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John Hayes

Every cloud

Friday 1 January 2010 8:00

John Hays, who usually spreads sunshine, could have been in the doldrums by now, but for holidaymakers like us being cleverly realistic – as he explains to Brian Nicholls.

People like us are realistic, even in purgatory. Having decided in the midst of a credit crunch that holidays abroad must go, we still took them months later, but in a smarter way. Thus John Hays, founding owner of Hays Travel, ended 2009 with his customary smile.

Frowns are alien to him anyway, but the relief was clear when income for the year ricocheted from -25% to +25%. What about the craze for the ‘staycation’ then? Wasn’t it Leyburn and Kelso, rather than the more exotic Larnaca and Kathmandu? Well, January – usually the peak month for bookings – was deathly quiet in 2009.

“Customer confidence was at an all-time low. People were uncertain if they’d have a job by the summer,” Hays recalls.

But May brought a change. Why? “I think people, if they can afford it, want their week or two in the sun. It’s therapeutic. The poor weather at home helped. Also, people who were still in a job generally found they had more disposable income, inflation being effectively zero.” We book cannily now though, picking non-Euro destinations like Turkey and Egypt to get more for our money.

Again, because of the pound’s declined exchange rate, we’ve moved from self-catering towards all-inclusive holidays, paying Sterling up front to forestall additional costs.

Some of us are also cutting back from 14 nights to 11. So Hays is confident about 2010; his firm’s 30th anniversary year.

“The world has changed a lot since 1980,” says Hays, now 60.

“I’m not one to look back much. Nor am I a firm believer in five and 10-year plans. You need to know where you’re going generally, but I chug along.” ‘Chugging along’ has built him the UK’s largest independent travel agency - one of The Sunday Times’ Best Companies to Work For in the UK, turning over £400m-plus, and all this from a start-up without capital in a corner of his mother’s childrens wear shop.

His late mother’s inspiration has been especially on his mind since the family made her recent funeral a celebration of her 88 rags to riches years.

Bedridden in her 30s and told she’d probably be a permanent invalid, she instead recovered, launched and ran two businesses, and pulled a mining family out of poverty and lived a rich, fulfilling life.

Her brother Tom told the funeral gathering of a crammed life for a family of six (three sons, one daughter) in a one-bedroom cottage.

They moved to Southwick Road near the Stadium of Light in Sunderland - but even that two-up two- down house, which was “palatial by comparison”, still had a backyard nettie and no hot water.

John Hays continues: “Shortly after my brother Malcolm was born, my mother was very ill. For a couple of years she was in hospital or bedridden.

“My brother, who was five years younger, went as a baby to live with Uncle Tom and Auntie Nancy, who had no children then. Bringing Malcolm home later was traumatic. I remember him crying for his ‘mother’, who was actually his auntie. I lived with my grandparents in the two-up-two-down.

“Even when I came back, my mam was always in bed downstairs at the front window, seeing what was going on. Rheumatic fever had damaged her heart. She could have said, ‘that’s it’, but at 38, with my dad a pit joiner and no money whatsoever, she borrowed £50 from my grandfather Tom Moffat – a Wearmouth miner - to get a credit facility at Joplings.” The Sunderland department store paid her commission to win customers.

They’d repay Joplings over 20 weeks. From that, Hays Credit developed, which Malcolm now runs with a staff of around 100. Later, she opened the shop. Peggy Hays was bright, intelligent, top of the class, but left school at 14 to be a breadwinner; it was as expected then, says John Hays.

At Woolworths, she was soon chief cashier, then war intervened and she rose to corporal in the Pay Corps. Peggy’s childrens wear shop in Church Street, Seaham, became known as the Ladybird shop after the brand sold there and a ladybird children’s ride inside.

In the 1960s, she opened a second childrens wear shop in Sunderland’s Vine Place (where Hays Travel is headquartered and Hays Credit stands).

These shops ran till the late 1990s. A keen dancer, she also opened a dancewear shop. Peggy was proud when John, after grammar school, had opportunities she never did, graduating in maths from Oxford University and then, after a year out, gaining an MBA from Manchester Business School.

She was proud too when her love for Sunderland AFC rubbed off and John was for some time vice-chairman of the club. Initially, and briefly, he entered merchant banking in the City: “Plenty of money, but I’m a people person.

