THE FABULOUS WARNER BOYS

THE FABULOUS WARNER BOYS - The shirts worn by their reps may be flowery, but the founders of upmarket package holiday pioneers Mark Warner are distinctly hard-headed. While rivals struggle, MW's sun keeps shining: its ad campaigns are minimal, its celeb-c

by MATTHEW GWYTHER
Last Updated: 31 Aug 2010

The shirts worn by their reps may be flowery, but the founders of upmarket package holiday pioneers Mark Warner are distinctly hard-headed. While rivals struggle, MW's sun keeps shining: its ad campaigns are minimal, its celeb-clientele faithful, and its profit margins dwarf the travel industry average. How do they do it? Matthew Gwyther finds out

As the nation that invented package holidays, the British spend a lot of time whingeing about them. Whether it be fretting that the food is too adventurous, the lager too weak, that there's 'a lizard in the bidet' or simply that they've been beaten to the poolside loungers by their fellow Europeans, Brits certainly know how to moan while abroad.

The UK package holiday industry would love to live off repeat business but is forced to spend vast sums on marketing to attract trade in the first place. Then, each summer, margins are slashed in a last-minute price-cutting frenzy. The big travel companies struggle to create desirable brands but, if quizzed, delayed and disgruntled punters often aren't sure whether they're jetting off with Going Places, Lunn Poly or YugoTours.

On a Mark Warner holiday, however, it would seem that the odd grumble is drowned out by sighs of contentment, for, in contrast with other mainstream operators, Mark Warner has a repeat business/direct recommendation rate of 75% - almost unheard of.

MW customers know exactly what they're buying into - an up-market, all-inclusive, activity-based 'club' of a rather more sophisticated variety than the liquid, late-night hedonism of 18/30. There are Mark Warner junkies who have been to all nine of the operator's summer resorts and can go on about how the swell at Altinel in Turkey affects the water skiing or how the softness of the astroturf tennis courts at Lemnos, Greece, helps dodgy knees. They're not customers, they're disciples. (One such follower, Sara Campbell, a 28-year-old PR executive, expressed regret to MT that MW was now doing visible advertising: 'I feel so protective about my little holiday,' she moaned. 'I don't want the wrong people to know about it.')

Such levels of devotion mean, for example, that the whole of its winter ski programme - 15,000 guests bringing in pounds 25 million - is sold with an advertising budget of pounds 50,000. This may be hardly enough to buy a fur coat and a round of drinks in St Moritz, but that small outlay achieved a 97% occupancy rate last season.

So who is Mark Warner? A Brit-based relative of the US entertainment clan? Or, as per the rumour, a reclusive Greek? Well, neither of these.

Actually, MW himself doesn't exist - the Warner part was a step-parent's surname. Mark Warner was founded some 27 years ago in a small chalet in Verbier by Mark Chitty and Andy Searle. The pair had been at school together in Sussex and Searle's late father had created MFI. Both were relatively clueless business studies students in 1974 but knew they preferred the piste to the lecture hall. It didn't take a genius to establish that telling your mates you'd just been on a 'Chitty holiday' wouldn't drum up much business, so Mark Warner it became.

In their first year they attracted 500 guests to the Alps and made no money. (Chitty says they made no real profits until year 16; Searle's deep pockets kept them going.) But they were thoughtful and determined, and they listened to their customers' desires. In the late 1970s they were the first company to introduce 'ski hosting', in which guests ski as a group under the guidance of a host. In 1982 they added their first summer venues, beginning in Corfu. The winter idea of a relaxed and convivial but not too boisterous party atmosphere prevailed.

Things really started progressing in the mid-80s, when they introduced their now award-winning Kids' Clubs, which took children off the hands of their long-suffering parents for part of the day. 'I suppose the way we developed the business matched what we were up to personally,' says Chitty, 'going from singles to being couples, to having families and kids. We knew we were taking more and more families and needed to do something for them.'

The operator's attraction to families with small children is immense and this summer MW is employing a total of 223 nannies across its resorts.

