Excerpt from Dinesh Dhamija's biography: From A Kiosk to a Continent

Chapter 4 - From a Kiosk to a Continent

In 1979 I was working for IBM, reluctantly paying half my salary to the government, when Thatcherism suddenly appeared.

At her first speech to the Conservative Annual Conference as Prime Minister in October of that year, Margaret Thatcher laid out her vision for the country. Militant unions had been holding the country to ransom over wages and conditions, and she identified the problem: “The key to prosperity lies not in higher pay but in higher output,” she said. “The future of this country depends largely on the success of small businesses.” Thatcher’s mission was to create wealth and employment through productivity and enterprise.

Like thousands of others, I took this speech as a rousing call to action. It told me that the Conservative government would support entrepreneurs who had the balls to start new businesses. By implication, regulations and taxes would favour us. And perhaps just as importantly, there was a sense that the country wanted this. Enough moaning about wages and working hours, it was time to do something for ourselves.

My entrepreneurial instincts came to life. Over the years, I’d sold paintings, snakeskins and burgers, but these were small-time efforts, rather than anything sustainable. What kind of real business could I start?

As a Punjabi, I didn’t like the idea of being a shopkeeper, which was more associated with Gujuratis. On the way to work, I used to walk past a newspaper kiosk and chat to Jim, who told me he had five kiosks in different rail stations. His daughter had a small kiosk in Earls Court but he said she wasn’t enjoying it so how would I like to take it over? I had to overcome my initial reluctance – and the disapproval of my father, who said “I didn’t send you to Cambridge to become a shopkeeper!”

Jim wanted £3000 for the ‘key’ money, and my friend Freddie, who had made some money from investing in the stock market, offered to lend it to me in two instalments – an initial £1500 and another four months later. Freddie said: “You’re sitting at IBM doing nothing, why not have a go?”

I didn’t know anything much about travel, but in early 1980 I made a sandwich board to put outside the kiosk and started selling theatre tickets from this little shop, which was no bigger than a box room, maybe 80 square feet altogether. There was a good deal of pedestrian traffic along Warwick Road in Earls Court as people came to and from the station. We earned the £1500 fairly quickly and paid Freddie back. But we weren’t making much, we had to scrimp and save for months. We called the company Dabin, an amalgam of Darun and Biren, our two sons.

Looking back, there was no strong reason for picking travel, except that Earls Court was full of Australians who were looking for air tickets. It could have been anything really – shoes or computers or even cars. If I could sell it and make a profit, then I would have done it.

Things were going well and we had a couple of people working for us in the kiosk, but we noticed that the toilets we shared with the neighbouring kiosk were always filthy. It became a real nuisance, so we bought up the lease to this kiosk and started a sandwich shop! I took a real interest in creating top-of-the-range sandwiches; I’d go to the city and inspect what Birley’s were selling, then come back and make them for half the price. Our travel agency staff liked them, some of our customers bought them, and it meant we could keep the toilets clean.

However, it almost landed me in jail. We hired someone to run the sandwich shop from 7pm to 2am, catering to late night shoppers and revellers. One day, the police summoned me to the station and said our employee had been caught dealing drugs from the shop. Special sandwiches indeed. Luckily they didn’t accuse me of any wrongdoing, but we lost our late licence.

Within a few months, our landlord Jim proposed taking us to London Transport where we could sign a year’s lease for £4000. By this time, I was becoming a little more confident and thought I could sell tickets to my friends, so I signed the lease. We began to find ways to get discounted tickets: Keith Prowse would sell us theatre tickets and pay us a 10 per cent commission, offering us a month’s credit. This was very helpful, because it meant that we had cash in our bank account to use during the month.

We also agreed a deal with Mayflower Travel. This was an International Air Transport Association (IATA) registered agency based in Mayfair, central London, which could call on a month’s credit and in turn offered me the same terms. They agreed to split the IATA commission with us on air fares that we sold. Between Keith Prowse and Mayflower, it meant we had enough money in our cash float to pay our electricity bills and our staff salaries. It was a delicate balancing act: we had hardly any money of our own, but if you can find out who has credit, there’s always scope for negotiation. Once you get to know a business, you’ll find that there are many places where credit is available.

