46. “We lost 11 million in one month!”: What Hays Travel did to go from crisis to smashing £3 Billion | Dame Irene Hays

0:00Welcome to All About Business with me, James Reed, the podcast that covers everything about business, management and leadership. Every episode, I sit down with different guests who bootstrap companies, masterminded investment models or built a business empire. They're leaders in their field and they're here to give you top insights and actionable advice so that you can apply their ideas to your own career or business venture. smile supportive motivational innovative loyal and excellent that's the key framework that has led Hayes travel to being the UK's largest independent travel agency with five stars on trust pile today's guest is Dame Irene Hayes who started the company in 1980 with her late husband John they were hailed as heroes of the high street for saving over 2 500 jobs with the acquisition of bankrupt Thomas Cook back in 2019.

0:57Irene has also co-founded the Hayes Travel Foundation and built a leading apprenticeship scheme, employing hundreds of apprentices and investing millions in young people. Well, today on All About Business, I couldn't be more delighted to welcome Dame Irene Hayes. Irene is the majority owner and chair of Hayes Travel, which is the largest independent travel agency in Britain. She has a remarkable story, which I'm very much looking forward to asking her about. But Hayes Travel has grown from a little shop in Seaham in County Durham, where it was started originally by Irene's husband, John, to a company today that has 512 branches around the UK and a turnover of£3 billion.

1:45An amazing journey. Irene, I've got so many questions to ask you. But the first one is the beginnings, the origin story of Hayes Travel. Could you share that with us, please? Yeah, absolutely. The business started in 1980. And John had come back from university and knew that he wanted to start a business. So we looked at options about what the business could be. And there were two. So the first one, because primarily his dad was a joiner in the colliery, was that it could be an undertaker. Ah, so undertaker. His dad could make coffins. That was one that you considered. And the second potential, because there wasn't a travel agent in Seam in County Durham, was to open a travel agency.

2:37And John's mum had a babyware shop in Seam. so the decision was made that John's dad would build a counter at the back of the babyway shop and he would put a garden trellis to divide the baby grows and the pants and the dresses from the travel agencies and then he built a brochure rack on the left hand side as you walked in and he started selling butlands and pontons and in the first year I still have the documents the business turned over a total transaction value of£812. Wow. So he chose travel over undertaking. I suppose it was more repeat business in travel, I believe. And it's thankfully you say.

3:23Conferences will be different. More fun, I imagine. And it started in the back of this shop. So how did it grow from there? What happened next? Okay, well, excuse me, I'd like to say it was a sort of a straightforward process, but it was anything but. so having sold Butmans and Pontons the decision was made that we would like to sell Thompson holidays and that required a relationship with ABTA the Association of British Travel Agents So that's a regulatory organisation It was, yes well quasi-regulatory it's not a regulatory organisation such as the Civil Aviation Authority for example but nevertheless it was necessary to get Abte branding for the sale of our holidays which was a very powerful endorsement and at the time there was new email so we wrote a letter needed to fill in an application form and then an inspector came to have a look at the store so we opened the door and made his way in this small shopping scene made his way through said baby groves and party frocks and tights, and spoke to the staff and then went on his way and wrote a letter and said, well, no, no, you can't really be a member of Abita because you're not really a travel agent, are you?

4:51Because you haven't even got your own front door. So we wrote back and said, is that the only reason? And he said, yes. And then we wrote back and said, well, come to our attention that there's a shop in London called Harrods and in the back is a travel shop called Thomas Cook. Could you explain the difference, please? And he said, oh, OK, then we can have a licence. Oh, good for you. Yeah, you've got to be consistent, obviously. And so you forked your licence. Yes. And things took off, so to speak, from there by the sound of things. Yeah, basically. So we went from one shop to two shops. The second shop is in Sunderland, where we currently have our head office.

5:34So all of our businesses are operated from a very lovely head office right in the centre of Sunderland. You've just gone back up to the Premier League. Could I just mention that once? Yeah, I mean, my son-in-law is a Geordie. We love him. He's called Jake. But we did point out to him for a moment, Sunderland were top of the league. Top of the Premier League for three hours, actually. Which amused us. Yeah, but we were all taking this. Well, well done, Sunderland, for making it back. It makes for a good little derby. And I bought part of the football club for my husband, which is another story.

