Destination South East Asia. An Interview with Alex Saint, CEO of Secret Escapes

Secret Escapes is a members-only travel online company with a member base of 23 million people and offers heavily discounted luxury hotel stays and trips across 14 markets.

Alex Saint is the Co-founder and CEO of Secrets Escapes. Alex started out in marketing at Unilever and turned to the digital industry around the early 2000s. He worked on the digital side of the British newspaper Daily Mail, and in 2005 he launched Dealchecker, a price-comparison website, which led to the birth of Secret Escapes in 2010.

ALEX, SECRET ESCAPES IS NOT THE FIRST TRAVEL CLUB OUT THERE. HOW ARE YOU DIFFERENT?
True, there are other travel clubs, but not a lot of them focus exclusively on the luxury end of the marketplace. But, I think it really comes down to execution. It’s critical for us to have a stringent pricing and quality check in place so that we can really offer value in the form of quality deals to our members. You see other online travel agencies filling holes by offering rubbish deals but we believe that performance is dependent on the combined quality of the deal. That’s where we’re different.

WHAT DO YOU SEE AS THE KEY INGREDIENT IN YOUR RECIPE FOR SUCCESS?
Our data-driven approach has been fundamental. In fact, I’d say that goes for any type of business in the digital space. You really need to leverage all the relevant data that you generate. They can provide you with a massive amount of information to perfect your business. Another key ingredient is our business model. The fact that we’re membership-based means that we don’t have to pay again and again to re-target customers, unlike other online travel agencies. Our model gives us the ability to focus much more on improving the product experience, and we can essentially talk to our members all the time.

BOOKING LUXURY TRAVELS IS NOT SOMETHING WE DO FREQUENTLY. HOW DO YOU MAINTAIN ENGAGEMENT?
I think it’s a combination of the kind of product we offer and our CRM program. We put our product in front of people all the time and it’s the kind of content which is entertaining and inspiring to consume. I think that’s the recipe to keeping engagement levels high. If we were offering cheap city hotel rooms or flights from A to B it wouldn’t be the same. Such products are practical and functional but there’s nothing enticing about them. Our members love looking at our content and they don’t necessarily need to book every time to enjoy browsing through it.

Taj Palace Outside view

YOU HAVE RECENTLY LAUNCHED IN HONG KONG, SINGAPORE, MALAYSIA, AND INDONESIA. WHY DID YOU CHOOSE THIS REGION TO BE NEXT IN YOUR EXPANSION PLANS?
It’s massively exciting for us to launch in a non-Western market for the first time. We chose Hong Kong, Singapore, Malaysia, and Indonesia because we believe we have the ability to tackle this region really well. Hong Kong and Singapore have small but very affluent populations and all four markets are very Western in many ways when speaking of culture and travel behavior. Plus, you have populations that speak English very well. We know we have the experience and the right product mix to offer to these markets. We had Japan and South Korea on our shortlist, too. But this part of Asia poses challenges in terms of cultural uniqueness, behavior, language and travel patterns which are very different from what we have experience with.

I’VE SEEN YOU MENTIONING THAT ENTERING INDONESIA IS A GAMBLE. WHY IS THAT?
With Indonesia, it’s a test for us to see if and how we can efficiently reach our potential customer base without wasting marketing budgets. Indonesia is the world’s fourth most populous country, yet it has a fairly small affluent population for whom our product is relevant. It is a somewhat similar socio-economic composition that you find in China and India. Indonesia is large enough to provide us with sufficient learnings to determine whether we’re taking the right approach in such a market but not so big that we have to go all out in order for us to produce results. I’m excited to see what learnings we can take with us for a possible launch in China and India.