I remember feeling grateful for the support of our friends and families at the time. This wasn’t in the form of financial support, but just the way that they would come and visit us, maybe bring us some stationery supplies, or tell us what they’d seen going on in the travel business. They were our ears and eyes in the marketplace.

One day in 1981 a man with a beard came in and offered us Bob Dylan tickets for £5 each. I said they wouldn’t sell in Earls Court and told him to buzz off. But he promised me that I’d make £500 a day if I took them, so I gave it a go. Soon we had queues around the block and were making £1500 a day, thanks to the bearded Harvey Goldsmith. I was knocking on heaven’s door.

To become a travel agent, I took a British Airways correspondence course, so then I too could become IATA registered. At the time, Earls Court was full of Australians on working visas, who came to London for a couple of years, earned some good money because the pound was strong against the Australian dollar, travelled around Europe and went home. We would quote them an air fare and they’d tell us they’d seen something better elsewhere, so we’d offer them tea and coffee and find out what prices they were willing to pay. It was our first attempt at market research.

There were thousands of Australians wanting to get home every year. We managed to find some pretty big discounts: I had a friend called Varjee, who was the Air India manager in Denmark. He sold Air India tickets out of Frankfurt, Paris or Amsterdam £100 cheaper than you’d pay in London. People would buy tickets to Australia and go via India. So we would put them on a coach or rail service for £50 and keep the difference. This rapidly caught on among the Earls Court Australians – they told each other how to pay less to get back to Perth or Sydney. We made £20,000 before Air India caught on to the trick and put a stop to it by offering a London-Bombay-Sydney route with a two-hour layover. They only discovered this situation because Varjee’s sales were 300 per cent higher than usual, while everyone else had lost out, including Air India’s General Sales Agent in London.

We made hay while the sun shone. And it was ironic, in a way, that I started out in business selling airline tickets back to where I was born in Australia, 10,000 miles away.

Making money as a travel agent means constantly seeking out these type of deals, where you can get a reasonable margin. It was no simple matter, however. As an Indian, I wanted to sell to the Indian community, but the Indian, Bangladeshi and Pakistani market was already catered for by greengrocers in places like Southall, where they were only concerned about cashflow – they would sell air tickets for as little as 50p profit, whereas I was looking for £5 minimum.

Then I thought: “Why am I going for Indian customers who are 2 per cent of the population, when I could be going for the other 98 per cent? Why not go for English people who want to travel the world?” Suddenly the margin was £20 and I was much happier.

There was a similar problem with European holidays, because of a price war between Thomson, Airtours and a few other operators. You could get a week’s holiday with full board in Spain, including flights, for £25. Travel agents would take 10 per cent of this, meaning they’d get just £2.50 for selling a holiday. It was impossible for a small agency to survive on this. So I focused on the long and mid-haul business instead, which had higher margins and wealthier customers, mainly flying to Australia, the Far East and the United States.

The Association of British Travel Agents (ABTA) offered me membership for £1200 a year and my initial reaction was to tell them to take a jump. Then two or three people came in and asked “Are you members of ABTA?” and when we said no, they left. So we looked at the terms they were offering and saw that we were paying 3 per cent interest on our credit card payments, whereas ABTA had a deal with a credit card company offering 1 per cent. We were such a small team in those days, Tani and I did almost everything, even the accounts. So we joined ABTA and within two months we’d earned back the membership fee, looking after the pennies.

We had some scary moments too. One day a guy asked me for 25 return tickets to Hong Kong, costing £15,000. He offered me half the money and promised the rest later. We gave him the tickets but never received the balance. This loss meant we were so close to bankruptcy that I chased him all the way to Miami, where he offered to let me stay on his boat, but still didn’t pay us what he owed. It took me days of pursuing him, wearing just the clothes I’d flown in, before I managed to get the money from his bank.