6:05So you're a part owner of Sunroom. Yeah. I know you love football. A consortium with Niall Quinn. Right. Called the Drummerville Consortium, which was, honestly, talk about kidding a sweet shop for my husband. But we, at the time we were in the championship, I'm going off on a tangent here, is that okay? No, no, go on. This is good. We like tangents. We were in the championship and we did a three-year plan and we decided that we'd probably get up to the Premier League in year three and we did it in year one. So we had a ball. But getting back to the main point, yeah, we started operating different stores and taking over things like hairdressers and butcher shops in small towns and villages in the northeast and then grew steadily from there.

6:50Right. Very good. And I understand that you were very clear from very early on about how you were going to approach business or you had some values that you sort of wrote down or agreed. Yes. Yeah. Could you explain what happened or how you did that? Because I think that's really sort of fundamental here. Yeah. So I think we'd both did an MBA and had, you know, what makes a good business and bringing clarity to one's purpose and objectives. and it probably wasn't year one, maybe year two or three probably. Yeah, but early on. And we decided by then what we'd need to do is articulate what the vision was for the company.

7:32And there we were at the time with a handful of shops and we decided we wanted to be the most profitable independent travel agency in the UK through valuing our people, our customers and the communities where we serve them. And that third principle, the third pillar of Hayes Travel, is vitally important to us, and we spend probably as much time doing that as we do and checking on the bottom line. And that was a big thing coming from the backgrounds where both of our fathers had worked for the collieries, mine in Ashington and John's in Seam. and we'd always been part of a community and had always given back to the community right from from day one and clearly that's progressed and developed as the business has become bigger but yeah so that we set the vision first of all and it actually hasn't changed very much I've got the early inductions that we did and making sure that everybody in the business understands the purpose of the company, but more importantly, what their role is within it.

8:45So we then had started to do newspaper advertising, and we always had made the same comment, smile, Hayes travel, nobody offers you more, and that has stayed with us. That's your ad, smile, nobody offers you more than Hayes travel. I was enjoying it just now. So we decided to take the word smile and use the mnemonic of that to create our values, which, again, haven't really changed that much over the years, which is being supportive, motivational, innovative, loyal and excellent. And then we unpack each of those and describe what that means in working life and in working with each other. And then we cascade that down in a golden thread all the way from the vision through the values to the performance appraisal and expectations.

9:44So in a year, there might be under the main vision, our core objectives. You know, we want to sell more crews. Then we make sure that in our marketing, people know that we want to sell more crews in our stores, in our advertising and creative. So yes, I think even from those early days, that's been really important to just be clear for everybody about what the business is about, what it stands for, and what it holds to be at the core of what it's about. If, like me, you run a business or manage a team, you'll know how important it is to hire great people. Over the last 65 years, readers work with thousands of businesses around the world, helping them to recruit and to grow.

10:34This is what inspired us to create Read.ai, your new AI hiring agent. It's here to save you money, to save you time, and to help you get the right match. Whether you're hiring your first team member or your 50th, Read.ai is here to make it easier. Try it free for 28 days, exclusively available during our beta period. Go to read.ai and get started. Read.ai, your higher power. It is very clear. I think that's very interesting to me that you've done that so specifically because I think it's very helpful for everyone in an organisation to have that clarity. And I like the fact that it's also consistent, doesn't change, when so much around us is changing.

11:22I think that's a lesson for anyone. I'd be grateful if you tell our marketing department. Yeah, no, marketing people always want to change stuff. But actually, you know, it's often sometimes just stick with it, you know, because they get bored of things, I think. I have the same problem with my marketing department sometimes. But that's good, too. They're trying to be innovative. So it's striking. And one of the things when I was researching Hayes Travel is I looked up your Trustpilot score. And it's remarkable. It's five stars with 4.9. It's the highest. And it's got a very large number of people rating you at five stars.

11:58um it's truly remarkable and i was thinking about that so tell me how that happens but what nothing what what's the essence of this of customer satisfaction oh i think you go back right back to the vision about um putting your people first that before you can help your customer before you can help your community you have to have great people who understand the difference that we want to make. And I think the difference we want to make, because travel really is an emotional purchase. You know, it's not like going to a hardware store and picking up a widget or a spanner, which is quite, I think, clinical and transactional.

