Investing can be like going on an adventure holiday; you know where you want to get to, but success depends on finding the best route to your destination. That was certainly the case when we invested in Riviera Travel, the British market leader for escorted tours and European river cruises.
At the time we backed Riviera in 2014, the business was growing rapidly, but was little known among the public at large. The majority of the travel company’s sales were derived via partnerships with national newspapers – holidays were run by Riviera but were sold to consumers under the newspaper’s brand.
As Riviera’s chief executive officer David Clemson puts it, changes in the newspaper industry presented a big opportunity for the holiday company to become a better-known brand in its own right. “We could see clearly from the data that not enough new customers were being fed into the business, into the customer database, so we realised from the start of the investment that we had to branch out into different distribution channels,”. Riviera needed to migrate from powering other people’s brands to becoming a big name in its own right.
We knew this would be a tall order in a competitive market dominated by long-standing brands with a strong resonance with consumers. Riviera was starting from a low base of awareness among its target audience – just 15% of people over 50, who form the majority of its core customer base, said they had heard of Riviera when asked.
The first thing we did, in partnership with management, was to recognise that Riviera didn’t have all the requisite skills for an extensive brand-building exercise in-house. This meant the team had to recruit specialists to handle everything from communications to database management. This even extended to the choice of a new chairman – Simon McMurtrie – who had previously taken another newspaper, white-label product down the direct-to-consumer route.
One way to build the Riviera brand was to advertise on television, which the company had never done previously. The team had to learn to be patient for the campaign to pay off. David says: “The issue with television advertising is that the results are hard to measure, and it takes a while for the benefits to start coming through,”. “We had to hold our nerve – because of the cycle of purchasing holidays, people tend to buy once every 12 months at best, so it can be some time before the results are seen.” The team’s patience was rewarded. Within 18 months, the company enjoyed a significant increase in the number of new customers who became aware of Riviera, who enquired about holidays, who considered the proposition and, crucially, who went on to buy.
Although the television campaign was the most high-profile manifestation of the brand-building programme, it was supplemented with direct, digital and social media marketing. The percentage of business coming direct grew significantly under Phoenix’s three-year period of ownership, with direct to brand becoming the largest sales channel, while brand awareness tripled to 45%.
The strength of the Riviera brand is borne out by the financials – EBITDA climbed from £13m to almost £23m across the life of the investment. But perhaps the most satisfying vindication of Riviera’s fresh approach was being awarded the Which? Brand of the Year 2017 in the Travel category, where it nestled alongside other category winners such as Apple, Marks & Spencer, Samsung and Miele.