Families make up 60% of the clientele and MW has become highly popular with divorced and single parents, for whom looking after small children alone can prove trying. As a MW nanny, you'll get free flights, three free meals a day and half-price bar drinks, but you won't get rich. Last year they were paying qualified NNEBs pounds 100 a week. (Chitty and Searle now have a total of seven children between them but, sensibly, they take their holidays elsewhere.) You start humble, but then a lot of MW's senior talent began at the bottom.

For example, Nigel Ragg, the group marketing manager, came as a ski guide in 1981, went away to found his own business, sold it and then returned in the late '90s.

The client total is expected to top 50,000 in 2001, and MW makes a margin of about 10% net before tax, compared with an industry norm of 1% to 3%.

With so much included in the basic price, these holidays do not come cheap. One father wrote MW out a cheque for pounds 22,000 to cover the six weeks that his family of four stayed in the Punta Licosa resort south of Naples last year. And there's no shortage of celebs eager to wield the plastic for the MW fortnight. Recent guests include Dawn French, Ian Hislop, Harriet Harman, Jo Wiley, Martin Bashir and Patsy Palmer.

Its clients are hardly classic package fodder. They are almost totally ABC1 and mostly in the 30 to 45 age bracket, 76% coming from professional backgrounds in southern England, often with a combined household income 'north of pounds 100,000', according to Chitty. These types spend freely in the bars and beauty parlours - one of the few things that costs real money on a MW holiday.

This is not, however, to say that singles are neglected. There's no question that the germ for what Mark Warner has now become can be found in its French competitor Club Med, the singles destination par excellence. The all-inclusive, activity-based Club Med holiday was pioneered by Serge Trigano in Majorca in 1950. Trigano died in February this year at the age of 80. No less a figure than the French prime minister Lionel Jospin marked his passing by saying 'he was an innovative and dynamic entrepreneur who contributed enormously to the democratization of leisure'.

Club Med was once the last word in holiday chic as the 'gentle members' got into their hearty activities while paying for their drinks with strings of beads. Money was too brash and vulgar a commodity to have knocking about these sandy paradises. Club Med became known as a reliable provider of the three 'S's - 'sun, sex and sand'. Indeed, some of its Caribbean resorts, especially Martinique, were thought to major rather too much on the middle 's'. 'Throughout the States, that resort was known as the place where you went to get shagged,' says Chitty. This is not to say that male/female coupling is discouraged at MW. On the notice board of the tele-sales floor at the Kensington HQ is a column titled 'pulling chance' next to each resort's name. The more babies on site, the lower the score.

However, as Mark Warner's star has risen so the outlook for Club Med has become more cloudy. Despite the arrival of Euro Disney whiz Philippe Bourguignon four years ago, Club Med has had to issue a brace of profit warnings as it tries to recreate itself as a broader-based leisure group.

Club Med is, of course, much bigger than Mark Warner, having 109 resorts in 40 countries compared with the British firm's 25 resorts in five countries.

'What's interesting for us, though, is that our brand is far bigger than the company,' says Chitty. 'The future potential for Mark Warner is much larger than we are today.'

MW gets a steady stream of offers from large tour operators and came very close to agreeing terms to sell the company about two years ago.

It got a long way down the line with Thomas Cook, which owns Club 18/30.

The founding pair were near to pocketing 'not far off pounds 50 million' when the suitors were themselves part-bought by the German giant Preussag; that scuppered the deal. 'It put us right off, and it put them off,' says Chitty.

Despite having virtually doubled its turnover in the past four years, MW is fairly cautious when it comes to expansion. It passed up on the North American skiing market and so avoided getting powder-burned, as many rival operators did, with Brits declining a 10-hour flight to get a week on the slopes. Its two new departures from the core brand are the acquisition of the Pizza Express franchise for France and running bars and restaurants in the Alps. The French have been slow to take the Veneziana, the Four Seasons and the chocolate fudge cake to their hearts, but it can only be a matter of time.

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