop the business internationally into other countries but that takes a bit of thought in terms of strategy That's correct.

11:12That's one of the advantages. I don't know if you know, but for an airline to operate in Europe, you need more than 50 % of your shareholding to be European-based, which is, for example, a challenge today for a great company like Jet2. we do not have that challenge so it allows us to operate very quickly and efficiently internationally we do not need to have planes on the ground we do not need to have people on the ground we don't need to book slots and so on and so forth all we need to do well all is to have the technology being able to deal with that huge number of package holidays that you can create when you assemble all those people and do it at speed how do you then decide which countries to go into how many people you need to put on the ground in those countries well first of all we never put anybody on the ground that's the advantage we do everything from london so we are roughly 400 people we're all based in amersmith we have 900 people in in india and south africa to help us with the core center but basically we're all based in london and we do not outsource or technology because technology underpins everything that we're doing and that's one one of the main advantage and so how do we choose countries we could take the easy way and we could take the countries that like packages like the british population the first country we actually chose was germany which is probably one of the most difficult market for anybody who's done international expansion but we chose germany because of the size of the market and also because we wanted to prove that if we can do it in germany the rest will be easier so we chose germany because the size of the markets because they're not very digitally savvy like the uk's Maybe let me ask a question to you, if I may, to turn it around once again.

12:50Do you know how many people in the UK book their trips, their holidays digitally using their computer, their mobile phone or their tablets out of 100? Maybe half the market, 50 percent? No, it's actually much higher. So UK is very, very digital, like the Netherlands, like the Scandies and so on. It's above 80 percent. Now, let me ask you the same question about Germany. So in 2026, how many people in Germany book their holidays through a digital media? I think you've helped me a bit. so maybe it's more like 20%. It's 50%. So it's almost there. But it's like it's much more. And so obviously the potential is huge because even German one day will use digital media to book their holidays.

13:27And we're the first one like being able to operate because our technology is much faster, much better and much more scalable than anybody else. To give you an idea, if you go to a website and you do a search for a holiday, our website is five times faster than any of the competitors we've mentioned before. And why is it important? because in technology, speed means conversion. We've improved our conversion by 30 % since COVID by making sure that the website is super quick. And you know, when you click on something, you do not have to wait like five or 10 seconds. What sort of conversion do you get from a web visit to a completed sale?

14:00So this I can't give you because it's a confidential information, but I can give you high level numbers and then you can more or less derive it. We have 30 million visits to the website every month and we generate roughly 6 ,000, 7 ,000 bookings a day. And in total, you're doing how many holidays and how does that split between UK and international today? We have 5.5 million holiday makers in the UK, which is quite a big number. We have over 800 ,000 in Ireland. So we're quite proud about this because, as you know, the Irish population is roughly 6, 7 % of the UK population, but it represents 14 % of our revenue.

14:38And then we started an expansion in Germany, Austria, Netherlands and Scandies over the last three years. They represent roughly half a million. And do you have local speakers based here in the UK to cover the German and Austrian market and Scandinavia? So that's a great question. And this is where technology helps so much. We use technology and AI. So again, if I go back a little bit, when COVID happened, we had to deal with 30 times more refunds. Remember, I'm sure if you're a big traveler, all of us had like tickets and we were chasing like offline refund. And obviously at the time, nobody knew when COVID would stop and everybody was chasing that.

15:16So from one day to the other, I needed to multiply by 30 my back office, which was obviously not possible. So in the typical lovely day style, we use technology to try to solve the problem. And remember, I'm talking late 2019, early 2020. And at the time we use machine learning. So we basically developed our chatbot, which today is very used by everybody, but at the time was not necessarily the case. And we moved from machine learning to AI to Gen AI. Today, 60 % of our chats, like when people chat with us to ask a question about trial, is answered by the machine. We have a customer satisfaction, which is higher than when it's handled by people.

15:48So if you still want to talk to somebody, you can, but we use technology to make it easier. And if you apply this to the different languages, to your question, again, I'm old enough to remember those days that when you would enter different countries, you needed to hire people and people on the ground in the native language today we can use tool with ai where you can translate and transcreate making sure that you don't lose the the concept of the ideas from one language to the other where the machine like you can chat in english and it's going to translate in swedish in norwegian in whatever language in nanoseconds where do you think that penetration of chatbot will get to from a 60 today that's a good question i haven't necessarily thought about this like that but i I think it can go to the 90 % plus.

