"If you’re still trying to do things the way you did them before Covid-19, you’ll be on the losing side soon."
For our first edition, we had the pleasure to invite Pasi Latva, CEO of Elämys Group and discuss about the vision of the company and how the strategy has changed during the last year.
We have all heard that the Chinese use the same word to describe the concepts of crisis and opportunity. What they mean to say is that in every crisis lies an opportunity, depending on how it is looked at. In case of Elamys, the opportunity was represented by an accelerated growth program that translated into purchasing Matka-Agentit Ltd, establishing a new unit called Elämys Tech, one called Elämys Cruises, and being appointed as the exclusive ticket reseller in Ireland for the Tokyo Summer Olympic Games.
Let’s discuss about Elämys. If you would pitch Elämys company, what would be your pitch? How are you different? How are you unique from your competitors?
Pasi Latva: We consider ourselves a new generation experience company. We are generating experiences. That’s what Elämys means in Finnish – Experience. We don’t consider ourselves only a travel company, but an experience company, because people do crave for experiences. People were ready to spend money on them pre-Covid times and they will do the same after the Covid times too.
How are we different from traditional travel companies is that we have focused on multiple sectors within the travel and the events business, so we have our special units inside our group of companies whose expertise is in ski or other sports, leisure for example, the best specialists from a certain area of travel and allocate them to that business line. We have our engine, the Elämys Hub, where we have a lot of travel professionals: event organizer specialists or marketing teams that support all these specialized companies. So even though a niche sector itself can be quite small, it will have the benefits of a bigger company because it has access to the efficient marketing, finance and production teams from the Elämys Hub.
If we are talking about travel business, even though you are specialized in sports or disabled travelling, there are the same components involved: you need to move from one place to another, either by plane, train or car, you need to stay somewhere, so we’re talking about a hotel accommodation, and you want to experience something. The basic ingredients are the same. That is why our engine can process these elements and our specialists have more time to design new trips and serve the clients with their expertise. And that’s the travel side of the business.
Then we also have the events side of the business. If the same people or companies use our services to travel abroad, they’re also willing to do something here in Finland, for example. Whether they arrange/attend corporate events or go to a concert in Finland, we want to keep those clients with us, so we’re able to serve them when they go to that U2 concert. We offer an overall experience no matter the purpose of travel, no matter if it happens in Finland or abroad, no matter if they do it as a private person or as a company, we are here for them. We are a one stop shop. This would be the best way to describe it: a one stop shop.
We are mainly active in niche segments, reason for that being that if you compete in beach holidays, let’s say, you will see a lot of volume, but very small margins. But when you compete in a niche business, you have higher margins, even though there are smaller volumes. But when you have more business units, then you will have a higher volume and also a higher margin. We have a dedicated team for each business line that will serve the business in that segment. On the other hand, from a global view of the hub, you will be able to manage and share the experience between business lines and all the other components that are on the production side, on the marketing side, or the sales side and so on.
This brings dcs plus in the picture. We believe that, with the dcs platforms, we can distribute the same high-level experience to the other markets. For example, we have a unit in Ireland so when we do one formal production in Finland for the Finnish customers, we can use that same production for the Irish customers. We just change the flights and the language. And so, even though we have fewer people working in Ireland, they will have the expertise of the - let’s say Formula 1 and motorsports - experts in Finland. So, they can also provide the same high-level customer.
There is nothing new in this because all the big travel companies do that, but they do it with high volume products, with beach holidays as per the above example, but we are taking the step into a deeper end, trying to serve all the markets with more complicated products where the big travel companies do not enter. For example, when TUI bought some specialized companies, those companies have stayed specialized companies for 2 or 3 years, eventually being shut down or their volumes having decreased. This happened because they tried to place the specialists into the same format the big company processes required them to fit into. But we are building our processes from the specialist point of view. We want to give a free hand to the artists, and we try to serve them from our hub.
Let’s get back in time! March 2020, we can make a clear statement that no one was prepared or expected for what was coming! Every business had to take some decisions and recalibrate the resources, shift the plans! How did you shift your action plan for 2020? What were the main actions taken in the first couple of months?
Pasi Latva: In March 2020 we had a plan to make good profits because it was the year of big events: Olympic Games and EURO 2020, and we also had an expansion plan which was supposed to be executed in 2021. In March, when the Covid outrage began, we sat down and analyzed the previous crises that have been in the world and especially in the travel industry: ash clouds, SARS, MERS, all the ‘nice’ things we have experienced. We also reviewed how long it took the market to recover from them. At the same time, when we were doing that, the military surrounded the Capital Region of Finland so nobody could travel outside the region.