12:45Ours is very different. Holidays are usually one of the most expensive things that anybody will buy in the course of a year unless they're buying a new car or an expensive sofa or having the bathroom or kitchen done. And it's a very precious time, very, very precious time. And increasingly so, people value experience above stuff now. And in our training and in our induction, being clear about what we stand for around looking after our customers. I don't really like the expression of, you know, having your back. We want our customers back wherever they are in the world and whatever's happening in the world.

13:36And there are an awful lot of challenging events happening in the world. Some, you know, Mother Nature, global warming, wildfires, ash clouds. but some man-made insurgencies, wars, which impact travel. And we want people to know that we care. We care profoundly about them. If they've booked with us, it's more than buying a widget. There is an emotional connection, an even bigger emotional connection, if it's an anniversary or a wedding. so our people know that that is who we are and that the expectation is that they will be, in the performance appraisal, rewarded and recognised for how good they are at that.

14:31Right. How good they are at caring for people. And just seeing those words when they're in the middle of a performance appraisal, for me is something I think some companies find uncomfortable or fluffy or difficult to get hold of. It's not really. If you just tell people that's what we're about and we're about you know value and expertise and choosing the right holiday you know those sorts of things but ultimately we want people to know that we're there and and clearly there's as online travel agencies emerge and there are some very good ones but they don't have mary sitting in the local shop who has you've handed over your money to and you're in dubai airport and you're supposed to be on a connecting flight to maldives and your flight's got a problem we want our people to get the first flights on the next plane so it's about about being crystal clear that we're not in the transaction business right so mary's there for you if you make the call from the mulls mary's there mary's not there we'll know exactly where you're supposed to be when because of the systems that we have so mary's on a holiday so a day off um we we will know where that customer is and in fact the very first thing that we do if we know that there's been a problem, we'll see how many people we have in that part of the world.

16:07And sometimes we ring them before they ring us. Right. That's good. So you've talked about, I've heard the expression, I think it was from you, the soft infrastructure is more important than the hard infrastructure in many cases. Is that what we're exploring here? Is that what you mean by the soft infrastructure? Actually, yeah. I think... What else would you cover with that? So soft infrastructure is providing, well, I'll start with hard infrastructure is providing people with the processes, with the technology, with the hardware, with the right environment to carry out the business. But the soft infrastructure is about telling people how to relate to other people, telling people how to listen carefully to other people and understand what they want.

16:58So you and I might have very different preferences. You know, I like one week of extreme learning about something I've never done before. And then one week of extreme lying on the sun larynge with a cocktail and reading a poop. Right. And you had to get them both in the same trip? Yeah. Well, you do, but that's really what I like. You might like going to ancient cities and learning about the history and, you know, food or wine or whatever. So the soft infrastructure is teaching people how to do that. But then increasingly, honestly, increasingly teaching young people who come out of college or come out of school that it's okay to smile at somebody because they think it's really cool to be sultry and sullen.

17:51And because to spend most of their time on their telephones, interaction isn't quite the same. But it's often for structures and providing that training. You smile at a purse. Well, so is that seriously true? Oh, seriously true, yeah. How to smile. One example would be that, and I say to them, you know, it's really important that you smile at people and you have to smile with your eyes as well as you smile with your mouth and be interested in them and they're all sitting there like this with their sullen, sultry, imagining themselves on a selfie. What are they imagining? Yeah, that's James Bond on it.

18:34They're thinking, yeah, right, yeah. I'm going to go around smiling the way you go around smiling. Making me smile just thinking about it. Every time I bump into them, I go, hello. And if they don't say hello and smile, I jump back in front of them and go, hello. And eventually they go, hello. So smile is a big part of your business in all sorts of ways. But it's truism. People feel better if they smile anyway, don't they? I feel better than smiling. But I mean, in terms of emotional connection, it's one of the, you know. Yeah. But right from the start on their introduction and in their training and all the way through their development, you know, we're all still developing and learning.

19:19I think it's vitally important that they feel that they have got that level of support for whatever the challenge is. And that's what I call soft infrastructure. Right. And sometimes I think it's easy to not spend attention on that because people are so busy writing processes and this is what you should do and that's what you should do and writing how you should transact rather than how you should have a good quality relationship so you deliver the best holiday for somebody. Right, which is ultimately what the customer wants. Yeah. Yeah. So just going back to your sort of business journey, you started opening shops.

