Welcome back to Series 3 of ECI's podcast, Building Successful Businesses. In the second part of our series chatting to Martyn Phillips MBE, we ask him about what the transition was like going from CEO of B&Q to CEO of Welsh Rugby Union, what it's like when everyone you meet has an opinion on how well you're doing your job, and who has a harder role: a CEO or a Head Coach?
Listen to Episode 1.2:
Available on Apple Podcasts:
Transcript:
Fiona: I've been chatting with Martyn Phillips, a business leader who after 12 years at B&Q, including a number of years as CEO, moved into the world of rugby, becoming group CEO of the Welsh Rugby Union. In our latest episode of "Building Successful Businesses," I asked Martyn what was the transition like from the world of DIY, to the world of sport?
Martyn:
On the one hand, it was really straightforward. Commercially, it was 200-odd people. B&Q would turn over more in four days than Welsh Rugby would in a year. The numbers were obviously much smaller, but then different commercial challenges, so things like cash flow and debt become much more of a challenge than they do in a big group company that I was part of. But the bits that, frankly, shocked me the most - one was the scrutiny. As you know, with the big corporates you do your quarterly reporting, you get a bit of attention for a day or two, and then people move on, and you don't hear another peep for three months. Whereas in sport, you're in the paper every single day, the decisions you make are raked over. It becomes quite personal, so you get quite a lot of personal attacks in the media, and in social media. The level of scrutiny, and the emotion that people bring to sport.
In B&Q, you're spending tens of millions of pounds a year to get people to notice you. And in the Welsh Rugby job, I'd have spent tens of millions just to be a bit anonymous for a day or two. It is very, very different, and people really care. It's very emotive. That rational leadership you can bring in a corporate doesn't really cut it in sport, so you have to adapt quite quickly.
Fiona: And is there quite a lot where because people care so much, and caring a lot about sport can be rational, but it can also be quite irrational in terms of people's responses. Did you find you had to almost build a resilience to it, and start ignoring what the media was saying, what social media was saying, because otherwise you wouldn't be able to get on with the day job?
Martyn: I knew the theory of ignoring it, but I never quite cracked that. And by that I mean I could have ignored it. Clearly, I'm in control of what I read, and what I look at and listen to. But I quickly realized that you do have to immerse yourself in the diversity of views and perspectives because, particularly with the media, I found it easier to read the narrative, even if it was unpleasant, because I knew then when I was in the media side, I would get asked, and to be oblivious to it, or to not understand the sort of richness of the different perspectives, puts you at a disadvantage. So it plays out today, in the role I'm in today on the rugby side, I've built an ability to do that. The bit I didn't crack was the ‘no escape thing’. It could be Christmas dinner with my parents, or playing golf with my friends, or sitting on a train. Everywhere you go, people would say, "Oh, you're the guy that works for the Welsh Rugby Union," and then they think they know how to do your job. I found it all-consuming in that sense.
Fiona: But despite that sort of scrutiny or maybe because of it, you were hugely successful in that role, and Wales went to number one in the world rankings, the team had an unbeaten run of 14 games, and this resulted in you being honored with an MBE. What was your reaction when you found out that that was coming?
Martyn: I really, genuinely thought it was a spoof. I thought, “which of my mates would be the architect of this?” I was looking for, “how do you get letterheaded paper from Buckingham Palace?” But literally over a period of a few days, I just thought maybe this is true. Then a second letter arrived, and you're thinking, “right, okay, this is beyond somebody now trying to spoof me”. So, it was a shock. I don't really think about it, if I'm honest. It's not a big deal for me. It was very nice, but I haven't thought about it for days and weeks, and then occasionally somebody will mention it to me. The bit I'm more proud of is how the business performed. We did well commercially. I'm certainly not sitting here claiming the credit for Wales becoming number one in the world. We'd never done it before, and it might be some time before we do it again.