16:30The first objections we got to what you will typically hear is like, oh, but my parents and my grandparents are older people and are not used with technology, so we need to help them. And it's true, and that's why we still have 40 % dealt with people. But obviously, the population is aging, and the new generations that are coming are completely used to use technology. And as long as you make it faster, because when you're on the chat, you do not have to wait, and you give a proper answer to your customer, I think that the machine is going to resolve at least most of the simple problem that people might have.

17:03So there will still be a role for call centre staff, but it will be the more complicated conversations. That's exactly that. We use technology. We've actually grown the business. We used to be 100 people. We're now over 400 in the UK. So even though we use technology to continue to scale, but we use people to deal with the proper problems, where they can add intelligence to the problem. And we just leave the very simple task to the machine. And you also have outsourcers in other countries. Just talk about the decision there and which countries you use and why. Yes, so we use, and we've tested a few countries, so I won't tell you why we eliminated some other countries, but we do work with two very big partners in South Africa and India.

17:45And the reason we chose those partners, because obviously those are two big countries with many, many partners, is that one of the things that we've tried to instill since I took over is a customer vision. We want to treat every holiday like it's our own holiday. and to do that you need to work with partner with the same pride in serving our customers and we chose those two countries and two companies in particular because they have the same willingness to give a very very good qualitative customer service. There are some significant savings aren't there particularly now with minimum wage going up with employers and I.

18:20Yeah no there's definitely there's definitely savings. What was the sort of level of savings? That's probably 30 to 40 percent cheaper. Let's go back to international growth. The ambition is to be global. How many countries does that mean you'll be in eventually and how many can you do at once? The growth will go exponentially. You know we first developed in Germany and then made a few learnings and then you integrate and embed those learnings and then you go to two countries and now we've just launched those candies which is three countries and so on and so forth. So probably we're going to go from three to five to 10 to 20.

18:54The goal is definitely to be into 20, 30 countries by 20, 28, 20, 29, because the only thing that you really have to do is to translate the website, which with AI is very easy. We now have pretty much deals with all the airlines and all the hoteliers that we need in the world. Payment methods is one of the complicated matters for people who have expanded internationally, because not all countries are using the same methods and not all countries are used to paying with a credit card. We mentioned Germany, where 25 % of people still require an invoice, a paper invoice, and it's difficult to believe, but it is like that.

19:30But once you've done that, then it becomes very, very easy to continue to scale. So we don't have, as I mentioned, our vision is to be a global leader in package holidays. We want to be the booking.com of package holidays. And for your listeners, in case they don't know, a package is a flight and a hotel that you buy together at the same time. It's very important because when you do that it gives you a protection in the uk it's called outdoor protection but it's also european law which means that in the unfortunate events of something happening to one of the supplier an airline going bankrupt an hotel being closed you will be refunded within 14 days it's the law where if you buy the element separately you're not protected this is breaking my rule of go global with locals and have people on the ground local language people in each country you're not going to be doing that.

20:15No, we're not doing that. So we use local expertise in the preparation before we go to a country because there's always some peculiarities that you want to learn about. But once we operate, we try to operate as efficiently as possible. And just talk a bit more, what do you mean by local expertise? How does that work? So I mentioned, for example, payment methods. One of the mistakes we made when we entered Germany because we've made mistakes, we've made many mistakes, One of the mistakes we made when we entered Germany is that we thought as we skew a little bit more to younger people, being very digital, that younger people will be open to use credit, debit card and so on and so forth.

20:53For people who know the German market, it's not the case. So we had to adjust for that. And so for the next enquiries, which were the Netherlands and the Scandies, we have spent some time with payment specialists in this particular case to understand what are the payment methods, what's the weight of each and every one of them. And if we needed to build either APIs of connection with those payment methods, we did upfront, not while we were in the country. So how different do you think each country is then to the UK model? British people love their holidays. Travel is not discretionary anymore.

21:25More travel is essential. And you just have to look through the window to understand why. Because while I love our beautiful islands, and this is a beautiful country, but the weather sucks. Excuse my French. I don't know what's a better word. So it means that people want to go on holiday. I don't know if you know, but since COVID, there's only one category where consumers have not spent less month on month and year on year. It's travel. So there's a report that Barclays published. And Barclays, I think, owns 40 % of our credit card, which is why it's a good benchmark. So they look at the credit card transactions, don't they?