Another time, a well-dressed Indian gentleman with a trimmed white beard came in and paid £900 for a ticket to the United States. When he came back the next week, I took him out for dinner. He asked for a ticket for his daughter and promised to give me £900. But he vanished and I discovered that he was a wanted man: Interpol were looking for him. After that I told our consultants that if they ever offered credit, I’d take it out of their salary.

Very early on, we invited a friend’s wife to come and work with us. Things were going really well, we were making money and she became an important part of the team, but after 10 months she announced she was going to a larger firm in the West End. Our world fell through, we couldn’t believe it. But as time went on, we built it into our psychology. We didn’t like people leaving, but it didn’t hit us so badly as that first time.

After we’d been trading for a while, I had a visit from our landlord’s agent. He was very friendly and we chatted for a while. He asked how our business was doing and I was pleased to tell him that it was going well. “We’re making quite a lot of money,” I told him. Big mistake! A few days later I received a letter informing me that our rent was going up by 100 per cent. All I was doing was telling the truth. That was a lesson in being more cautious, when dealing with landlords.

One of the biggest prizes in travel in those days was to be appointed General Sales Agent for an airline. I was desperate to get the GSA job for Air India and when the 1984 Indian general election, caused by Indira Gandhi’s assassination, brought her son Rajiv to power, I thought the new government could give me a chance. So I decided to sell Air India tickets at the same price as the GSA, but without the commission, which meant we made no money. Air India did indeed sack its GSA but didn’t appoint me! That was another disaster.

Instead of Air India, I got a privileged contract for discounted fares with Malaysian Airlines in 1984 and then won the GSA position for Royal Nepal Airlines (RNA) in the same year. A few years later, in 1993, the Nepalese gave me responsibility for the whole of Europe. This was a big step up. It meant that I was responsible for all of the airline’s flights out of London, Frankfurt and Paris; and I could appoint my own GSAs in each of 12 different European countries, to support RNA’s sales and marketing efforts. This turned out to be a great asset in the future, when I wanted to acquire agencies around Europe.

On top of the Royal Nepal job, I was appointed GSA for Air Botswana, which could then treat my office as its London base, Zambia Airways and Air Tanzania. These came along mainly through personal contacts: I knew the lady in charge of Air Botswana, I played golf with the manager of Zambian Airlines and I’d travelled many times to Dar-es-Salam in Tanzania, so I spoke to the Airline bosses and persuaded them to fly into Gatwick.

GSA jobs were highly prized. You had a kind of monopoly on flights on the airline, because you could offer discounts that weren’t available to anyone else. You get the distressed inventory and can undercut rivals. The agent who had the Air India GSA job was making upwards of £1 million a year from it.

Some people would resort to incredible tactics to win GSA contracts. I heard of a case where the Philippine Airlines GSA was set up by a rival with a call girl in London. The rival secretly filmed the encounter, unsuccessfully tried to blackmail him and then sent the tape to the airline. The airline stood by the GSA and refused to sack him: in fact they praised him for refusing to be blackmailed.

When there was a change of government in Nepal, the new aviation minister cancelled my contract and announced a new GSA. This was devastating news to me, so I went to see the son of a former Indian Prime Minister and asked for help. He knew the Nepalese Prime Minister and said he’d try and sort it out for me. To secure the contract I needed to find £80,000, which was way outside my budget at the time. Then on the way out to Nepal I stopped in Dubai and bought a lottery ticket in the airport for $140 for the chance to win a new Mercedes SE 500 costing £52,000. I won the car and they offered me £47,000 in cash. Then I borrowed the rest of the £80,000 from my father and father-in-law and we kept the Royal Nepal contract for another couple of years, until the Communists took over Nepal and we were all kicked out.

We didn’t leave without a fight, however. I had taken on an office to service the airline, so I sued the Nepalese authorities in Paris at the Court of Arbitration. I held back £2.8 million in payments and engaged the law firm Herbert Smith to represent us (which cost us £1 million). If we’d lost the case it could have bankrupted us.

Our relationships with the airlines changed over time. At first, when we were starting out, I felt that airline managers looked down on us: their attitude was that agencies needed them, not the other way around. But after a while, we grew to such a colossal size, we were more on their level: we could relate to them and agree deals with them.