But the bit I am proud of is the coach clearly is the main person who does that - Warren Gatland, who some people would know. When you get a role where, in effect, he reports to you is quite a big, back to that imposter syndrome. You start thinking, “blimey, I’ve got this pretty earthy, belligerent, tough, experienced coach that I'm now supposed to be leading, and the things he does or doesn't do has quite a big impact on our organisation”. The bit I'm most proud of is we built a very strong relationship. It was two-way, I didn't just let him get on with it. There are certain things he wasn't able to do because I wasn't supportive, which I don't think he'd necessarily had before. But I think we both have a real trust and respect over time, and we remain good friends. So that was a big challenge to get that relationship to work.
Fiona: And you're now also chair in Premiership Rugby. I suppose that experience from the Welsh Rugby Union, then Premiership Rugby - what has sport generally taught you about business, that you can apply whether it's within the sport world or outside of it?
Martyn: It's taught me a lot. It's a bit like the Wild West - it doesn't follow normal business approaches or rhythms, so you learn to deal with something that's relatively alien, I would say, to most business leaders. I wouldn't go into too much more detail on that, but it can get really lively. I've learned over time hopefully to be better at that, but I still make lots of mistakes.
If there was one thing that I think sport has got that business could really learn from is back to that performance piece and really around feedback. I have very low tolerance now for annual appraisals and all that form-filling rigmarole that goes on in business. When you see in sport and my sort of brief story on this is; if a game happens on a Saturday, on a Sunday the player will get a 20-minute video that's been put together about their involvement in that game. They analyse it themselves and they need to come in on Monday morning and say, "This is what I saw. This is where I performed. These are the areas I need to get better". They call them ‘work-ons’. The coach then will give them their view, they've got two or three days to make progress, and if they don't, they don't get picked on Thursday. Getting dropped is a very public thing so I would say that these sports people probably get more feedback in a week than the rest of us get in a year. It’s good quality feedback. It's constructive, it's straight, it makes people better. I just think in business, we're far too accommodating and sloppy really around performance, feedback and accountability.
Fiona: And it's something you hear a lot of businesses talk about, in terms of creating that feedback culture, giving instant feedback, not shying away from giving negative feedback, because actually it's what people often want. If they're doing something wrong, they want to be told about it. But the practicalities of actually making it happen seem to be ‘the jump’ that often is much trickier. Have you seen, especially post having that lesson from the sporting world, have you seen somewhere where that's kind of successfully applied? Or how would you advise businesses to bring that feedback culture to life in a more corporate setting?
Martyn: This is oversimplifying it, but if you're saying it's skill and will, I don't think it's a skill issue in corporate. There are more than enough good people around who know how to do it. They either individually choose not to, or the culture doesn't require it of them. It's just a matter of saying we are serious about this, and we're going to get really good at it, and we're going to do it. And the reality is, it's never as bad as people think. The organisation does build a tolerance for being very good at it. There are ways clearly to do it. So for me, it's always about being constructive. It's always about what support you put around people. It's always about follow up. But it's very, very doable. Organisations have just got to get serious about doing it.
Have I seen it? Yes, of course, in pockets. But nowhere near what it is in sport, or could be. And clearly, I've got to say this, haven't I? I've got my fingers in a few pies in the organisations I'm involved in and it's a really big thing for me. I work hard at bringing that but in a way that's right for that culture, and right for the individuals. Some people have got a tolerance for these sorts of conversations, and you can move quite quickly with them. Others, you need to be more nurturing and more sophisticated about how you do it, but you still have to do it.
Fiona: My last question around sport, and obviously you've mentioned you have built a really good relationship with Warren Gatland, so I hope this doesn't ruin it because it's a more controversial question. Who do you think has a tougher job - a CEO, or a rugby Head Coach?
Martyn: Definitely the Head Coach. Just for a start, people know who the coach is, and they don't know who the CEO is typically. If I said to you, who's the coach of Man United, you may or may not know, but it'd be very unlikely you know who the CEO was. I think the nature of their contracts are different in that, the CEO tends to be on a recurring contract, the coach is only ever on a two or three-year contract. So the sort of Sword of Damocles is always hanging over them. They live in the court of public opinion. Unfortunately, somebody sticks a microphone under your nose immediately after a game and you have to be able to front up and talk coherently about what may or may not have gone well, which is lightyears away from what a CEO has to deal with. I found the CEO job tough, but how on earth the head coach… They say you've got to have skin like a rhino to do that job, and I really believe you have.