21:58Exactly that, exactly. They look how consumers spend their money and you can look at everything, like how much do you spend in pubs, in restaurants, in theatre, la la la. The one category, until the last two months because of the Middle East war, but until two months ago, the one category that has grown a month-on-month-on-month-on-year-old is travel. Like British people love their holidays. So that's number one criteria. The second thing that British people love is that once they go into a resort, they like the all-inclusive aspect. They usually, obviously it's a bit of a caricature, but they like to stay in the resort.

22:29They don't like to get out. If you compare with the Germans again, for example, or the Dutch, when they go into a resort, they usually do two or three excursions. They want to visit a little bit. British people are a bit less interested by that. Let's go back to COVID. And you talked about managing a previous crisis. what are the what the two or three lessons that you give for any chief exec or founder that is managing a crisis and unfortunately we all know that there will be another crisis don't we of some sort and as leaders we need to be prepared yeah it's a difficult question i'm not going to give any advice i'm not smart enough but i give a few suggestions and things i've learned along the way where I made mistakes 23 years ago that hopefully have improved.

23:15Number one is think about how your business will look like after the crisis because every crisis has an end. And even during COVID, even though we didn't know when the end would be, but if I talk about La Voli Days in particular, we knew that people would still want to travel. We knew that. And based on that, then I think you can make better decisions because if you don't think about your North Star, you can make on short-term very stupid decisions. For example, during one of the crises I managed in 2008. One of the first thing we did, typically European, is cut costs. We cut costs left, right and center.

23:46And you could believe that it's difficult to believe, but actually we didn't do that at Lavalli days. We doubled down on our technology. We thought, listen, when this crisis will be over, people will want to travel. And while most travel companies, especially the asset heavy companies, will have to cut costs, let's double down on technology to make sure that whenever it's over, we're going to double up and take lots of market share, which is what happened. Now, it's easy to say once it has happened. If I had failed, I would not be in front of you. When I'm in front of you, I can tell you that we have tripled the size of the business thanks to that.

24:16So anyway, the first thing I would say, think about the North Star and that you don't lose the cape and where you want to go to. Number two, you're the chief exec. You're not there to answer to one stakeholder. You're not there to just answer to shareholders who might squeeze you to just save money. You're not there to just answer to your customer who just say, give me the money back because otherwise I'll disappear or to your employees. You need to answer the three of them. And I think it's important that you keep cool and calm. I think it's one of the key characteristics you need to have as a CEO and that you think of the three stakeholders together.

24:48Because again, at the end of the crisis, you're going to need the three of them. You cannot piss off again, excuse my French, neither one of the three of them. And that's what we've tried to do is maintain good relationship with the three of them. And again, we've made mistakes. I'm not saying we're perfect, but keeping a North Star, thinking about all your stakeholders and be yourself. like you need to do things that you you can look at yourself in the mirror the day after and not just because people have pushed you one word the other but it's easier to do when you're 55 than when i was 38 years old i'll give you that people is really important in a business what was the team like that you inherited when you joined love holidays and what changes did you need to make donna i started as the chief of staff of the of the chief executive of the belga of belga com the Belgian telecom in Belgium and one day called me in his office I had only been working for him three or six months and you know in those days he was like really really hard work it was a little bit harder feedback than what we can give those days but basically one of the thing he wanted to teach me is like listen Donna you're a young engineer you think you know everything about life but you know nothing and I want you to know something is that there are three very important things in your career if you want to be successful and he said number one is people number two is people and number three is people and I'm born in 1970 so this is 1992 1993 and it is still true and even though I'm in the tech business in one of the leading edge tech business and we're doing amazing things with AI and Gen AI and so on and so forth it is still the truth.

26:18Now to come back to your question I usually have a playbook and I give myself 100 days to define and my North Star and the people I'm going to work with and it's a bit harsh but I do very quickly a selection of the people that I think will be a good fit for what I'm trying to do and I let go the other people. And then I recruit people with competencies that I don't have. Like one of the things that I think we've done very well at Lovely Days is that we've brought people from outside of travel that have helped us scale the business because they came from sectors that have been able to scale technology business very, very fast.

