Secret Escapes CEO Alex Saint says its purchase this week of Czech competitor Slevomat Group builds on its “nicely profitable” Polish business and create “positive product synergies” across the group from the start.

Saint told tnooz that Poland is its third largest market after the UK and Germany. It started in Poland via its acquisition of Travelist in 2014 and used it as a springboard to enter other central European markets – Hungary, Slovakia and the Czech Republic.

“We have been competing with Slevomat for nine months or so. They are a powerful e-commerce brand in the region and there are lots of compelling cross-sell opportunities across the Secret Escapes group”.

As an example, he said that Slevomat focuses mainly on domestic hotels in the Czech Republic, “but we know that large numbers of people from the Czech Republic travel internationally with the main destination Croatia. So that gives us the impetus to contract hotels there at the appropriate price point. We can also cross-sell inventory from across the group which will work for these source markets.”

Slevomat currently sells products such as clothing which fall outside Secret Escapes’ travel and leisure remit. Saint said that it would “rationalise” what Slevomat sells over time while keeping lower price point lines such as spa days to retain customers and attract new ones.

Platform announcement

The Slevomat Group was founded in 2010 and runs Slevomat.cz, Zlavomat.sk and Skrz.cz. It has 1.3 million customers and is on track to generate turnover close to €100m this year. The brands and their structure will be retained, although Saint is looking to bring all the group businesses onto the same platform.

“We now have three platforms in the group and the long-term plan is to bring all the data, back-end and supply onto a single system, but we like having different front-ends for different points of sale so we can be flexible to local needs”.

As well as growing its new businesses by adding and cross-selling inventory, there will be knowledge-sharing as well, “in areas where we are strong and they haven’t really explored yet such as TV advertising and CRM”.

Mind the gap

With Poland on its own already Secret Escapes’ third biggest market, central Europe as a whole will only get more important for the group. Saint thinks that the region is “undervalued” and while the global giants of online travel are present, “they do not seem to allocate a lot of resources here so there is a chance for local players to flourish”

He also believes that Secret Escapes and its flash deals model is not only viable in the current hotel distribution landscape but also actively welcomed by hoteliers who see it as a chance to attract “truly incremental business”.

He explained:

“Unlike the OTAs and metas, we are a push marketing channel for hotels. Our research shows that 90% of our users would not have booked the trip if we hadn’t pushed the offer to them, so for hoteliers there is little chance of them cannibalising their existing business.

“We realise that hotels want to cut out intermediaries but at the same time they value our role in promoting exclusive offers to a discrete and specific user base. They seem to see us differently from other intermediaries.”

The total package

The official announcement of the Slevomat deal referenced Secret Escapes’ “game-changing technology, such as dynamic packaging, which has recently launched on Secret Escapes’ UK site.” Saint explained that the option to book a hotel with or without a flight was trialling on short-haul European routes and that take up of the flight component has been positive and resulted in a lift in conversions.

It uses Intuitive as its packaging engine. with flights from Ypsilon and Gold Medal feeds combined with its own contracted hotels. The packages are fulfilled on the Secret Escapes site. Its UK ATOL – a regulatory requirement for any business selling a flight + hotel in a single transaction – currently allows it to sell just over 10,000 packages a year.

Related reading from tnooz:
Secret Escapes raises $60 million from Google Ventures and others (July15)