Fiona: You mentioned no escape earlier, and sort of that increasing scrutiny, it sounds like, for a Head Coach, so there is absolutely no escape.
Martyn: I mean if you tried to find a parallel to corporate life, take your quarterly reporting, you know when it is, you know who's going to be there, you can probably predict the questions, you'll have an army of people supplying you with the answers and the data. I found those quarterly reporting sessions enormously challenging, but you have certain advantages, particularly around preparedness for them. You imagine somebody says to you, we're not going to show you the numbers, we're going to put them in front of your nose and then 10 minutes later we're going to put you in front of a roomful of people who are going to ask you a bunch of questions, and you've got no time to prepare. That's sort of the equivalent. It's tough.
Fiona: And everyone cares, like you say, a lot.
Martyn: Yes, Yes.
Fiona: Martyn there, providing fantastic insight into the realities of working in the sport sector, and what business leaders can learn from the rigorous feedback culture that coaches manage to create with their teams. In our next episode, I chat to Martyn about the next stage of his career, how he became a private equity chair, and what he believes makes for a successful Non-Exec.
Listen to the next episode here:
Podcast
30/01/2023
Fiona Moore
Read Time: Min
‘Building Successful Businesses’ EP:2 with Martyn Phillips MBE, Chair of Premiership Rugby
The MSP market has attracted significant M&A activity over recent years, with landmark deals completed and new pricing benchmarks set. So, in what continues to be a diverse and highly fragmented market, the key question is, how do you stand out from the crowd? You can’t be everything to everyone, but from an investor’s perspective these are some key value drivers that MSP CEOs might want to consider when setting the strategy and positioning of their business:
1. Customer set
Most MSPs provide services to a broad range of customer sizes, with it being rare to find businesses that only support SMEs, Mid-Market or Enterprise clients. However, it is increasingly common to see MSPs adopting a strategy of targeting bigger customers due to their more complex needs and larger technology budgets. To do this effectively the MSP must be able to offer a wide breadth and depth of services if the up-sell and cross-sell opportunity is to be realised.
The land and expand opportunity can be a compelling pitch to investors as it potentially underpins a strong growth thesis, with an MSP seeking to achieve greater penetration of its broad service portfolio with customers. It is important to balance this opportunity with the risk that comes with customer concentration. Investors like customer diversification (we can be a bit ‘cake and eat it’) as this reduces the reliance of an MSP on certain customers. It also means growth isn’t as reliant on landing a small number of ‘whale’ customers each year, which can lead to binary outcomes. Those targeting SMEs will typically benefit from very little customer concentration and customers that are more likely to outsource services. However, winning lots of small new SME logos in a year can be hard work, so it is important to have a strong sales engine and an operational model that can provide a high-quality service to smaller customers both efficiently and profitably.
2. Revenue types
A key focus in any investment process will be the revenue split between managed and professional services. Managed services provide a sticky, recurring revenue stream, which helps underpin a resilience case, a key focus for investors. However, the counter to this is that as the market has matured the margins associated with certain managed services have naturally reduced as they become more commoditised. Plus, there’s a debate about the long-term growth of certain managed services given the growing adoption of cloud-based solutions and SaaS, where support might for example be provided directly by a software vendor (e.g. Salesforce), rather than via an intermediary MSP.
This means that the majority of recent MSP growth has been driven by professional services, particularly those that help businesses digitally transform and continually optimise for the future. In our view, an optimal model is usually one that has a blend of both revenue streams as we believe that there can be a healthy symbiotic relationship between the two. Managed services can act as a lead generator for higher margin professional services (or vice versa), and certain managed services such as a cyber security managed detection and response service, can be attached to an initial professional services piece of work (e.g. remediation work from a malware attack on a customer).
