ns forum was held in Google’s London office. Lee Hayhurst reports
Love Holidays was keen to sell ahead of ‘choppy waters’
A former chairman of Love Holidays said the online travel agent had been keen to complete its sale before the summer due to the possibility of “choppy waters ahead” in the market.
Love Holidays was sold in May to
private equity house Livingbridge, which formerly owned rival On the Beach, for £180 million. Roger Flynn said the process of
selling the business was almost a year in the making and the OTA had spent a lot of time and energy preparing for the outcome. “We were fortunate in that
there is a lot of appetite for travel businesses,” he said. “Private equity has done very
well from travel by and large. “We were very keen to get the deal done before the summer. Who knows what will happen between now and 2019? There could be some choppy waters ahead.” However, Flynn said Love Holidays had continued to
“We were keen to get the deal done. Who knows what will happen between now and 2019?”
outperform expectations, and described achieving a £180 million valuation in just six years as “pretty good going”. Flynn said the attractiveness of
Love Holidays to investors was its differentiation, but he said the firm had looked to “fly under the radar” in the early days. “We did not want [competitors]
to find out about us until it was too late,” he said. “Love Holidays looks at holidays differently to the rest of the market. “We started with what kind
of holiday do you want. That’s easy to say, but technically very difficult to pull off.”
FLYNN: ‘The sale of Love Holidays was almost a year in the making’
Flynn said trade interest in
Love Holidays “fell by the wayside” as the valuation rose. “Private equity is prepared
to pay more than a lot of trade [buyers]. You have quite a lot of trade players who would be interested if Love Holidays was bigger and more international. “Expedia would love a short-haul beach brand, but not one just in the UK.” Flynn added that floating via
an IPO (initial public offering), as On the Beach did having been sold on to Inflexion by Livingbridge, was considered too great a risk for shareholders.
‘Private equity helps attract good executives’
Private equity can help the businesses it buys attract the right calibre management, according to a new investor in travel. Apiary Capital sealed its first
investment in April when it bought The Appointment Group and installed Steve Barrass, formerly of dnata Travel, as chief executive. The firm, a corporate
travel specialist in the music, entertainment, film and media industries, has a fund to pursue a
BOYD: ‘Hard for owner-manager firms to attract quality managers’
buy-and-build strategy, said Apiary partner Nicki Boyd. She said. “It’s hard to attract quality managers like Steve if you are an owner-manager business.” Great Rail Journeys chief
executive Peter Liney agreed with Boyd. He said he was delighted when owners Duke Street brought in former Thomson boss Charles Gurassa as a non-executive, adding: “He asks challenging questions, but is not trying to do your job.”
Roberts: Invest more in creative to reap real rewards
Travel brands need to invest more in advertising creative to see a real return on investment (ROI). Ruairidh Roberts, Google’s industry head of travel, cited Neilson research, which indicated 50%-80% of return on marketing expenditure is down to the creative. Roberts showed two Mercedes
car adverts to illustrate his point. The first was a conventional,
“vanilla” creative, with the vehicle seen driving on mountain roads. The second ad, which featured
a small child wearing hand-me- down clothes, was developed after the impact of the first was analysed. Roberts said the latter drove 500% better brand uplift on YouTube, where the videos had been uploaded, than the first. “Creative really drives ROI,”
said Roberts. “It creates emotional attachment and tells the public what it really stands for and why.” Roberts said Google data
showed that of five leading travel brands, only one had seen a significant uplift in brand impact over recent years. He did not name the other
brands, but revealed On the Beach had outperformed the others. “They have invested cleverly,”
Roberts added. “The rest have all gone through a merger or acquisition since 2004, but you see little change in brand recognition. “Investors are looking for ROI,
so investing in good creative is clearly one of the ways to do that.”
ROBERTS: Says On the Beach has ‘invested cleverly’
8 November 2018
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