26:51Sectors such as? So for example, our technology department mainly came from U-Switch. Amazing company who grew very, very quickly and we just knew how to scale business customer service which was non-existent in our business we brought people from delivio and so on and so forth so we basically looked by sector where we were very good we doubled down and where we were where we were weak or bad we were just honest enough to just say listen we need to bring people who know what they're doing to teach us how to get there and i think we did a pretty good job there then my job is to be the coach and making sure that because it's not that easy to recruit as if you like football or rugby or whatever a team sport it's not because you buy the best player that the team plays the best it's about like creating a cohesion but hopefully that's one of the few things i do all right how many direct reports did you inherit when you joined as chief exec and how many of those did you change the i inherited 14 and i changed half of them and was that getting more experienced people you said from different sectors the expert in customer service expert in tech that's exactly that we were obviously very specialized in travel and so i didn't need or we didn't need to bring people who knew about travel.

28:03And I don't say this in an arrogant way, but we didn't know, as my background is in SaaS businesses, which is typically one platform that you scale to multi-billion businesses, we didn't have that expertise in the business. And this is the type of people that we brought in on the tech side. And then on the customer service side, I think it's fair to say that until COVID happened, travel businesses were not as focused on customer service as they should. It has taught us a very good lesson. You know, in every crisis, what does not kill you makes you stronger. And so we also double down on our customer service approach, which means that today, just to give you a number that I like a lot, we track NPS.

28:38NPS was in the low 30s when I joined the business. Now it's high 60s. And I think that together with Jet2 were the two best companies in our sector. So it shows you that it's possible. It shows you it's possible with good technology and great people and, you know, lots of willingness to make things happen. You mentioned a couple of minutes ago that part of your role as chief executive is as a coach. Have you had a business coach over the years or have you had any mentors? No, the honest answer is no. And it's actually probably not a good thing because I advise it to lots of my direct reports and I've not done this myself.

29:13I've had good coaches. I spent lots of time when I was younger playing football and I played at a decent level until I was 29 years old. And I've had great coaches and I've soaked a lot of how they were managing the team and when you win and when you lose and who's on the pitch and who's not on the pitch because not everybody can score the goals. So I've learned a lot from that. And then I was very lucky. So as I mentioned, I started as a chief of staff of a big CEO in Belgium. And so I could attend as early as 22, 23 big boards with ministers and so on and so forth. So you see very qualitative people dealing with situations and you try to learn the good, the bad and the ugly.

29:48and then a little bit later I was lucky enough to move to the US as I mentioned so again different culture different ways of working again working with great people and then throughout my career I was very fortunate to be surrounded by brilliant people that's also one of the things that private equity brings because they are hiring and they operate with very very brilliant people and they have a network of great people which allows you to stalk from the best people that's that's that's more I've learned, more by osmosis than by following a coach. But recommending that your team do have a coach.

30:20And if you were to have a mentor today, who would be your, any thoughts on who would be your dream mentor? Yeah, well, I kind of have one. I have an amazing chairman. He used to be the CFO of Ocado in the best years of Ocado. And as a CEO, I love CFOs as chairman because on the contrary of CEOs, they don't speak a lot. They don't need to fill in the room all the time. But when they say some things, it's always the very important things and the questions that you don't really want them to ask, but actually it's a good way that they ask. Give me an example of a question that he asked that you thought, wow, a great question.

30:57I hadn't thought of that. I'll give you more the challenge than the question, which is we've been doing excessively well. I think it's fair to say we've tripled the size of the business. We have improved our margin. We have a very, very strong cash balance. I think we're recognized not only in travel as one of the leading edge tech companies out there, but one of the things he challenged me a year ago or 18 months ago, it's like, okay, don't be complacent because now the team is doing very well, but you're going to achieve a different size of company. Now we're roughly like 400 million revenue, which is very different than the 100 million that I inherited.

31:32So you will need different type of organization, operating model, caliber of people. So make sure that you don't wait too long before you start this process, because as you might know, you might remember, I'm sure as a CEO, sometimes you'll be like the hamster in the wheel. There are so many challenges that you need to fix on a day-to-day basis. You sometimes forget to take a step back and look at things. So that's the type of challenges that he would just put in front of you and you're like, oh, yes, he's absolutely right. I need to take a step back and make this happen. So you can get two for the price of one then, a mentor and a chairman that comes for one fee.