Also, when we read the news from the world, it became clear that this has been the biggest crisis in the past two centuries. It was clear to us that there would be no business in 2020… at all. And the industry will slowly start to recover in 2021 so there’s no point in using our energy in the close play. That’s why we didn’t try to save the bookings from June, July or even September 2020. We either cancelled them or postponed them for the next year. 90% of the market tried to recover the bookings by moving them couple of months later which was pointless. We took the aim to the horizon and modified our expansion plan, secured our funding, and we were lucky that all the big events were moved one year ahead and not cancelled, so that we did not have to refund the clients. Our cash situation stayed pretty good.
Then we took the whole plan, checked the schedule and started the second expansion plan with dcs plus to implement the new software, so when the normal times will get back, we’ll have the business up and running. And because we had the time but no clients, it was the perfect moment to make the entire switch at once.
In the midst of every crisis, lies great opportunity. What opportunities were out there for Elämys during the last year?
Pasi Latva: At the same time, we also started to check out the market for the companies that we could acquire, because we knew that most businesses were in big trouble and we had the means to help them. That is when we did the reorganization, acquired the new companies, started the new business lines and recruited the best experts from the Finnish market to our company. That was our shift of plans. It was basically a modified plan we had for 2021 and it was also an accelerated one compared to the original.
Instead of looking at short term actions, we aimed for the long run. It was also a good time from an internal resources point of view because otherwise we wouldn’t have the time to create the entire infrastructure, to organize the entire business lines that were supposed to run on the new infrastructure. We took advantage of the low volumes or low activity to make use of those resources that were now available. Besides, the most important move, the new acquisition of other players that were in trouble, was great due to the fact that those players came with their expertise, their connections and networks.
Would you change something that you did one year ago?
Pasi Latva: No. I would stuck to the original plan, maybe we’re a bit behind from a technical point of view, but on all the other aspects, we’re on schedule! So, I wouldn’t change a thing.
Sustainability of business is on everyone’s minds right now - how are Elämys’s goals progressing? And how do you see 2021?
Pasi Latva: I think the demand will be late for two to three months. We expected the new bookings to start flowing, but they’ll most probably start in April.
The actual travel and events in Finland will take place in summer, but the bookings will start sooner, as I said, in April. From my discussions with other business owners, we all expected the things to start recovering from January, once with the vaccine. Otherwise, things are quite on schedule, as we expected...
What are the greatest challenges Elämys currently faces?
Pasi Latva: From an industry point of view, the challenge is that the market is not there. Even though we anticipated that it’s going to be like this, it’s still a challenge because we would rather do business than only develop.
If we’re looking at the company, a challenge we’re facing at the moment is the fast expansion that we’ve been doing. Organization wise, it’s pretty hard to implement the new infrastructure when most of the people are still working from home. And because we have combined 4 different companies, we have a lot of people who have never met before or have seen the office, this Teams world is a challenge. These would be the biggest challenges at the moment.
What role do you see technology playing in addressing travel recovery?
Pasi Latva: Technology is a game changer. Even though many business lines from the travel industry have been online for quite a while now, if you’re taking a look at the big bed banks, booking.com, Expedia or GDS’s like Amadeus, most of these operators have been old fashioned and not digitalized, but then they all moved there. But if you don’t do it now, you’ll lose the game in 3 - 4 years because people are online, and even the elderly started being online.
At the same time, online is not the solution for everything. You still need to have a good customer service and you need to be able to meet people in person. At least in the Northern countries, people still need a more personal approach to communicating. Whether it’s via email or phone calls, not all the bookings will take place online. It has to be a perfect match between giving the online tools, but at the same time to come with a human touch to the business.
How do you see the role of travel professionals?
Pasi Latva: People want to do business with other people, especially in the service industry. Of course, if it is a simple product there, you just want to book it online, easily and safe, but they want to know they have a guarantee for their trip: a phone number or an email to reach out to if something goes wrong. And I think that is the biggest opportunity for travel agencies and tour operators as for the past 20 years they’ve lost clients to the do-it-yourself world - the new players from the travel - and also to the direct suppliers – people book directly from the airline companies or hotels.
But now, in the pandemic scenario, after they tried getting their money back from those suppliers without success, they started to understand that when travelling with an agency, especially in the EU, you always have a guarantee as they are responsible for everybody. We become a travel insurance as a company.
In the near future, people will focus on the safety of the travel, safety of the destination so they’ll need to know there’s someone to look after them. So here comes the role of the travel consultant – people will need to know where they can go without having problems.
What advice do you have for any CEO today from the travel industry?
Pasi Latva: Rethink yourself! Reinvent yourself! If you’re still trying to do things the way you did them before Covid-19, you’ll be on the losing side soon.