3. Automation and efficiency
Many MSPs have invested significant amounts into the digital transformation of their own business. Automating manual tasks and pre-emptively driving efficiency across routine processes will help MSPs protect their margins. For example, by performing root cause analysis on a support ticket raised by a customer and proactively rolling out the fix to all customers, irrespective of whether they have suffered from the same issue. Similarly, those with well-established offshore resources may be able to demonstrate the efficiencies of their operational deliverability and give investors more conviction in potential scalability. This is something that is particularly pertinent in the inflationary and tight tech labour market that the UK is currently experiencing.
4. Highly valued services
Clients typically want an MSP to be a ‘one-stop shop’ that can satisfy their full needs, ranging from the provision of hardware to digital transformation. However, investors will want to see evidence that revenue streams are resilient, particularly in the face of increased cloud adoption. Private cloud hosting revenue remains high-margin but may be difficult to defend in the long-term with hyperscalers rapidly innovating their public cloud platforms and concerns around data security in the public cloud having been materially diluted over time. The rapid rise in energy costs has also led to data centres passing material price increases on to customers which is incentivising a move to the public cloud, albeit we acknowledge that such a transition is not appropriate in all situations and do expect private cloud to remain a feature of the market for some time to come.
Businesses should demonstrate how customer margin can be maintained, or even enhanced, as customers transition from older technologies to newer ones. Having access to high-growth and high margin areas such as cyber or data analytics will be seen as valuable.
5. Strong employee proposition
When ECI surveyed tech CEOs as part of our 2022 Growth Characteristics research, many of them flagged that finding the best talent was their biggest business concern. Talent shortages in tech have posed barriers to growth in the industry for a while, so investors will want to understand retention and recruitment capability. A strong employee proposition backed up by good KPIs around churn and employee engagement scores, will help to underpin any growth story.
6. Barriers to entry
Although AWS, Microsoft and GCP all continue to grow materially in the market, this represents more of a potential risk to Global System Integrators than MSPs. Hyperscalers don’t want to deal with a large number of non-enterprise businesses, so MSPs remain an important channel for them. Microsoft in particular continues to actively promote this relationship. For example, being a Microsoft Managed Partner can enhance an MSP’s position in the market, as it provides greater visibility over future product roadmap and can be a great source of leads. Any vertical focus can also provide credibility within subsectors and act as a barrier to entry.
7. M&A track record
As mentioned, the MSP market remains fragmented, which means that consolidation is fairly common. That may be a general buy-and-build strategy, or just certain strategic acquisitions within key capability areas to solve for skills shortages. From an investor’s point of view, if a management team can demonstrate a great acquisition roadmap and experience in integrating and driving revenue and cost synergies, that will give fantastic conviction in M&A as a value enhancer going forwards.
8. Potential acquirers
An MSP that can demonstrate strong growth and a loyal customer base will attract interest from multiple acquirers. Trade, PE-backed trade and private equity have all been extremely active in the market, due to high growth and strong resilience. Investors are likely to have one eye on the next acquirer at the time of the investment, so may consider how the customer base, range of services and the nature of the revenue model will dictate where buyer interest is likely to come from. Several PE-backed platforms have been established which are expected to continue driving market consolidation.
In summary, we believe that the MSP market is an exciting place to be and one where there remain many opportunities to achieve exceptional growth. There are things to consider, as outlined above, but if a business can position itself well, there are plenty of well-funded buyers, including ECI, who are prepared to pay up for the best businesses.
If you’d like to discuss your MSP business or how we’ve helped MSPs to scale in the past, please reach out.
Insights
30/01/2023
Mark Keeley
Read Time: Min
8 ways to increase the value of your MSP
Ciphr, the UK’s leading SaaS HR software provider, has appointed Sion Lewis as its new CEO. He joins the group with immediate effect, bringing with him considerable leadership and management experience in growing successful SaaS businesses. Lewis succeeds Chris Berry, Ciphr’s founder, who has moved into a non-executive role on the board, after over 30 years as CEO.
Lewis most recently served as general manager of EMEA at GoTo, the all-in-one business communications and IT support specialists, where he helped inform international strategy and build and expand on the brand’s European presence. Prior to that, he was CEO of IRIS Software’s accountancy and education divisions, growing revenue by over 150%. He has also held senior roles with BMC and Salesforce.com.
