Alistair Houghton meets Holidaybreak chief executive CARL MICHEL

IF YOU’VE ever travelled with Explore, then Carl Michel’s face will be familiar. Michel, chief executive of its parent company Holidaybreak, not only takes an Explore holiday every year, but in a Hitchcockian touch is pictured every year in the company’s brochure.

The Oxford and Harvard graduate, who is from an Austrian family and ran British Airways’ German arm, makes a point of visiting two new countries every year.

It’s perhaps no surprise that the well-travelled Michel has ended up at the helm of a holiday group with interests from school trips in the UK to sending explorers to the furthest corners of the earth.

Cheshire-based Holidaybreak owns the PGL education travel brand, as well as Explore, another arm specialising in European camping holidays and a division focusing on UK hotel breaks.

It’s a business affected by global events, from the unrest in Tibet and Kenya, to the sinking of a tour vessel in the Antarctic. Now it has to deal with the global downturn and last year saw profits fall after a “difficult” 12 months.

Michel, however, believes the company’s broad portfolio of businesses means it is well-placed to hold its market position despite the recession.

He said: “We’ve got a UK holiday business, a value camping business, a largely over 50s-based adventure business and a solid education business.

“I don’t think you could pick a more stable and balanced mixture of businesses to go into a recession with. We feel we’re in good shape to deal with whatever comes our way.”

Michel was born in Bromley, Kent, and after graduating from Oxford University started his career with management consultancy McKinsey.

From 1986, Michel studied for the world’s most prestigious business qualification, an MBA at Harvard Business School. “It was probably the experience of a lifetime,” he said.

“You do 800 case studies on the course. Probably 750 of those go in one ear and out the other, but the other 50 stick and you get something out of it.”

After McKinsey, he moved to BA where he developed website ba.com, ran BA’s German arm Deutsche BA and rose to commercial director in BA’s sales and marketing arm.

After leaving the airline giant in 2001, he carried out consultancy work at companies, including travel website Opodo, before Holidaybreak called in 2005.

He said: “What I found interesting about Holidaybreak is it was a slightly sleepy organisation that had the potential to step up in their market and move into a new area, which was education.

“If you work in a very large organisation such as BA, it’s so huge that it’s hard to make much impact. But, at a smaller organisation like Holidaybreak, you make a decision and it’s visible. You get a lot of job satisfaction.”

In the year ending September 30, Holidaybreak’s profits fell from £40m to £32.4m even as revenues rose thanks to the acquisitions of education travel firms NST and European Study Tours (EST).

The company’s adventure travel business, whose UK brand is Explore, saw operating profits fall from £6.6m to £4.8m as global events hit Holidaybreak.

On his office wall, Michel has a poster for Explore’s Antarctic cruises, featuring the tourist ship Explorer. Tucked in the corner of the frame, however, is a photograph of the ship lying on its side in the icy waters off the South Shetland Islands, in November, 2007.

That sinking meant there was less capacity for Antarctic tours and so revenues from those expensive cruises were down in 2008. Last year’s unrest in Kenya and Tibet also hit sales.

“Kenya is seen as a soft Third World destination,” said Michel. “If people see there’s strikes in Peru or riots in Kazakhstan, it doesn’t worry them because people who go there expect aggro. But Kenya is seen as a family destination, so it was hit.”

The fall of the pound against the euro and other currencies has also made some holidays more expensive, and not just in obvious locations – 14 West African states from Senegal to Cameroon, for example, use the CFA franc, which is linked to the euro.

Michel, however, remains confident that Explore’s comparatively small customer base – it has around 36,000 customers annually – will still want to enjoy their exotic holidays, even if they cut back on spending.

This year, Explore will launch a series of budget Explore breaks, to offer travellers the same exotic experiences with fewer bells and whistles.

MICHEL was an Explore customer before joining Holidaybreak and still enjoys experiencing his company’s offerings first-hand.

“I go on an Explore tour every year,” he said. “I used to try to go incognito but it didn’t really work because everyone knew who I was. So now I go announced – it’s like a busman’s holiday. I get good feedback and customers seem to enjoy the fact that the chief executive is there with them.

“I always go to two new countries every year. Last year, it was Togo and Benin.”

Michel also goes on a Holidaybreak camping trip every year. Michel believes the division will continue to perform well as families look for lower-cost annual holidays.

“I’m of the view that the family holiday is fairly sacrosanct,” he said.

“There’s nothing like the old flapping and windy tents any more. You get the advantages of cooking for yourself, and you reduce the cost of your holiday because the incidentals are low. It’s a way of making your pound stretch further.

“This is clearly the demographic most affected by recession – families with mortgages and kids. But, if they want to go somewhere affordable, camping hits the spot.”

The group’s hotel breaks arm had a tougher year as demand for London breaks fell with a lack of major exhibitions and new shows to attract people to the capital.

Demand for short breaks could fall as people scale back on discretionary spending, but Michel says hotels are now cutting their rates and allowing Holidaybreak to offer cheaper travel and accommodation packages.

With new musicals, including Priscilla Queen of the Desert and Sister Act opening this year, and the euro making overseas breaks more expensive, Michel believes London breaks will again grow in popularity.

Holidaybreak’s education arm was formed in 2007 when the group bought school travel specialists PGL and NST and expanded last year with the purchase of EST.

Michel believes parents will continue to prioritise educational spending, despite the downturn.

“This division is well aligned with Government thinking about education outside the classroom,” he said. “It’s already 100% on target for this year and 50% for 2010. We’re doing better now than we were at the same time last year.”

alistairhoughton