The bigger you became, the better prices you would be offered. Trailfinders was much bigger than us at the time and the airlines would offer them special deals, say reducing a £1000 fare to £400. Some agents would operate as ‘consolidators’, meaning that they could sell tickets to a large pool of other agents, getting themselves higher discounts, maybe 50 per cent off the standard fare. After a while, I knew all the consolidators.

Of all the other agents, Mike Gooley of Trailfinders was the one I looked up to most. He was way ahead of us during the first 18 years of my career as an agent, from 1980 to 1998. He still makes £25 million a year and owns the whole company 100 per cent. He’s now in his 80s. Mike also started in Earls Court, but 10 years earlier, after a career as an SAS captain trekking through the jungles of Borneo and the deserts of the Middle East. Like me, he went to a Jesuit boarding school which taught him that his word is his bond. In business, that has been a great asset to us both: Trailfinders has a tremendous reputation for treating its customers properly and standing by its promises. It puts people’s deposits in a trust account and doesn’t touch it until they’re back from their holidays, unlike many tour operators who use deposits to fund salaries. He has a very good sense of how to survive in the volatile and unpredictable travel business, based around customer service. In an interview published in May 2019 he warned that tour operators who buy airlines often put themselves in danger. Four months later, Thomas Cook – the world’s oldest tour operator, with its own airline – collapsed into bankruptcy, prompting the largest peacetime repatriation exercise in British history.   

Apart from Mike Gooley, I always watched the progress of people like Freddie Laker, whose Skytrain budget airline went bust in 1982, soon after I started Flightbookers, and Richard Branson, who continued where Laker left off. Branson was like a cat with nine lives: selling Virgin Records for billions, his debut flight having a bird strike which cost him £600,000, British Airways pulling out all the levers against him, getting a massive investment from the Middle East and Singapore Airlines. 

Entrepreneurs like Branson will always try to push the envelope with employees, to make them better, rather than become like the civil service. If you’re working for the government, there’s no penalty for making mistakes, no learning, because an older person always makes the decisions. There’s no financial incentive or promotion prospect for doing anything different. Having come from IBM with its ‘you’ll never get fired…’ motto, that was the opposite of the attitude I wanted for my company. I think the United States is the best example of entrepreneurship: they don’t mind if you go bankrupt, as long as you’re honest. You’re promoted to the top if you’re good and killed if you’re bad. It’s the purest form of capitalism, but it’s reached its limits now because Trump’s given it a bad name. Capitalism has to grow old and die, like a person, I guess.

Some of the airline owners in the 1980s and 1990s were pretty thick. Some were intelligent. As an agent, we thought the Far East carriers like Singapore Airlines or Cathay Pacific were very good. Then later the Middle Eastern carriers like Emirates and Etihad became very good. None of us thought very highly of the UK, European or US airlines. Qantas was a good airline. One day my friend Firdaus Ruttonshaw flew first class from Sydney to London (with a stop in Bahrain). As he left the plane in London, he was given a voucher for £200. They said: “We upgraded two people from business to first class, so we deemed that everyone in first class should get £200.” Similarly, on Singapore Airlines another friend asked for a newspaper and when they brought the Daily Telegraph he turned straight to the sports pages. A few minutes later, the hostess came along with three more papers, all ironed (so that the ink doesn’t come off on your fingers) and turned to the sports pages. 

Personal relationships were important all the way through this period, as we built up Flightbookers. In 1993 I joined a group called the Young Presidents Organisation, which introduced me to dozens of people running businesses all over the world. I’d go to academies and universities, picking up ideas and discussing problems and opportunities with people. To get to know my peers, I joined the Travel Industry Golf Society (TIGS), which was very difficult to get into – they had a ‘one-in-one-out’ policy, but because I was a bit above average as a player, they let me in. Golf is a very good way of getting to know someone. You get three or four hours with them, then a drink afterwards. You learn a lot from the way they do things.