I didn’t feel comfortable doing deals, though I was good at the sums!” He returned to the North East. At 29, he jotted down some ideas for a start-up; it must offer growth, need no initial capital and promise fun.

Undertaking? A guaranteed market, good profit margins even during recessions, and with his dad Jack capable of switching his joinery skills at Seaham Colliery to coffin-making.

But where was the fun? So Jack instead put up a trellis partition in Peggy’s shop, behind which John’s desk stood, secured by a £10,000 bond Peggy had put up for his Association of British Travel Agents’ licence to trade.

Her faith was justified. His business awards since have included Wearside and Durham Business Executive of the Year, the first Entrepreneur of the Year for The Entrepreneurs’ Forum, lifetime achiever >>and outstanding achiever awards from the travel industry, and inclusion in a list of 500 people considered the most influential in the North East.

From the start, he revelled in challenges. A trading inspector rejected his licence application because, he said, the agency had no separate entrance. The normally self effacing Hays pointed out that Thomas Cook working inside Harrods had no separate entrance.

That got the decision reversed. A rival agency, meanwhile, set up in Seaham and, through a related taxi firm, gave airport lifts free, all while Hays’ newly hired staff had been unable to work for months owing to the licence delay.

Hays responded by making his the first travel agency to offer free travel insurance. After two years, he opened a second shop in Sunderland, and those labyrinthine premises are now its headquarters.

The firm will not quit them in favour of a business park because the staff like it there. A £130,000 investment was needed, and by sub-letting some space the company continued to grow.

By the early 1990s, the shops totalled eight. National agencies muscled into Seaham and other North East towns.

Today, there are fewer independents. Hays Travel, which was covering overheads but lacking the economies of scale to compete then, might also have disappeared had it not chased growth.

Now it has 35 shops in the region, call centres at Newcastle, Sunderland and Stockton, and is entering the North West with three shops in Bolton.

It employs 850 staff - including 300 home workers and British expats working from Turkey, Majorca and the Canary Islands. Head office staff also work on behalf of 150 other independents operating under licence to Hays Travel – Hays Travel Independence Group.

They keep their own names, but share Hays’ bonds and licences umbrella. They also get Hays Travel’s back office expertise and buying power. Hays, a director of The Entrepreneurs’ Forum, advises aspiring business builders: “In adversity, innovate.

You can often come up with something much better than you otherwise might have done.” While enjoying TV programmes like Dragon’s Den and The Apprentice, he (like Duncan Bannatyne, incidentally) also tells aspirants: “You don’t need wonderful ideas to succeed in business.

If you’ve got the next Microsoft or Google - brilliant. But how many have that? Not me.

“Business needn’t be unique, but must be relevant, and you must commit to adding value for customers. My mam used to say, ‘do as you’d be done by’.

That’s true of relations with customers, staff and suppliers.” In an interview otherwise lavish in humour, he says this seriously, having earlier rung off after 20 minutes into a telephone queue to order a Sky Digital box.

“They were very nice when they got back,” he says, admitting to having left a stroppy message. As an accredited Investor in People, Hays Travel prioritises customer needs – even when dealings overrun into personal time.

He thanks staff for that. He pays suppliers promptly, even in this trying climate.

“We don’t own aircraft, cruise ships and hotels. These people have big commitments.

We depend on their goodwill.” An ageing population with disposable income prompts Hays to expect more cruises and other long haul vacations in future, and Emirates airline’s apparent satisfaction with the public response to its daily flights from Newcastle augurs well.

He also expects activity holidays to grow more popular. As for carbon concerns, he expects aircraft to continue becoming more fuel efficient. Meanwhile, he expects 2010 to be marginally better than the 2009 that showed growth and profit.

“It’s testament to our brand’s strength and our fantastic staff,” he declares. Being involved enthusiastically in charity and fundraising events, they help perpetuate goodwill in the community.

“They didn’t get an annual pay review in April, yet morale and team spirit were as good as ever. They see the sales figures – we’re as transparent a company as possible.

By October, we were able to give an above inflation 2.5-3% pay rise. It was very well received.” As for the fun he wanted: “It’s a tough business, but yes, it’s filled with masses of fun.” After all, if you must attend a business conference, as he did recently, you may as well go to Sharm El Sheikh as Blackpool.