News
26/01/2023
Read Time: 1 Min
Ciphr welcomes Sion Lewis as new CEO
How important is ESG to CEOs? The majority of CEOs (74%) in the UK now believe that ESG is equally as important as financial performance, according to new research from ECI’s Growth Characteristics report. Although it may once have been considered a ‘nice to have’, both ESG and social purpose are now key to informing business strategies in 2023 and beyond.
The research, which saw responses from over 500 CEOs in the UK, has also found that social purpose has significantly progressed up leaders’ agendas since last year’s survey. Now, only 2% say it doesn’t inform their strategy at all, down from 15% last year.
Different sectors have also shown different priority levels when it comes to ESG. In the top spot, 78% of Financial Services firms stated that ESG was as important as financial performance.
Regulators across the UK, EU and beyond have recognised the important role the Financial Services industry plays as a lever for sustainable change around decarbonisation across portfolios, investing in ‘greener’ businesses and funding the overall energy transition.
Insights
23/01/2023
Read Time: 1 Min
ESG as important as financial performance according to 74% of CEOs in the UK
With cybercrime forecast to increase exponentially in coming years, businesses need to adopt the mindset of ‘when and not if’ on cyber-attacks. Small to medium-sized businesses are seeing more frequent, targeted and complex attacks, yet only 14% are prepared to defend themselves.
Cyber experts claim you have one critical hour after discovery of a breach, which will vastly impact damage. Given that damage can have an impact on reputation, revenue, fines, client relationships, and even the mental health of employees, that plan is crucial. So, what does your company need to do to be prepared for that first hour?
1. Incident management plan
The success of the first hour will come down to the incident response/management plan you have in place. Pulling one together on the fly after an attack will be too late as you’ll immediately be on the back foot. An incident management plan should include:
- Key contacts for who needs to know what when, including the escalation criteria
- A flowchart for the processes to follow dependent on type of breach, data affected etc
- Guidance on any legal or regulatory requirements
Having this documented will be a very welcome tool to turn to and will form a crucial part of your company’s business continuity plan. It also enables you to practice your incident response so it is fine-tuned and ready to go and can also underpin training. As that first hour of attack is so crucial, ensuring you’re primed is important. Being proactive rather than reactive will drive this, which is why at ECI we recommend businesses do…
2. Roleplay and scenario planning
The ultimate responsibility in the event of a cyber breach falls on the Board. Are they ready? Doing tabletop experiences can make sure they are, simulating a breach and practising the responses. It means that the plan you’ve established can be tested and feels familiar if it's needed.
In a breach, the Board will need to make hard decisions, for example on revenue vs reputation. It is difficult to make those decisions under stress. Without practice, the likelihood of making the wrong decision is high, which can have catastrophic consequences on the business.
3. Technical team prep
Unsurprisingly your technical team are key early on in an attack. A few key questions you’ll want to know from them:
- Can they isolate systems to stop the breach spreading?
- Are they able to monitor and restore the data?
- Do they have a critical asset register in place?
Knowing this will have a big impact on the actions you are able and willing to take. An understanding of personnel is key. What happens if the CTO or CISO is on holiday? Do they have a ransomware/incident response specialist on speed-dial that they can lean on for support and threat intelligence? And when do you call your insurance provider? They can often help triage the problem for you, working together with the internal IT team.
4. Good comms processes and governance
Once a breach is contained, the next immediate question is who needs to know. The answer will always depend on the breach itself, but a good understanding of who might need to know and how they will be informed is best prepared ahead of time. Are you able to easily tell customers and suppliers, and what might that look like? How and what do you tell your staff? Do you need to put out a statement? If there is a chance you might, it can be beneficial to understand who would be used in case of reputational risk, whether that’s an existing PR agency, someone you have to hand in case of crisis, or even whether you can utilise your investor’s agency. You can even set up a boilerplate template to have to hand if needed. Lastly, having a specialist legal/cyber counsel in place may be helpful, or more importantly, if you think it might be, it’s best to find them ahead of time.
