Chang Theng Hwee, founder of Country Holidays Singapore, discusses why he sold to Scott Dunn. One, their philosophies clicked. Two, he loves his staff. Three, his baby will be stronger faster. To each his own.
Why did you decide to sell?
For many entrepreneurs, exit is always at the back of their minds. There are four exit strategies – let it die a natural cause; pass it on to the next generation; IPO; sell. In the 24 years since I founded Country Holidays, there have been M&A talks to make the company stronger. When I met Simon (Russell, CEO of London-based Scott Dunn) in June 2016, we clicked. The story of Scott Dunn (founded 32 years ago) is similar to ours – same founder passion, same customer-centric focus, etc – and this we learnt not over an hour but over talking to one another for 1.5 years. (The sale was in January, and was 100 per cent, but Chang gets some shares in Scott Dunn.)
How will it make you stronger?
Firstly, it’s the technology Scott Dunn brings. It has a massive IT team in London which has developed a sophisticated system that can tailor product and pricing quickly and easily. Our IT investment is probably just five per cent of what Scott Dunn has done over the years. We want that kind of system, but ours is ‘mini’ compared with theirs as our size prevents us from doing a system at that level. You must have enough sales and revenue to be able to do that. So the increase in efficiency is something we look forward to.
Secondly, it’s the professionalism – marketing proficiency; in-house digital marketing team whereas we sub-contract; in-house coaches to train staff on customer service, soft skills – again, not quite possible for us to do without the economies of scale. A company can’t develop wholesomely without all components coming into play. Imagine if you’re good at sales, but has no HR to support you. Scott Dunn parachutes that.
Thirdly, it’s staff morale. They see themselves as part of a big international company. They are happy with us – many have been with me for years – but now they are looking forward to international exposure. It’s energising for them.
Any misgivings on giving up the brand you’ve built?
There will be things I’ll miss. With the name, interestingly, each time we had a management meeting, we debated if we should change the name to better reflect our product. Half of the team said yes, the other, no. Some customers said what, ‘you won’t be Country Holidays anymore???’ I admit there’s sentimental attachment to the name, although I’m quite easy with the rebranding to Scott Dunn.
For me, I’ve been my own boss 24 years – you ask me for a budget? These are little things that will be new to me (laughs).
What’s the budget?
This year, frankly, we’re not talking about hitting figures. We want to make sure the integration is properly done. Though we’ve spoken to each other for 1.5 years, when marriage happens, there’s still a period of adaptation. So deliberately this year, it comes down to operations – how customers will benefit, are staff comfortable with each other, with systems, with cultural differences, personnel policies, etc.
I’m sure 1.5 years of talking has involved growth discussions?
The potential of Asia is tremendous. These are the golden years for those in their 50s and 60s in Singapore and Hong Kong. Their parental responsibilities are over and, unlike the baby-boomers of 10 or 15 years ago, where a trip meant going to America, these people have seen the world and are really into experiential travel.
Also, look at the whole South-east Asia – the rich Indonesians, Filipinos and Thais. The first generation sent their kids to the US; these kids, now in their 30s and 40s, are back with tons of money, are international, know the finer things in life. That’s a market much bigger than Singapore. There’s the Chinese market; the way they spend money is now legendary.
So we’re going to use Singapore as the base for South-east Asia, and Hong Kong for China. Dubai is a two-man office, but making inroads. The office is closer to London, and Scott Dunn has a lot of experience as well with this market. So with this three centres, we feel we are well-positioned to capture growth. We have not even thought of India. There are no figures yet, but we feel a 30-40 per cent growth would not even be a cause for popping champagne.
(Laughs) Prosecco then. So why do you need Scott Dunn? Couldn’t you expand on your own?
Like I said, Scott Dunn brought the three key things to the table. And to grow, you need financial muscle. I could build up my financial muscle slowly, but why not quicker? If I were to walk this journey alone, it would take many more years and, along the way, there’s always a financial risk.
Markets go up and down. I’ve gone through the 1997 Asian financial crisis, the SARS crisis, the US financial crisis 2007. We rode through them, but they did slow down expansion ambitions.