Jiří Jelínek interview to Hospodářské noviny

Terrorism complicates the tourism business. While travel agencies have succeeded in increasing the percentage of holidays sold early in recent years, at a time of uncertainty, people now prefer postponing the decision on where to spend their vacation until the last moment. In response, vendors are trying to offer even better terms for first moment purchases.

"Discounts on vacation packages last longer. Essentially the same discount we used to offer only until the end of the year is now still available. I think that this year's advance sales will not end in February, but will remain active longer," says Jiří Jelínek, the man at the helm of the Fischer travel conglomerate. One of the leaders on the Czech market, Fischer also offers a guarantee that allows customers to exchange any holiday bought in advance sale until a week before departure.

Advance sales of summer vacation packages have now lasted for over two months. How are the sales figures considering the growing intensity of terrorist attacks?

Security problems that plague many countries are radically changing clients' preferences this year. Since the Paris attacks, the preferences of families with children have clearly shifted to traditional European resorts. The big hit of this season's advance sales of seaside air vacation packages are the Spanish islands Mallorca, Menorca, and Ibiza, the entire Canary Islands, Bulgaria, and the Greek islands Rhodes and Crete. Our advance sales figures are the same as last year's, but it's only because we began much earlier than the competition, several weeks before the Paris terrorist attacks. That was the breaking point. Since that time, customers have mostly lost interest in such destinations as Egypt and Tunisia, and until the end of last year, before the market recovered, they had reservations about Turkey, as well.

As it happens, we are talking on a day when a terrorist attack was perpetrated in Istanbul. Can that slow down sales of holidays in Turkey again?

Since the turn of the year, we've been trying to bolster demand by giving clients the option to choose their vacation without worries and, for instance, to secure a holiday for a child for free. For every single vacation package bought in the advance sale, customers get a guarantee that allows changing the destination until one week prior to departure. In case they're concerned at the last moment about the safety of their originally selected destination, they will have the option to go elsewhere without any exchange fees. The attack in Istanbul is unfortunate and will surely disquiet many tourists in the short term. On other hand, it was an incident that happened in a city, as opposed to a seaside resort. And there have never been any problems in holiday destinations in Turkey.

In the past, there was a fee for the guarantee of exchange. Since you now offering it for free, isn't it just a marketing gimmick? Would you be able to cope with a large number of exchanges during the summer season?

In case that a scenario like that happens, we have secured hotels primarily in Spain, and we also have sufficient capacity in Greece and Bulgaria. Our portfolio does not rely on one or two countries only. So, exchanging destinations would not be a problem.

Does that include capacity on flights?

We have contracted several flights for every day in the summer, and there are options to make far-reaching changes in flight schedules. In a nutshell, we would simply send a contracted airplane to a different destination.

Hurghada, where a terrorist attack has recently taken place, was sold as a safe holiday resort together with another Egyptian destination, Marsa Alam. Will you continue to sell vacations in this locality?

The two mentioned resorts are among the most secure in Egypt. We constantly monitor how the local situation is assessed not only by the Czech Ministry of Foreign Affairs, but also by the corresponding authorities abroad, particularly in Germany and in the United Kingdom. So far, we haven't noticed any shift that would indicate that traveling to Hurghada and Marsa Alam is dangerous. However, every person has a different idea of what is safe. As far as trips to Arab countries, there has been a significant 30% year-over-year increase in interest in travel to United Arab Emirates. It is unquestionable that there are more secure destinations in the world than Egypt or Tunisia, and more and more Czech tourists have realized this fact since the Arab Spring began four years ago.

Many travel agencies train their employees to be able to respond to the current situation that is marked by the continual incidence of terrorist acts. What is it like in your company?

We have contingency plans to deal with any emergency situation. I've heard that some Czech tourists who traveled to Hurghada with German tour operators were unable to reach Czech agencies after the attack. That could never happen with us. We have three representatives in Hurghada alone.

At the beginning, there were sleepless nights

In January 2004, when he teamed up with other associates of Karel Komárek ­– at that time a new shareholder of the Fischer Travel Agency ­– to replace the firm's founder, he was less than 30 years old and had no experience with the tourism business. Employees called them kinder management. Komárek, who had taken over the company in the summer in the year before to save it from bankruptcy, had kept the charismatic Václav Fischer as the chairman of the board, thinking that Fischer would continue to promote the firm's image. Fisher, however, was unable to cope with the arrival of a new management and resigned one month later. "I had faith in myself, but I often had sleepless nights when I doubted whether I was doing the right thing because everyone was telling me to change my ways," recalls Jelínek. It took three years before he stabilized the company and restored its profitability.◼ His self-confidence was boosted not only by the ability to push through his visions and put together a productive team, but also by sports. In his office, he proudly displays the trophy for winning the eighth season of the GPA Masters. His handicap in golf is 2.8. "Today, I mostly concentrate on my son," he insists. Already now, Jelínek junior is among the best young golfers in the Czech Republic and is busy gaining experience abroad.

What happens in your company if a terrorist attack takes place at a destination where your clients travel?

We begin by assessing information from multiple sources, not only Czech ones. Unfortunately, the Czech Foreign Ministry doesn't work the way it should. In most cases, ministry officials eventually issue a statement that people are more or less safe and should only avoid public areas where a large number of people gather. To a large extent, we rely on information given by the foreign ministries of Germany and the United Kingdom, and we listen carefully to what their politicians say. It's because these two countries update information for tourists immediately when an incident happens, and they do it on a daily basis to let everyone know whether traveling is safe or not. If the Czech ministry followed suit, it would make our life easier, including situations involving free cancellations. In the past, we eventually allowed fee cancellations of trips that were to take place after a security incident.

