Late Rooms chief checks into global hotel surge
A website listing 44,000 hotels has been a surprise hit. James Thompson reports
Saturday 20 November 2010
Andrew Pumphrey, the managing director of the discount hotel website LateRooms.com, is well placed to see what consumers from the British to Chinese want from a hotel these days. And it seems the British are increasingly looking for a bit of adventure, illustrated by around 100 people having stayed in the West Usk Lighthouse, near Newport, this year.
Mr Pumphrey, who became managing director of Late Rooms this year, says: "I think that people's lives can be quite mundane with the day-to-day of the job so they want something a bit different and a bit more challenging when they are on holiday.
"It is not just about staying in a hotel room – it is about what they do when they are in an area and that is as important as anything else."
Lighthouses, however, are a fraction of the 44,000 hotels in 126 countries operated by Late Rooms, which is part of the Tui Travel empire that includes First Choice and Thomson Holidays. First Choice saw enough potential in Late Rooms to fork out £108m for the business in December 2006, before its merger with Tui a few months later. Skip forward to today and Mr Pumphrey still sees plenty of opportunity both in the UK and overseas to grow Late Rooms, which delivered £8.7m pre-tax profits on total sales of £236m for the year to 30 September 2009, according to its latest accounts.
He says: "It is a big business that is extremely growing fast and we see huge potential globally."
The breadth of the hotels offered by Late Rooms is vast. It covers brands from Hilton, the Savoy and Millennium and Copthorne hotels, with prices ranging from up to £600 a night at a hotel in Dubai to £10 for a room in Thailand. It takes a room booking every six seconds.
Furthermore, in terms of people who have heard of, or have booked with Late Rooms, awareness remains modest in the UK and tiny in Asia. The UK accounts for about 70 per cent of the six million non-unique visitors to its website each month. Of the wider population only 60 per cent have heard of Late Rooms.
In fact, it is in Asia, where Late Rooms offers almost 12,000 hotels, that Mr Pumphrey sees the biggest scope to grow the brand.
"In Asia, only about 10 per cent of people have heard of us – just think, that is 90 per cent of people who actually are potential customers for us," he says.
Mr Pumphrey adds: "Asia is a huge opportunity and with big opportunity come big challenges. Obviously, China is a huge market but it has all sorts of challenges that go with it. It is not a straightforward market to get into." The challenges that China, where Late Rooms has 747 hotels, presents are linked to political, ownership and partnership issues, he says.
Globally, Late Rooms – which has five dedicated local websites in English, Spanish, French, Italian and German – plans to introduce a Dutch language site, but then it will follow this with "several Asian" languages, thought to include Chinese and Thai.
"We have the intention to roll out into considerably more countries in the very near future. Our vision is to be the world's greatest hotel booking website by having an entrepreneurial spirit and dynamism behind it.
"So ultimately to build the number of hotels, the destinations and the number of languages and localise them." Mr Pumphrey, 45, admits that in the early days of Late Rooms – which was founded in 1999 as a directory and started taking hotel bookings in 2002 – some of its translation into foreign languages was rudimentary. But now it has trained and qualified translators, as well as "user experience" and marketing staff for each country.
What a company such as Late Rooms – which competes with the likes of Lastminute.com and Expedia – cannot control are literally seismic events such as the Icelandic ash cloud disruption this spring.
While Mr Pumphrey says the impact of the ash cloud was "minimal" on its sales overall, it brought both opportunities and drawbacks. He said: "There was an increase in peo
ple who were stranded who were using Late Rooms ultimately as a distressed channel to book into Heathrow hotels and hotels in London. And obviously, we saw some quite good availability from hotels because they had to fill rooms that were no longer full.
"The negative effect was that it stopped people planning for travel as much as we would have liked them with their short break abroad because they were not sure for how long the disruption was going to go on." For all together different reasons, this summer's football World Cup in South Africa also altered booking patterns in the UK.
Mr Pumphrey, who joined Late Rooms as head of consumer marketing five years ago, says: "People don't go away as much around the World Cup – they were waiting to see when England would be knocked out.
"You definitely see an immediate uplift in bookings the moment that happens because people can they make their plans and get away."
Despite these disruptions, Late Rooms appears to be growing at a fair rate of knots, although the company did not provide financial data for this year. But it is thought that underlying profits, which came in at about £17m in 2008/09, are significant ahead this financial year.
He says this year has been "very strong" from a bookings point of view. However, in the UK, London has outperformed the provinces, boosted by events such as the Pope's visit to the capital and wider tourism. "A lot of London hoteliers were saying they had hit their full year targets by July," says Mr Pumphrey, but trade has dropped off a bit in the last two weeks.
Overall, he says: "We are seeing some pressure on rates but the compensation in terms of bookings more than accounts for the reduction in rates." If UK consumers find their spend under further pressure next year, Late Rooms as a discount operator seems well placed to benefit.
Mr Pumphrey says: "The business user is very price conscious, as is the leisure user, but we are finding that because there is greater availability and as prices are very competitive people are spending more time going away at the weekend and giving themselves small treats."
Even lighthouse hotels seem in vogue in price-conscious Britain.
From wine to hotels
Going up ... He first checked into the corporate world at Greenalls Cellars, the wine and food group, in 1992. There, Mr Pumphrey helped to build the Wine Cellar website and became marketing manager for the company's Red Rose Inns. In 2000, he took up residence at Corus Hotels, where his last role was national marketing manager. Late Rooms booked him in 2005, first as head of consumer marketing and managing director this year.
Trouts and Stieg Larsson North Wales is where Mr Pumphrey likes to go salmon and trout fishing, run and enjoy his love of the great outdoors with his wife and two children. He also likes to play "very amateur county tennis" for Shropshire. His life has recently been transformed by taking the train to Late Rooms' head office in Manchester, instead of driving. He has just finished the last of the Stieg Larsson books.
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