5. Lessons learnt
Well done, you’ve survived the first hour of a cyber breach! Now what? If you are hit with a cyber-attack, there will be great apprehension that it could happen again. That means you are in a great place to create the right feedback loop to try and ensure it doesn’t. And, if it does, you should now be much better prepared to handle it.
Insights
23/01/2023
Ash Patel,
Sarthak Sawlani
Read Time: Min
Is your company prepared for a cyber breach?
David Ewing recently spoke to Real Deals about the market outlook for 2023 and what it means for ECI's investment and exit pipeline.
David and Xhulio Ismalaj discussed how we are currently in a fairly new macroeconomic environment and what that may mean for the M&A market. He comments, "The large-cap market slowed ahead of the mid-cap market, so I'd expect to see a slightly quieter 2023."
However, he also commented that from ECI's perspective, while multiples may come off by a little bit it's unlikely to come off by much, and the way that ECI think about growth means that the macro-environment isn't the most important driver for success. He comments, "Typically we're growing our portfolio companies by about 25% per annum. Whether the economy is at a plus two or a minus two, it doesn't really matter that much to the performance of the portfolio companies. Whether it's 23% or 27%, there's still healthy growth across the portfolio. We would expect the portfolio to continue to grow during a change in the economic cycle and that is what is bearing out."
David and Xhulio also discuss ECI's investment and exit pipeline and expectations for 2023. Visit the full article to find out more!
Insights
18/01/2023
David Ewing
Read Time: 2 Min
David Ewing’s outlook for the 2023 M&A market
TOPICS:
David Ewing
2022 was a strong year for the travel sector. Despite early Omicron concerns, significant post-Covid pent-up demand meant bookings boomed across the year. George Moss looks at how this will continue in his 2023 predictions for the travel sector, considering the impact of cost of living and climate on consumer choice.
1. Demand returns to normal
“We expect to see normalised demand for travel in 2023. 2022 saw what was likely to be excessive demand for outbound travel due to holidays taking place that had been on hold due to the pandemic. We also saw consumers eager to spend some of what they had saved during Covid on exploring a newly opened-up world. This, alongside the cost-of-living increase, means that it is likely that this demand will slightly soften in the new year, especially if fuel prices stay high. However, I don’t expect that the softening will be significant – for a large portion of the population, even if they take fewer additional breaks, people are very protective of keeping their main holiday and are still keen to travel internationally post the pandemic.”
2. Travel tech increasingly important
“Consumer behaviour when it comes to booking holidays is ever evolving. 1/3 of holidays are now booked on mobile, but most customers use cross-device and multiple websites to decide on their plans. Abandonment rates are very high for travel shopping, with 91% of mobile customers abandoning their selected trip as they browse elsewhere, potentially leaving your sale behind.
What that means is that to create a seamless customer experience in the buying process, you need to ensure you have the technology that allows your sales funnel to cover multiple sources, channels and devices. And the experience only starts with the purchase. Over the pandemic, travellers increasingly became used to checking in, ordering services and giving feedback without ever speaking to a human. Operators will need better cloud-based technologies to solve this and create excellent virtual experiences.
Similarly, there will be a drive for efficiency from operators, given the difficulties of hiring in the travel and leisure sector post-pandemic. That means more use of better-integrated tech to solve for and manage the complex products on offer, whether it's aeroplane seats, self-catering cottages or hotel rooms and ensure a seamless customer experience from booking through to departure or occupancy.
There’s also a need for technology to enable operators to provide this service with fewer staff and less training in an environment where recruitment has been challenging. Software that is well integrated across systems, intuitive for new users and that has limited need for training is likely to facilitate growing businesses in getting their teams up to speed more quickly and to required levels of customer service.”
3. Conversational AI in the travel sector
“As mentioned, post-Covid and post-Brexit, there has been a significant shortage of staff in the travel sector, leading to operators needing to drive efficiencies through technology as much as possible. Chatbots and conversational AI has long been seen as a potential solution to improve customer service, without the need for customers to be stuck on hold for long periods. 64% of people expect a real-time response from travel companies, but currently, 48% of customer enquiries to leading UK travel companies are receiving no response whatsoever according to research by CM.com. Bots could therefore provide a good solution, but to date, the tech has never quite been good enough for this to feel any better than a second-best option. Many companies use chatbots to offer simplistic routes to booking or as a FAQ search engine, but they are not conversational and consumers know they are chatting with a bot.