HOW DID YOU DECIDE TO LAUNCH IN SOUTH EAST ASIA?
Well, a key question we asked ourselves was: “Is there a viable customer base?” By this I mean in the sense that there’s a sufficiently large affluent base of outbound travelers and travel habits that match our product mix. So we gathered lots and lots of data on demographics and compiled all the relevant travel research that we could get our hands on. Other factors like economic climate and local competition obviously mattered, too. Also, for us it has been an important part of our strategy to pick a region and not to, say, go to China and then Brazil. It’s a completely different product for two such countries and we’ve done well so far by focusing on efficiency in terms of operations and product mix.

Alex

I KNOW YOU CONSIDERED THE PHILLIPINES BUT DECIDED AGAINST IT. WHY?
The Philippines is indeed an interesting market in that region as the characteristics are similar to those of Malaysia and Indonesia in many ways. However, we ended up deciding against it. The potential reward simply didn’t match the efforts required as the legal environment proved to be really difficult there. For companies in the travel sector there is a ton of licensing criteria. Regulations are extremely strict and the processing takes a very long time.

WHY DID YOU DECIDE TO PARTNER WITH LEVERATE FOR YOUR MARKET ENTRY TO SOUTH EAST ASIA?
Essentially, we are a European business and we have worked with Leverate in Europe. They’ve done a great job for us when it comes to entering new markets. Culturally, we understand how Leverate works because we share the same belief in the power of data and testing to drive growth. We spoke to several agencies in Asia and they just didn’t have the same data-driven approach to marketing and weren’t as focused and organized in their concept and execution. Plainly speaking, we didn’t have the confidence in them, and we hope to see Leverate in Asia replicating the excellent track record they have with us in Europe.

FOR WHAT OTHER MARKETS ARE YOU CURRENTLY IN THE PROCESS OF ANALYZING THE MARKET POTENTIAL? OTHER PARTS OF ASIA? SOUTH AMERICA?
At this point in time, we chose not to enter South America. Brazil currently has a less than stellar economic environment – as we all know – plus fierce local competition. The rest of the continent is not really as exciting at this point in time as the affluent consumer base is rather small and travel habits don’t match too well with our product. Regarding Asia, India and China are on our radar. They are among the biggest consumer markets in the world and there is a lot of outbound travel from those destinations. Other markets like South Korea and Japan look exciting, too. If you think about it, while they’re much smaller than China and India, Japan and South Korea’s affluent consumer base is just as large and therefore holds a lot of potential for us.

YOU LAUNCHED IN THE U.S. SOME TIME AGO BUT HAVE TONED DOWN THAT MARKET A BIT. WHAT DOES THE FUTURE HOLD FOR SECRET ESCAPES IN THE U.S.?
I’d definitely not say that we’ve toned things down at all in the U.S. but we have refined our strategy since our test launch. The thing with the U.S. is that it’s a huge, huge market. Or rather, markets. A few months after we launched we realized that, in terms of marketing, we were essentially dealing with a collection of countries rather than one. At least for our product, the concept of a national launch in the U.S. now sounds strange. Take the Midwest and New York. Travel behavior differs vastly and New Yorkers’ habits are closer to those of Western Europe, our home market. We basically realized that we were dealing with consumers with very different needs and wants and that the product mix and our marketing approach didn’t match that a hundred percent. For now, we’re focusing on maturing the Northeast and building out from there. The key is that we maintain strong operations. Even though we’re not heavily marketing Secret Escapes outside the Northeast we’re still contracting with new suppliers all over the U.S. The appetite for taking on the entire U.S. is certainly still there, we just need to make sure we take the right approach.

ARE THERE ANY PLANS OF EXTENDING THE PRODUCT LINE?
It’s certainly something that has crossed our minds. We have already experimented with spa days, attractions, and restaurants. All of which has the luxury element at its core. But we have to have the balance right before we venture further out. It’s critical for us to maintain a strong focus on our core business while testing new opportunities. We must be able to execute the core of our business to perfection before we extend the product line but sometime in the future you’ll likely see us offering new products.

ALEX, THANK YOU VERY MUCH FOR SPEAKING TO US.

This blog post is an adapted version of an article that featured in Leverate Media’s company magazine ‘Leverate ONE‘.