Winning combination wraps up the market in online gift vouchers

Sunday Herald, The, May 20, 2007 by Julia Fields

EARLIER this month, Kaye Taylor had what she describes as her first real adult business moment.

Taylor and Stephanie Wilson, owners of web-based gift voucher company SK Chase, were approached by a global hotel chain to roll out their software system throughout its 229 hotels in 49 countries.

It's the kind of deal that would have most emerging entrepreneurs jumping up and down in their living rooms shouting: "Yes, yes, YES!" But Taylor and Wilson, just a few years into their first venture, turned them down. Such a move could be deemed pure folly and chalked up to inexperience. Taylor, who prefers casual dress to a power suit and carries a backpack rather than a briefcase, has an air of youthful girliness about her that might support such a supposition.

But the 37-year-old is a shrewd enough operator to have already attracted the business of 200 luxury hotels, spas and golf courses across the UK, including Rocco Forte's Balmoral Hotel, The Scotsman Hotel, Gleneagles and Chancery Court Spa in London.

SK Chase is currently rolling out its gift voucher service across the entire De Vere Hotels portfolio, which owns The Carrick at Cameron House golf course and spa facility on the banks of Loch Lomond, along with 37 other properties. Turnover is on-track to hit GBP5 million for the year ended October 2007 from a staff of five.

"We said no because we believe we have so much to do in the UK that we don't want to take our eye off the ball and give a competitor the opportunity to come in, " Taylor says, sipping a glass of mineral water in Indigo Yard restaurant in Edinburgh.

"Steph and I are real opportunitygrabbers. But in this case, there were so many things to take into account.

Culture, language, resources: we didn't want to spread ourselves too thin. It was a unique experience. We had never said no to anyone before. It made me feel quite mature." SK Chase, whose online service enables hotels to create, sell and send their own branded gift vouchers to their customers, is in such demand that its owners have also turned down a takeover offer from a hotel services company. But with just a 12-per cent to 15-per cent share of the fourand-five-star market, Taylor has ambitions to achieve far more before selling out. "We're just scratching the surface at the moment, " she explains.

The company offers its gift experiences of weekend getaways, gourmet meals and countryside pursuits both through its own site and from the hotel websites.

For hotels, SK Chase supports the software application on its portal, processes all of the gift order transactions and prints, packages and dispatches the certificates on the same day on behalf of the client. It makes its money through commission on each transaction. With the UK gift voucher market worth an estimated GBP1.47 billion, there is a potential fortune to be made.

Originally, Taylor and Wilson thought their service would appeal only to the resource-restricted small hotel operator.

Formerly marketing manager and revenue manager respectively at the Town House Company, Taylor and Wilson first came up with the idea when they wanted to sell gift certificates online for weekend breaks at the Bonham and Channings hotels in Edinburgh. "It wasn't at all easy to set up. You needed online merchant status, a secure gateway, " Taylor says. "We realised that some small tourism businesses wouldn't have the resources to look into all of this, and that we could sell an online gift certificate solution for the tourism industry." Town House Company owner Peter Taylor who later became Kaye Taylor's father-in-law was an ardent supporter of the venture, allowing his two key employees to work part-time to pursue their dream. He also lent them GBP5000 towards initial start-up costs. "Peter believed it immediately, not everyone did. He sent emails out to all of his hotel buddies and said 'you should go with these guys', " says Taylor.

By December 2005, SK Chase had eight customers on its books. The first major break, however, came from Gleneagles.

The prestigious resort invited SK Chase to audit its online gift voucher system.

"We identified that we could save them 350 man-hours a year and increase gift voucher sales by 40-per cent. They had different systems to process gift vouchers for each sales channel, be it the web, telephone etc. They weren't able to track things like outstanding liabilities. We also saw when we were there that it was very time-consuming in terms of printing off the vouchers, packaging them up and sending them off, " she recalls.

SK Chase tweaked its system, developed in partnership with technology company Ezone Interactive, to solve all of those problems, and soon the business focus had shifted towards the larger hotels.

"We realised once we secured Gleneagles that we had got our target market wrong initially. The small hotels are great to have because they have unique, remote properties that our customers like to stay in. But they don't generate the volume of sales for us to make enough money.