The name Lowcost has been synonymous with the rise of dynamic packaging since it was set up in 2004. Founder and chief executive Paul Evans assesses what its story says about how the travel industry has evolved.
By LEE HAYHURST
When
Lowcostbeds.com was born the budget flying revolution was in full swing, apparently testing the traditional holiday booking model to destruction. Travel had its ‘big four’, but
after a difficult 2003, during which MyTravel announced an unprecedented second-half loss, there were predictions one was poised to fail.
The companies that had been established in the first dot-com boom and had survived were recording what Travel Weekly reported at the time as “astounding growth”.
Market share Civil Aviation Authority figures in 2004 revealed the overall size of the market was unchanged at 31 million passengers, but that the share enjoyed by the major operators was dwindling. After that year’s September
Atol renewal it was reported that the big four held a 48% share, down from 52% the previous year and well down on the peak of 57% in 2000. And
lastminute.com had just
entered the top 10 Atol-holders, leapfrogging Expedia, which
had broken into it the previous January. It was into this fast-changing
market that Lowcostbeds launched as a business-to-business bed bank supplier, later also becoming online travel agent Lowcostholidays. At about the same time, rival Medhotels was established; it was destined for a starkly contrasting future that would see it first bought by
lastminute.com before being sold to Thomas Cook.
Archaic systems Lowcost founder Paul Evans, at the time a self-confessed cog in the corporate wheel based on his time at MyTravel and First Choice, recalls how archaic the industry was. “People used to communicate
with text. There was no email and you had telex overseas,” he recalls. “Reservations used to be printed on paper, and company mail boxes would arrive on the carousel at Gatwick. That was how the
18 •
travelweekly.co.uk — 4 September 2014
large guys were working.” The advance of technology has
allowed new entrants not weighed down by legacy systems to steal a march on established rivals whose best days were said to be behind them.
“What Lowcost is all
about, and I repeat this to my team all the time, is putting the customer in control”
Empowering the customer But Evans says there was
something more fundamental going on than just the changing of the corporate guard. “What Lowcost is all
about, and I repeat this to
my team all the time, is putting the customer in control. “It’s about being neutral,
offering two to five-star properties and letting the customer choose the dates, departure airport and be totally flexible. Really it’s about independence.” This is why Evans says he has
pictures of the Statue of Liberty and Che Guevara on his office wall – not obvious bedfellows. It’s an attitude that has
brought him into conflict with powers that be, particularly
Paul Evans promotes Lowcostbeds on Brighton beach in 2005
in 2013 when he relocated Lowcostholidays to Palma, Majorca, and left the Atol scheme. “I’m not very keen on being told what to do,” explains Evans. “I believe the UK is over-regulated, with too large an influence from regulators, stemming creativity.” The empowering of the customer – Expedia’s turning around of the travel agent screen – was despised as much as it was feared by traditional agents who felt their USP was gone. What many regarded as
job-jeopardising technology has also served to empower suppliers and their move to sell direct and cut out the middleman.
Independence for all However, Evans says this technological pincer movement is not a threat. He is optimistic about the prospects for firms, like his, that sit between the supplier and the consumer, supplying others in the same position. “The really interesting thing is
we talk about the consumer being independent, but it’s actually the supplier becoming independent as well and taking control of their distribution,” he says.
BIG INTERVIEW
Paul Evans looks back at Lowcost’s first 10 years
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