Profile: Simon Bicket, FD of Cheapflights

Profile: Simon Bicket, FD of Cheapflights

Simon Bicket joined Cheapflights at a time when the docom bubble was about to burst, a task that put his entrepreneurial skills to the test

It seems entirely apt that the interview with Simon Bicket, director of
finance of Cheapflights Ltd, should be conducted in some far flung corner of the
planet. But to be given a choice between Los Angeles, Amsterdam or Malaga seems
flash, even by Bicket’s standards.

As it turns out, the destinations are the names given to the company’s three
meeting rooms at its London office in Marylebone’s Chiltern Street. There’s
something distinctly dotcom about the working environment – given the online
nature of the business, that’s perhaps not surprising.

But funky meeting rooms aside, this veteran of the travel search market,
which this year celebrates its 10 year anniversary, has grown up an awful lot in
that time.

‘There wasn’t such a sector as travel search when Cheapflights started out in
1996,’ Bicket explains. ‘It’s been a consistent growth path and we’ve maintained
our marketshare. We have a bee in our bonnet about being different.’

The Cheapflights concept is simple. The website allows visitors to compare
prices on flights, holidays and accommodation, but unlike rival sites such as
Expedia, and Travelocity, there is no inventory to sell. ‘We show
offers from online and offline travel companies and update details several times
a day. It’s about finding good deals, but we don’t show offers because we have a
vested interest.’

Currently the site receives details of around one million holiday and flight
offers every day. ‘It’s a massive engineering exercise to get those offers in
and it’s a great credit to the skills of our core technical team. It’s something
that’s continually being developed. This business never stands still.’

In addition to updating deals three times a day, the site also goes through
two or three major rebuilds every year in an attempt to improve usability and
provide more offers in a more appealing way. Cheapflights refers to usability
studies and makes use of intelligence gathering devices to gauge the popularity
of pages and measure click through rates.

Bicket may be bullish about the Cheapflights proposition, but with so many
other websites promising to tap into the nation’s penchant for a good holiday
deal, and lack of awareness among consumers of the difference between the way
that different sites work, there’s certainly no scope for complacency.

Competitive pressures aside, other external factors can wreak havoc with the
numbers – the impact of terrorism, for example, resulted in a significant
decline in traveller numbers. ‘After 9/11 our traffic went down by 25%, but
within a few months it had climbed back.’

Bicket is philosophical, though, and puts it all down to the reality of
running a consumer service. ‘We do get affected by all sorts of events outside
our own business and even outside the travel industry – from the economy to
Asian flu. It’s all about managing our risk.’

Bicket joined the company five years ago, brought in as part of a management
shake up for a business that had outgrown its founder, John Hatt, and was in
desperate need of moving on to the next level.

‘By 2000, Hatt had grown the business to a point where it needed professional
management and outside capital,’ he says.

In March 2000, Hatt, now a consultant editor of Condé Nast Traveller
magazine, sold his majority stake in the business to a group of private
investors. Today he retains a very hands off involvement with the business,
sitting on the company’s advisory board. In October 2004 Bicket joined the main
board alongside CEO David Siskin and Hugo Berg, chairman and head of the
company’s international business.

‘Professionalising management means setting the market strategy and the
technology strategy and continuing over the years to align these plans in
accordance with changes in the market. When you’re tiny, your choices are quite
limited, and you grow according to the resources available to you.’

In practical terms, what Bicket brought to the company were some long-overdue
management controls and realistic budgeting processes. ‘It’s a balancing act,’
he admits. ‘You want to put as much as you can afford into developing the
business without putting the company at risk.’

Joining Cheapflights at a time when many internet startups had already heard
the loud band of the internet bubble bursting, Bicket’s professional background
— predominantly rooted in the bricks and mortar end of the spectrum – was
invaluable. But he also had to learn new skills.

‘If you don’t have an affinity with technology, you shouldn’t work in a
dotcom,’ Bicket warns. ‘But it doesn’t take long to pick up new things. I’m
thoroughly excited by the fact that I can publish to a web page so quickly. The
ability of the internet to connect people is an amazing thing.’

Bicket trained at Binder Hamlyn and after qualifying as a chartered
accountant in 1982, worked in insolvency before leaving practice life for a
career on the corporate side of the fence. It wasn’t long before his
entrepreneurial leaning found an outlet. He spent nine years at a transport
conglomerate, then in 1996 led the successful buy-out of Rexson Systems, a
Midlands-based paint and ink dispensing equipment manufacturer that Bicket sold
in 1999.