32:02Yes, we got a good deal, a package. The other important thing in a business is culture. Has that changed at all from moving from a founder culture and an earlier stage business to what it looks like today, Love Holidays? It has changed. But the main thing I didn't want to lose, what the founders had created in this business was the company ethos was fantastic. Absolutely fantastic. People were in love with the business, dedicated. They'd give everything for the business. And that's, you know, travel is seven days a week, 24-7. that's not a joke there's always something happening in travel and i didn't want to lose that but it's easier to do that when you only 100 people because you almost know everybody and you can do this by osmosis as you grow the business to over 400 people plus all the all the other people out there you need to put some systematic in place some structure in place to make sure it happens without losing this company ethos but still being able to scale the business so we uh well first of all we hired the chro because as a good funding business we didn't have somebody taking care of people, believe it or not.

33:08And there wasn't one previously? There wasn't one. There wasn't one. So that's one of the first things that I've done is hire one. Again, somebody who came with a very good pedigree from Meta, from Pepsi, and from Expedia. So he knows what he's doing. Quite experienced because we're a very young company. So I wanted to bring a few gray hair as well because it's very helpful. And then we developed a plan to make sure that people were very engaged. I've learned very early in my career that when engagement is more important than your CV, your intelligence, your capabilities or whatever, it drives productivity.

33:40So to give you a few ideas of things that we do, we run a monthly survey. Every month we ask people like what they think about all the things that are happening in the company. Once a month I do a whole hands, a town hall. So I sit in front of everybody like live. I give them an update on what's happening in the company and then they can ask me questions. That's everybody in the office or some of those are on video? Everybody, exactly. Exactly, office and on videos. And by the way, we don't only do this when things went well. Like we did this also during COVID when it was very difficult. Obviously, at the time, everybody was on video.

34:09So we've never hidden from the truth. And I have a great CFO, but I have a great team. I'm very proud of my team. The CFO has been there since pretty much day two. Like I think it was employee number seven. So it's been hugely helpful to the work that we've been doing. But so culture is something you maintain. It's easy to put on a slide that we're going to be the best at this or the best at that. but it's something that you maintain on the day to day with everything that you do. Why is it so important for us? Because average age in my company is low 30s, over 40 nationalities. And in tech, as you know, in London, it's very difficult to keep your people because you have amazing companies like Google, Meta and so on and so forth.

34:45We want to steal them and they pay quite well. So you need to make sure that the culture is so good that people feel empowered, accountable and that they are happy in what they do and what they deliver. And I'm happy to report that our churn rate is very, very low. is below double digit, which in tech those days is amazing, especially when you see the performance and the quality that we have. So yes, we've developed the culture, but we've worked very, very hard to keep the company ethos that the founders have built. Let's talk a bit more about the growth levers for the business. We've talked about international.

35:15How else are you growing Love Holidays? So we have three main levers. The first one is international, which is the biggest one. The second one is products. I mentioned that initially the company was focused on short haul beach which is again a trip less than six hours from the UK. We launched long haul beach which means if you want to go far east or far west or far east it's a bit risky those days but far west you can still you can still go which was actually a market where there were not too many competitors there were only two airlines who were operating that way but we decided to enter that market and city breaks, which is something that people like more and more because it allows you in three or four days, especially with low-cost airlines, to go anywhere else.

35:55The reason we chose those three, by the way, is because they represent 85 % on how you and I and consumers spend their money when they go on holidays. So we go after the big buckets first. But then we're also looking into ski as the next one. And, you know, who knows what's going to be next. So that's for the product side. And the third axis is segments. We are heavily skewed to younger couples being digital. 40 % of my customers are under 35 years old, which I'm quite happy because of course, 35 years old, they will go. Helpful they stay with you. They'll stay with me, exactly. And that's why customer satisfaction is so important because you need to focus on your retention rate, which we've also doubled over the last three years, i.e.

36:34more and more people come back once they've booked with us. And so we're moving into families. Now that we're, we're already good in families, but we're not as good as some of our peers that have been a bit implemented for longer. And so we're going into that segment, which is a big segment for us. So that's on the B2C side. And then we're entering the B2B2C side, which is basically working with retailers or other airlines or banks. You know, they always look for extra products that they would like not to sell, but to give away to their customers. And so we're working into partnership so that if you want to book a package through some of those other channels, you can via Loveli Days.

37:10I think you have a partnership with Ryanair. That's correct. So we were the first one to sign a deal with Ryanair. Ryanair, who historically was less friendly with the industry. And this is actually quite typical about Love Holidays. There were many lawsuits in our industry which Love Holidays never participated in because we thought we should build our business based on partnership. Remember, we don't own any assets. So what's the point of fighting with people who own the assets? So it has taken us a few years because they were not the easiest partner to deal with. But I can tell you that since we have the deal, they're so nice, extremely professional, extremely agile.