20:06Now, from what I understand, you didn't take on any outside investors. No. You sort of, I mean, basically sort of bootstrapped the business with your own cash flow. Yeah. How did you do that? Because, I mean, it's grown, as I mentioned in the introduction, hugely. 512 branches, 3 billion turnover. This is a big operation. Well, that bit's okay. But in addition to that, we have 750 home workers. So that grew significantly. Well, they were working in Hayes Travel as well. They're all self-employed. It's a self-employed model. But they all work under the banner of Hayes Travel and we do all of the back office.

20:42And also we do the back office and help and business support and investment for 122 independent travel agents who are not A's travel. And then in addition to that, we have a tour operation. In addition to that, we have a large, very large foreign exchange business. So it's grown in all of those areas. There's a lot of innovation going on here then, isn't there? Yes. Yeah. Over the years. Where do those ideas come from? I mean, to go into foreign exchange. Well, they come from everybody. Everybody. Yeah, so we all are required to do back to the floor every year.

21:21And when we go back to the floor, the whole purpose of that is not to have your photograph taken to prove that you put a uniform on and gone there. It's to actually learn about what needs to be done. But some of the innovation that we have from our people is phenomenal. And during COVID, I asked, we'd obviously just acquired Thomas Cook on the 8th of October. Yeah, I want to ask you about that. In 2019, and went straight into COVID. But going back to innovation, which is at our core, right in the middle of our smile values, I don't think that anybody, anybody has the monopoly on innovation. and in fact the person who was at the front end delivering that service will know 10 times better than I will how to make that environment or that process or that relationship with the customer better, easier or maybe improve things for their colleagues.

22:26You know, why are we doing it like this? Could we not just, you know? I think it's important, again, to make space in companies to allow people to have that voice and to give them the opportunity to innovate and to reward them for doing that. So it's partly creating a culture where that's really encouraged and celebrated. And talking about it. So every conference, I do a monthly video and talk to everybody. And usually I choose one of the values to talk about. I don't talk about all of them all of the time. and I try and find opportunities to endorse or find great stories about where people have demonstrated one of the values and how impressed I've been and what has happened as a result of that.

23:19So you're living it and breathing it and it's not something which is just on the wall of our training room, though it is on the wall of our training room. But it's much more than that. We live it and breathe it and talk about it all the time. I mean, one example, if you take the, I mean, I feel as if I'm moving on, but the innovation bit in travel, which is the biggest industry in the world, if you stand still, you go backwards. So it's important to innovate in terms of technologies, but it's also really important to innovate around how public taste and public trends and people's desires for what they want to do on holiday and be really focused and clear about making sure that your horizon scanning and not looking down in the lighthouse.

24:17You have to take your brain up and make sure you're looking at the research, making sure you're watching the trends on TikTok, on Instagram and what's happening and where people want to go. because 40 years ago, and we're 45 this year, 40 years ago, you'd have a brochure rack, you know, with fixed prices in. You know, you want to go to Lorette de Mar, it'll be£92 or whatever, you know, for a family of four, probably.

24:53That used to be the inspiration for people, but social media has transformed that. So I think innovation is necessary to make sure that you keep up to speed with what customers want, what it is that they want, not what the business wants them to want. Because those days have just gone. So spoon feeding a brochure doesn't hack it anymore. No. So it's interesting you talk about not hacking it anymore. You mentioned the Thomas Cook journey. and I'm recalling back in 2019 you and your husband John were described as the heroes of the high street because you you picked up Thomas Cook when it was down and I think you saved two and a half thousand jobs we did doing that which is remarkable um but it was really on its knees wasn't it and you've sort of made a success of that despite pandemic and all sorts of other I imagine substantial challenges.

25:53Could you share that story? Thomas Cook failed on the 23rd of September in 2019. And Thomas Cook were a fantastic brand and been great partners of ours for a very long time. And they trained their people very, very well. And we were feeling for the people who had been told, some on video, some via text, that they had been made redundant. We clearly saw an opportunity and wondered what the process would look like and what it looked like was that the official receiver appointed KPMG to have a look at what could be done with the stores. Meanwhile, there was a national... I think everybody felt that somebody could have done something for Thomas Cook the way the German government helped Temeskuk in Germany.