How would your life be easier?

As a minimum, we could be assured that cancellations wouldn't cost us so much money. In the past, airlines had an accommodating attitude and did not charge cancellation fees, but that was a situation that mainly stemmed from our long-term partnerships with them. So, the answer is yes. If the ministry recommends not traveling to a certain area, it provides us with an argument for canceling a flight and paves the way for negotiating an agreement with the airline.

Do you also work together with the secret service?

No. I don't think we need that. Whatever the British Foreign Ministry says is sure to incorporate information from the secret service. And when they recommend to people not to travel to a certain locality, I trust that they know what they're doing.

In the past, Czechs were among the first tourists who returned to places affected by terrorist acts and military conflicts. Have Czech travelers become more careful?

The purchasing patterns of Czech consumers are unquestionably changing. When they travel with children, Czech tourists no longer go to areas where there have been security problems. Instead, they opt for destinations they consider completely safe. As I mentioned before, they mostly buy seaside holidays with air travel on Balearic Islands, Greek islands with the exception of Kos, and Bulgaria.

I'm sure that choosing a vacation in one of these destinations at the last minute will be difficult. Demand will be very high during the main season. Holiday-goers from all western countries as well as Russians will head that way, and there will be no reason to offer large discounts on whatever vacancies are left.

Rather than on European beaches, however, people might be feeling that there is a higher risk in some European cities. If nothing unexpected happens, more people will travel to Turkey this year, which will provide us with a substitute for the large slump is the sales of holidays in Egypt and Tunisia.

They will go there despite the attack in Istanbul?

Turkish resorts are safe. Unfortunately, a terrorist attack can happen in any large city anywhere in the world between now and the summer. Following the downing of the Russian fighter plane, Turkish hotel owners have realized that there will be three to four million fewer tourists from Russia. As a result, they have begun to offer additional discounts, which we pass on to our clients as they keep coming. I think that this is one of the reasons why this year's results of Czech travel agencies will be more or less the same as in 2015.

Is there anything optimistic in this year's outlook for travel agencies, apart from, for example, cheaper air tickets thanks to lower oil prices?

It doesn't quite work like that for us as far as cheaper air tickets. As much as they can, travel agencies fix prices of aviation fuel with airlines in advance. So, when oil prices went down, it didn't help them, and they had to pay. One optimistic factor is that the Czech economy is doing well, which means that people have more money left for vacations and want to travel. Another positive thing is that there are many destinations that are safe to visit. If that weren't the case and if there were only a fraction of secure locations, the price of holiday packages would have to go up due to limited supply. As a result, sales would be slower.

During uncertain times, people postpone the decision on their vacation until the last moment or even opt to stay at home. Do you plan to respond in ways other than the vacation exchange guarantee?

Discounts on vacation packages last longer. I think that this year's advance sale, the so-called first moment offers, will not end in February, but will remain active longer.

HN: How do you adapt your business to the new situation, since there are fewer and fewer safe places where Czechs like to travel?

Our advantage is that apart from holidays on beaches at nearby seaside resorts, we also offer skiing trips. Likewise, we have considerably expanded our portfolio of vacation packages in exotic destinations since last year. In that segment, we recorded growth by tens of percent. Many more Czech tourists than before now travel to Cuba, the Caribbean, Dominican Republic, the Emirates, Oman, and Maldives.

There are a large number of safe places where clients can spend a seaside vacation. In addition, we have a new system that allows us to offer customers a departure from Prague on any day, including accommodation and length of stay at their choice. That's a trend that works abroad and we're going the same way in the Czech Republic.

Do you plan to start offering holidays in the Czech Republic to both local and foreign customers?

We are considering various options of enlarging our portfolio and reducing risks. That being said, no plans have been finalized as of now.

How has Fischer changed in the 12 years you've been at the helm?

It's a completely different company than the one I joined in 2004. There are many new people, we use new technologies, and we make it possible for clients to fly practically anywhere at a moment's notice. It's a very dynamic field. I still enjoy my work very much, and I'm inspired by lots of new trends from abroad.

What was it like when you took over the helm at Fischer? The company was in the process of falling apart at that time. Key employees were leaving, and nobody could be sure that Czech customers would remain loyal to the firm after the dramatic falling out with Václav Fischer.

The beginning was indeed very complicated; the company had serious problems and large debts. I had faith in myself, but I often had sleepless nights when I doubted whether I was doing the right thing because everyone was telling me to change my ways. As time went on, I surrounded myself with a team of professionals who have expertise, experience, and clear vision and are able to lead the firm toward growth and record very favorable results. According to non-audited figures, our last year's earnings before taxes and depreciation amounted to 145 million crowns, which translates to nearly 23% higher than the year before.

The Fischer Travel Group is the only large domestic travel company that has a Czech owner. Does it make any difference?

Perhaps in the fact that we concentrate more closely on what Czech customers want. Also, we've never focused on a specific country, which a foreign owner might have the tendency to do. Maybe that's why we've been so successful.

Is your owner, KKCG, planning to take over other companies in the tourism sector?

That's a very complex question. You must always consider return on investment, whether the firm operates in a segment that you don't have, and whether it makes sense to get involved in it. In 2015, our company's turnover grew by approximately 750 million crowns to four billion. We are the strongest on the market. Last year, we were approached by travel agencies that happened to run into problems. For Fischer, however, it makes no sense to buy a company with several hundred million in turnover and incorporate its business into our operations. That costs the management a lot of energy and often necessitates additional investments because travel agencies use different systems. It isn't something that would add to our business. Rather than going that way, we're looking at products and services that are missing in our portfolio. That being said, we are not negotiating with anyone who I could recommend to the shareholders.