37:46I mean, exactly what you see is what you get. And so we're very happy to work with them. It is one of our main airlines. It feels like that's a lot to handle in terms of growth. How do you prioritize? I like the rule of three. As I mentioned a bit earlier on, I'm not too smart. So things cannot go like if it becomes four or five, I start forgetting. So we have this golden rule, which we try to apply, which is in everything that we do, we try to limit it to three. So we have three company objectives. And under those company objectives, you might have three again for the level below me and so on and so forth.

38:16But we try to limit to three. We also typically take business. We're very agile. So we make sure that we don't spend months, weeks, hours on building plans that, you know, you can throw away in the garbage the day after you start this plan. And we keep it very agile so that obviously we're very clear about the North Star. But we keep things very, very agile so that we can react very quickly. Good example, when a crisis like the Middle East happens, you need to be very quick on your feet to make sure that you can answer to the needs of your customer, which is something we can do thanks to the technology we use.

38:45Looking to the future, Donna, what does the travel industry look like in your view in 10 years' time? I think the industry is going to continue to grow. It has grown massively. It has grown by 37 % since 2019. As I mentioned, travel is now essential and people want to travel. Last year, people took on average five trips a year. Three of them were international. And I don't see that trend reducing. I think that trend is going to continue to increase. So I'm very optimistic about the travel industry. It's a good industry to be in when you think about the different industries in the world. We bring happiness and pleasure to people.

39:18Now, not to confuse with something that's not important, because for most families, it is one of the biggest budgets they have. So you want to make sure that you optimize whatever they want to do. But I'm very optimistic about travel. We will have bumps here and there, but historically travel has outgrown GDP by one and a half times. And the projection is that it's going to continue to do that. So crossing fingers, hoping that the wars will end very soon so that we can go back on the tram lines. And what about you personally? Do you love holidays? Yes, I do love holidays. First of all, I love the UK and my wife and I love London.

39:51What a great city, what a great country to be in. So throughout my career, I worked in six different industries in six different countries. and I can tell you that London with Vancouver I used to live in Vancouver Canada is definitely in in my top two so yes we do love holidays we take as many as possible but never enough because obviously when you work and when you have a family and when you have children you can you cannot always do whatever you want but you know this is a job in an industry that's so passionate that we can't complain I'll take more holidays when I'll be retired and the future for the company you were talking about a floating on the stock market an IPO yeah that's correct well it's been in the press so it's not a secret it was it was our intention and it is still our number one goal obviously Mr Trump had a small or big impact on us by by starting the war at the end of February which for us was not very fortunate from a timing perspective but it does not change anything the The company still continues to be very successful and continues to grow, which as you know, as the CEO, is the main thing that you need to focus on.

40:57Because if you start focusing on what you don't control, you're going to lose yourself. So I focus myself and my team on what we control, which is making sure the company continues to grow, continues to serve customers, continues to please customers. And then a window will open because we know that IPOs is all about window. And whenever the window will open or reopen again, we'll be ready. And your list on which market, do you think? The business was created in the UK. 90 % of my people are based in the UK and 75 % of our revenues in the UK. So logically, it shouldn't be too far. And talking a little bit about your succession, you're a very young looking 55 year old.

41:35You've done a number of chief exec jobs. You've been doing this one for nearly seven years. It's a long time, seven years for me. If you look at my career, of course, COVID had an impact because it gave us an extra two years for free. But yes, that's in the cards. That's something I'm going to need to prepare. I'm not ready to go because I think the company, I think I can still help the company for a couple of years. But I think all of us as CEOs were good at certain stages. You were a founder. I'm not a founder and I don't think I have the skill to be a founder. I think I'm better at scaling businesses.

42:09And then once they get to this phase of less growth and becoming a little bit flatter, I think it's going to be time for me to give the baton to somebody else who will be better suited. and better suited when we go for fast growth.

42:24Donat, I've learned loads. Thank you so much. Really enjoyed it. Thank you very much. Great learning, including the rule of three from Donat Retief, the CEO of Love Holidays. Thanks for listening. Please do rate us and subscribe. And make sure to sign up for our weekly newsletter at businessleader.co.uk slash newsletters. With more people on board Business Leader, we can have better conversations and inspire the UK's next wave of business leaders.