26:48So there was an awful lot of pressure to try and look at options very quickly. So the process that they came up with was bids to operate some of the travel agencies and the bids had to be in on the 8th of October at 5 o 'clock, I think. And normally you'd have due diligence. You'd have months of due diligence if you were making an acquisition. and we didn't have that opportunity. So what we did was we took an AA road atlas and put it on the kitchen table and had a look at those areas that we would like to operate the stores. So we started off in Leeds, Yorkshire, Scotland, where we thought it would be very good.

27:33So this is you and John together in the kitchen. Yeah, yes, yeah, in the kitchen. Right, good. And we would circle and write down the areas that we were interested in. and then map that against where the stores were, where it made geographic sense from a point of view of supervision or advertising and so on. And this went on for a few days. And then eventually we came to the conclusion we should just take them all. So it got to four o 'clock and there was a particular format that we needed, which included the value of the transaction. but what we could do for these people. So it was a combination.

28:16And KPMG rang us that evening and said, you've been successful. And we said, right, where are the keys? And when can we start? And they said, tomorrow.

28:31So they said, but it's embargoed until nine o 'clock tomorrow morning on the 9th of October. so I rang a friend of mine we didn't have a PR person and I rang a friend of mine and I'd said are you busy tomorrow and they said well yes but can I help or did you want and I said well John and I have just made a decision and we think it could be newsworthy so the next so she said yeah tell me what it is tell me a little bit about it and I said we've just acquired Thomas Cook and there was a pause and she said yeah I think that'll be newsworthy so anyway she came in the next morning and we had literally hundreds hundreds and hundreds of newspapers and television stations and radio and it went from there but we were fortunate enough to recover not all of the Thomas Cook staff because a lot of them immediately needed the work and gone off and been successful elsewhere but they have been fantastic ever since.

29:42And clearly within 12 weeks, having acquired the people and all the stores, we couldn't sell a holiday anywhere in the world. That's because of the pandemic. That's right. So the acquisition of Thomas Cook, did that take you to your number one goal from the original objectives you had in your kitchen? Did that make you the number one at that point or was it later? No, we were already the largest independent. You were already, but without Thomas Cook. Yes, without Thomas Cook. So you didn't need to do that to get you to your goal. No, no, no, no. And we wouldn't have done it. No, I know. So you were already worse at that point.

30:19Yeah, we were the largest independent travel agency with about 160 stalls at the time. So how many did that add, the Thomas Cook? At the time, it was 555. Thomas Cook added to what we already had. So it was more than, well, it was two-thirds. So, but the way that the transaction was framed was that it was a license to operate. And we had 18 months to see which stores would be profitable because many of the stores were not profitable. No. And many of them are what I would call trophy assets. So they were in places where we would never pay that much rent. Well, like Harrodsville. So in all of the big shopping complexes, there'd be a really posh, grandiose Thomas Cook that would be losing lots of money.

31:12We don't operate like that. We just want to deliver good service. We don't need the gloss and glitz and glamour. So you'd look for different locations? We looked at different locations, but some of the stores closed because just that end of town was wrong. or we couldn't negotiate with the landlords, but it took an awful long time. And as you say, we went into the pandemic. Now, going into the pandemic, furlough didn't actually come into being until quite a way in. No, I remember. So we needed to do something. And at the time, all of the supermarkets were providing delivery services because people couldn't go into the supermarkets, as you'd recall.

32:01And then eventually they let people go if they could queue up and they would only allow, you know. Yeah, I remember standing in those queues. Yes. So I thought, oh, well, particularly vulnerable people couldn't go to the stores even then. So vulnerable people were advised to stay at home. And I thought, oh, we've got all these fantastic people who are wonderful at customer service. So I contacted every supermarket that I could to ask if we could do the call centre operation for them and was unsuccessful. But I had spoken to a couple of call centre operations and on the ninth pitch, I failed eight times.

32:46And on the ninth pitch, somebody said, well, you've got no track record around this. And I said, categorically, our people will be fantastic for you. So we got the training team and they gave us 50 heads in the first instance. But it was a very, very painful process to get to even 50 heads. And they were, those people, the first 50, were so successful that by the middle of the pandemic, we had approximately 4 ,000 people alternating between working, like 2 ,000 would work on the calls. 2000 would be trying to help people whose holidays were booked for that time. And the last thing we wanted to do was take our eye off the ball of customer care.