Tani and I would go on ‘familiarisation’ trips, basically holidays organised by the airlines or by national tourist offices. These were ostensibly for travel agents to find out about places, so they could sell more flights or holidays – that was the official purpose – but they were also a good chance to meet other agents and find out what they were up to. There would be 10 or 12 agents from the UK; this made it easier to communicate with them.

It was a nice way to combine business and pleasure. We went on trips to Tanzania, watching the animal migration in Arusha, then visiting the Ngorongoro crater – the ancient caldera of a massive volcano, 12 miles wide, with an ecosystem of lions and Masai tribespeople armed with sticks to protect themselves. In the Serengeti Game Park, on the border with Kenya, we saw lions walk up into a tree and go to sleep. And nearby in Lake Victoria there were thousands of pink flamingos.

To survive as a travel agency you need to build up privileged relationships with the airlines, hotel and car companies, so that they offer you ‘merchant’ fares which translates to discounts of up to 75 per cent off standard prices. Travel suppliers only grant these fares to people they can rely on, so I had to meet them all and gradually build their trust.

After 15 years of running Flightbookers, I was finally offered a merchant deal with British Airways in 1995. Tani and I were on a familiarisation trip to Queensland in Australia and got to know the BA person. We were staying in a floating pontoon over the Great Barrier Reef, which was a tremendous privilege. Getting that contract was quite good for our profits and our business.

Tani was 100 per cent employed in the business, looking after the administration while I had more of a helicopter view and was the public face of the company. She had a keen eye for anything that wasn’t right. For example, one time she found that a cheque hadn’t been banked, but had been filed away instead. So she decided to look through the last six months of documents and found cheques worth thousands of pounds. I think it’s always good to have a woman’s point of view in a company.

Everyone reported to Tani except for my PA and the Finance Director, who reported to me. It was a joint effort and the business definitely benefited from having both of us. She was much more down to earth than me and more risk averse, which saved us many times. The sales side was more down to me, and ticketing was her side. She would say: “Let me run this, because it gives us our profits. We don’t know what’s going to happen.”

Early in our business career, I bought a 1962 Rolls Royce Silver Cloud II for £6000, which wasn’t a very down to earth decision, but I persuaded Tani it was a worthwhile deal. Nobody in the UK wanted such enormous gas guzzling cars at the time, after the 1970s oil crisis, so I decided to take it to Hollywood in California and sell it for a profit. I shipped it across the Atlantic to my cousin in San Francisco and agreed to exchange it for a Los Angeles travel agency called Happy Bookers, owned by the 1966 Olympic pole vault champion Bob Seagren and his wife Kam Nelson. In the end she ran off with another man and the deal fell through, so I sold it to a budding actress. The lesson is, if you try something like this, you generally don’t make any money.

Tani’s parents were very helpful to us in those days, when we were madly busy with the business. Her father sent a Gurkha soldier to help us and her mother came to look after our baby sons. In 1983 we were stuck in Delhi airport, trying to fly back to London and Air India wouldn’t let us onto the flight, saying it was fully booked. We were sitting there for three hours before the chap who was looking after us got up and said “I’ll come back”. He disappeared into the Air India office and straight away the manager came running out with our boarding cards. I asked him how he did it and he said he told them: “Mrs Dhamija is the daughter of the governor of Punjab.” I would never have done that, having been brought up in England.

We sent our boys to private schools in London from an early age, first to a Montessori school on Kensington Gore next to the Royal Albert Hall, then to St James School in Queensgate, then Wellesley House boarding school on the Kent coast in Broadstairs and finally to Harrow School, one of the top private schools in the country, where Winston Churchill and Jawaharlal Nehru studied. It meant that we could concentrate on building the business, it gave them a good English upbringing and helped make them both gentlemen, who would never try to jump the queue by dropping names in an airport.

So let me drop some names on their behalf. When they were at Harrow, they were friends with two Thai princes called Vacharaesorn and Juthavachara Mahidol. Their father was Crown Prince Vajiralongkorn of Thailand and their mother was an actress called Sujarinee Vivacharawongse, who was the king’s consort for 18 years. Together, they had four sons and a daughter, despite Vajiralongkorn being married to Soamsawali Kitiyakara (his first cousin) at the time.