In 2023, the possibility for evolution in this space has opened up. There have been significant strides forward in conversational AI technology, notably OpenAI’s Chat GPT engine. This chatbot doesn’t just look for keywords and respond with a fixed database of answers. It generates something different depending on the question, it sounds human and it can fix its own errors if you point them out. Not only can it provide you with pertinent information, but it can also go above and beyond, writing you an itinerary for the area that’s relevant to your interests.
We’re in the early days here, and this generative AI technology that can create original content isn’t yet widely used by companies in the sector. However, the possibilities for the adoption of the tech are an exciting development for the sector that I predict will begin to be rolled out in 2023.”
4. Eco-travel finally makes an impact
“After years of talking about eco-travel, I am optimistic that 2023 may be the year that demand starts to really shift. The nature of concern around the environment means there is sadly never likely to be a single catalyst for that change, but rising concerns supported by government commitments mean we’d hope to see changing demand in 2023. I expect there will be a combination of people looking to reduce costs and reduce carbon footprint, which will drive demand for alternative transport such as trains and ferries. Similarly, you will see more OTAs offer off-setting alongside booking, yet this will be carefully scrutinised by consumers who will be wary of greenwashing.”
5. Staycation v overseas travel
“During the pandemic, many people realised how many amazing destinations we have on our own doorsteps, leading to a long-term boost for staycations. Furthermore, even when the rest of the world opened up post-pandemic, many people still opted to holiday closer to home. Travel disruption due to uncertainty about restrictions and shortages in airport staff - which led to half-term chaos last spring - led to many people seeing outbound travelling as frankly too much hassle. Continuing strike action in the UK and in Europe and higher air travel costs off the back of fuel inflation won’t do much to discredit this view in the near term. With more people looking for cheaper travel options, I expect that there will be continued strong demand for domestic travel in 2023.”
6. Experiential travel
“Despite the likely strength of demand for staycations in 2023, I expect you will also see a rise in popularity for bucket list holidays in the new year. Many people have missed out on years of travelling and will be looking to make up for lost time by ticking those items off, especially within the grey pound cohort. Travel Weekly highlighted that 58% of travellers want to seek ‘out of comfort zone’ holidays in 2023.
Covid gave many people a new perspective as to what they wanted from life and having missed so many experiences in the last two years, I’d expect lots of consumers to be focusing on trying to tick off some of these in 2023. However, with the same research showing that 60% plan to budget more tightly around holidays, it will be providers that can offer smart deals or ‘bucket list on a budget’ that will likely win here.”
Insights
16/01/2023
George Moss
Read Time: Min
Predictions for the travel sector in 2023
We're pleased to have kicked off 2023 with two promotions across our Investment and Origination Teams.
Faye Maughan has been promoted to Investment Director within ECI’s Investment Team. Faye has been instrumental to a number of successful exits across 2022 including Imagesound and Clear Group. Notably Faye worked closely with Clear Group’s management team to support them to deliver an ambitious buy and build strategy, resulting in the business completing 10 acquisitions and doubling in size during ECI’s investment. Faye was also part of the deal team leading the investment in energy and sustainability services provider, Zenergi, in February 2022.
Skyler ver Bruggen has been promoted to Investment Director within the Origination Team. As well as working on potential new investments for ECI in subsectors such as insurance, Skyler is responsible for M&A across the portfolio. Here she works with portfolio management teams to help refine M&A strategy, source targets and develop an M&A function in-house. In particular, Skyler worked with the management team at Clear Group and she currently supports a number of ECI’s portfolio on M&A including Ciphr, BCN Group and Moneypenny. Skyler is also a member of ECI’s ESG Committee.
News
11/01/2023
Read Time: 1 Min
ECI announces two promotions for 2023
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