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Equity vultures hungry for OTAs
Rob Gill. PRIVATE EQUITY firms are still circling online travel agencies in search of a deal, according to the boss of Directline Holidays. There has been speculation in recent months
that Directline is up for sale, but chief executive Maria Whiteman declined to comment on any potential sale of the business. “Equity houses have had a poor year, and now
they are thinking they can get companies for a good price,” she said. “We are approached regularly, like all other online travel agencies.” Regardless of any potential takeover,
Directline – based in Croydon, south London – is focusing on growing turnover by 30% next year. This year’s turnover came in at £60m. “We believe that a 30% increase in turnover is achievable,” said Whiteman. “Everybody is saying the market is going to be flat in 2011, but that’s almost irrelevant to us because we will be focusing on what we can do better.” Directline, which sells through a call centre and website, has built its business
largely on coming top or very high on Google searches for key travel destinations. Whiteman said the agency had managed to
protect its margins despite a tough year in the travel industry. “We get our customers very cheaply through
search engine optimisation,” she said. “A lot of competing OTAs have had to be aggressive and chase revenue, but we have concentrated on keeping our margins.”
She said Directline had main- tained margins by renegotiat- ing targets with key suppliers and cutting back on pay-per- click advertising. “We are definitely not going to get into blanket discounts – I just want the profit growth,” she added. Directline is now concentrating on
Whiteman: Directline is approached regularly
improving conversion rates and retaining visitors, with a new customer relationship management system being installed before the end of the year.
Gapyear.com to be agency driver
FLIGHT CENTRE will use its new purchase,
Gapyear.com, to drive customers into its high street shops and improve its “social networking capabilities”. The Australia-based company said it wants the
UK-based website to encourage students and others to book their gap-year travel at its agencies. It purchased 80% of
Gapyear.com earlier this week for an undisclosed amount from founder Tom Griffiths, who will retain a 20% holding in the company. Flight Centre marketing manager Colin Bowman said: “By acquiring
Gapyear.com, we have the chance to increase our market share globally within this growing travel sector.
16 22.10.2010 “We aim to cost effectively generate travel-
related enquiries for Flight Centre’s retail travel brands. “This will be in the UK initially, and then elsewhere as we develop the brand.” Bowman added that the company hoped to continue generating advertising revenue from the website alongside the building of
Gapyear.com’s profile in its key markets outside the UK. Griffiths will continue to run the website and
will report to Chris Galanty, Flight Centre’s UK executive general manager.
Under the terms of the deal, Flight Centre has the option to acquire the remaining 20% of
Gapyear.com that is still owned by Griffiths.
Directline comes high on Google searches for holiday locations “This will provide us with a single view of cus-
tomers who have booked with us before and what their searches are,” said Whiteman. “We are going to be more proactive in retaining customers and building long-term relationships with them.” Directline currently gets two million web visi-
tors a month, but Whiteman admits conversion rates are lower than through other channels. The company has appointed its first e-commerce director, John Lucas, to lead the drive to retain customers. This could include the company’s first move into display advertising. Directline is looking to improve its long-haul dynamic packaging offering and plans to inte- grate JTA and Major Travel as flight consolidators. It is also in talks with long-haul bed banks. Niche operators such as Longwood Holidays,
Sunvil and Serenity are also being made available on Directline’s website.
Southall Travel on Top Track 250 list
A PRESTIGIOUS list of UK private companies features just one travel agency – Southall Travel. The Sunday Times HSBC Top Track 250 lists
the UK’s biggest mid-market private companies. It placed Southall, which also owns long-haul flight consolidator The Holiday Team, at 148. Southall Managing director Kuljinder Bahia said:
“This is our first time in the Top Track 250 and I’m proud to be the only travel agency. Conditions have been difficult this year, but we have innovated through online marketing, new technology, call centre productivity and a broader product range.” Other travel firms on the list include Holiday Extras and Center Parcs.
020 7921 8011
rgill@ttglive.com
Rob Gill
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