One day, the boys’ housemaster at Harrow rang me and asked if the princes could come and stay at our house over the school holidays. This was fine with me, although I thought it was a bit funny, because normally royal children would stay with the Thai ambassador. Later we found out that Vajiralongkorn had disowned the boy’s mother and her children, taken away their diplomatic passports and royal titles and accused her of having an affair with a 60-year-old Air Marshal. The family all had to go and live in the States, so that was a shame, but my sons stayed in touch with them. Vajiralongkorn was crowned King of Thailand in 2019, three days after marrying wife number four, having survived a scandal some years previously where he was pictured in a video cavorting with his topless third wife, celebrating the birthday of their pet poodle Fufu, which had been granted the title of Air Chief Marshall of the Thai Air Force.

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I never read books about entrepreneurship or dealmaking, I just fell into running a business because I wanted to put food on the table and was pushed into a corner. But once you set up in business, you find out that the freedom is very rewarding and enjoyable. As Steve Jobs put it, it’s more fun to be a pirate than to join the navy. Between us, Tani and I worked out our strategy for the future, with her doing the administration and me as the statesman.

Sometimes we’d stumble across new ideas, or inspiration to grow the company. In 1994 we were on a trip to Tokyo and on a bus, talking about our strategy for the next year, whether we should increase our profit target by 20 per cent or 40 per cent. An American stranger across the aisle from us said “Have you tried 100 per cent?” I didn’t think that he knew my business – he made gears for planes – and I told him it wouldn’t work. But when we got back to our hotel room, I thought: “Why not go for 100 per cent? It’s a stretch, but we can do it.”

So we reduced the desk size per person in our office by 60 per cent, so we could fit more people in, bought computers and put the screens inside the desks, under a glass cover, and the servers underneath, which gave us more room and our staff could see whoever came to meet them. Then we introduced a sliding scale of bonuses for sales commissions: 3 per cent for flights, 5 per cent for car hire, up to 9 per cent for hotels and insurance, because we made more on those than on the flights. We started automating our processes. And at the end of 1995, we’d made 40 per cent more sales and 60 per cent more profits. That was a good result for Flightbookers and something we’d never have achieved if it weren’t for a stranger on a bus in Japan.

Although it might seem like a minor event in the whole story of Flightbookers and ebookers, Tani and I both look back at this event as a business epiphany. As Tani remembers it, the encounter meant that our thinking changed completely. “It got us out of prison, we began working towards this target of 100 per cent growth, we started growing much faster, our margins rose,” she says, thinking back. “When our growth reached 60 per cent, airlines started coming to see us, we were taking market share away from other agencies. It really expanded our thinking.”

Despite this rapid growth, we always had to keep a careful eye out for fraud. At one time, we had customers who would ring our office in Tottenham Court Road and make a booking on their American Express card, usually for business or first-class tickets. They’d promise to come in and pick up their tickets. Our staff hadn’t asked these customers had to sign a form and show the card they’d used for the booking, as they should have done. Altogether we lost £25,000 on cards that were unauthorised by Amex and they refused to refund us any more than £8,000. We had to fire the people who took these bookings, because we were worried they were part of a conspiracy (and in any case, they hadn’t followed the right procedures).

It was just at this time that I started looking in earnest at various new business models. Automation was one possibility: computer systems were becoming more sophisticated and replacing or easing the arduous back office work of filing and storing documents, managing accounts and dealing with payroll. We invested in the latest software to reduce costs and improve efficiency, but there was a limit to what this could achieve.

Some large companies were establishing call centres in Eastern Europe and the Far East, including India, which appealed to me, but we weren’t large enough to benefit from this, and initial feedback was poor: British people couldn’t understand Indian accents and the technology was unreliable.

Then I started to hear about a new invention called the internet, which academics were using to transfer documents to one another. You had to plug your computer into a phone socket and wait until a little box stopped squeaking and then you might be able to see some green writing on a black background, with lots of symbols like >>>>> and ///// and words that meant nothing to you like DOS and HTML.

Most people that I spoke to thought it was rubbish. They decided it was a waste of time and would never catch on.