But it was probably his very own foray into the online business world –
albeit unsuccessful – setting up an online auction company and incubator for
start ups, which taught him a thing or two about the harsh realities of the
dotcom dream. ‘It was a tremendously exciting time, but fortunately I invested
my time and energy and not capital. Then I joined Cheapflights.’

Since then, adapting to life in the online world hasn’t proved too difficult,
thanks in part to Bicket’s willingness to embrace technology. ‘I’m an early
internet adopter but I bet the people in my age group use the internet much more
than they did five years ago. Typically we’re spending more online, and
researching a lot more than we used to, and travel is very much a growing

‘As an FD, you have to be able to assess risks and make judgement calls. In
this role, I’ve needed to be closely involved in the commercial side of things.
But because it’s a dotcom and consumer-based, it can be very volatile – it’s
very important to get the balance right.’

But it has been a steep learning curve. Bicket admits that the sector is
still relatively immature and undergoing huge amounts of change, which means
moving with the market. ‘But we will continue to be a resource for the
travelling public. We won’t sell a product, instead we will put forward the best
deals from our advertising base.’

It’s free for companies to display deals on the Cheapflights website – these
days the site makes money every time someone clicks through to a travel
provider. The pay per click model – ranging from 17p to 300p, depending on the
position on the site – introduced in 2000 to replace a fixed fee tenancy,
appears to be paying off.

‘Now it’s a highly regarded form of advertising revenue. We effectively
generated revenues from our growing web traffic.’

Over the past five years, the company’s headcount has grown ten-fold to 80
thanks to what Bicket describes as organic growth out of self-generated funds.
‘We have this virtual cycle of investing and growing the business. As we grow
sales, we can take on more people and develop the website.’

Almost three years ago, Cheapflights took its first tentative steps into the
US market with the launch of – already a top 20 US travel
website. ‘In that time, traffic to the US site has grown to a level that it took
five years to get to in the UK. We believe that Cheapflights has a very special
role to play in global travel search. The US is the first of our extensions into
that space.’

Country-specific sites in Canada and Australia are currently at embryonic
stages of development. ‘We believe in Cheapflights as a global brand, but it’s a
case of doing what we can when we can,’ Bicket says. The fundamental business
model may be virtual, but there’s still a need for a local presence – mainly to
sell to local advertisers.

‘We think we have a unique culture thanks to an incredible range of talent.
Creating a website requires a whole mix of talent, and it’s a wonderful work
environment as a result.’

Fortunately his hectic schedule still allows for the odd break away from the

He admits working at Cheapflights has changed his approach to holidays, but
having a family means taking off on a whim isn’t really an option.

‘I’m fascinated by travel – but I’m a family man. The last holiday I went on
was to New Zealand and every three years I take off the whole of the Christmas
holidays – the next one will be in two years time when we go to Chile.’

The extended breaks are not only a chance to recharge his batteries, they
also give him space to think about the next steps for the business. But Bicket
says there are no plans for a float in the short term. ‘At some stage the
investors will want to exit the business but it still has a long way to go.’

Lessons of the dotcom bubble

At the peak of the dotcom boom in the late 1990s, countless internet
companies were riding an enormous wave of enthusiasm that pushed their stock
valuations into the stratosphere despite never makinga penny.

When the bubble eventually burst, industry watchers were keen to blame the
billions in venture capital given to entrepreneurs with little experience to
fund ludicrous ideas.

Fortunately for Simon Bicket, a solid foundation in the bricks and mortar
world married with booming consumer demand for discount travel has helped this
particular dotcom venture go from strength to strength. ‘We’re an online
business and we’ve survived in the world’s most competitive marketplace,’ Bicket

The good news for Bicket and his fellow directors at Cheapflights is that,
despite some pretty serious blips over the last few years, the appetite for
travel is showing no sign of abating. UK airports operator BAA says passenger
numbers at its seven UK sites grew in 2005 despite a notable slump in the number
of charter flights. Last year it handled 144.34 million travellers – an increase
of 3% on the year before.

The flipside for Cheapflights, of course, is the growing number of websites
dedicated to helping consumers bag a travel bargain. But now with signs of
another dotcom bubble starting to inflate, internet entrepreneurs would do well
to heed Bicket’s advice – all the more pertinent because of his experience of a
failed dotcom venture.

‘Dotcom is a long-term game,’ he warns. ‘Investments in technology go in fits
and starts and certain technologies will be flavour of the month. We have a long
term strategy. And the fact that we’re privately held shields us from that.’

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