is a natural fit – Cooper “Over that period our model has
been evolving, not least in terms of size and scale, as we built our own portfolio of more-exclusive, higher-quality beach holiday product and we became more package-ready. “If I put myself in the shoes of the agent, they want to access the stuff their consumers are wandering in and asking for. It won’t be all the boutique five-star product, but it also won’t be the lower-end two-star. “Classic Online will be a three or
four-star value-for-money offering. There will be a clear differentiation with Classic, which will continue to be exactly what it is today. “In the background we will
build a portal to allow access to short-haul mainstream beach product.”
Looking back
Before tighter Atol rules were introduced in 2012, the online travel agent model was controversial, with many traditional agents and operators complaining OTAs were breaking the rules. The change in the rules, which
brought in ‘Flight-Plus’ packages, meant OTA sales were covered by the rules although they faced a less rigorous regulatory regime than full package operators. However, new UK Package
Travel Regulations, prompted by the revised EU Package Travel Directive, that came in in July and underpin Atol, abolished Flight-Plus and made all firms selling packages equally liable for the product and financial protection. In 2011, On the Beach agreed
what was then a pioneering deal with the CAA for an OTA when it acquired its first Atol licence, enabling it to officially sell packages, with customer money paid into a trust. Since then it has grown its licensable business to in excess
of 1.3 million passengers a year, making it the UK’s fifth-biggest Atol-holder, behind Expedia and ahead of Love Holidays and BA Holidays. Classic Collection’s Atol licenses it to carry 34,347 passengers a year. Cooper said the focus was now on building the Classic Online B2B portal in time for a launch in early 2019. After that the firm will look at what back-office synergies there are and how both firms can benefit from what each other has. Cooper said he expects the
B2B nature of Classic Online to encourage agents once hostile to an online competitor to do business with the new On the Beach division. “If I’m a travel agent and I flip
my screen around to show the customer a holiday from another provider I know they can go on their phone and look at what prices they are offering in their B2C channel. “One of the benefits of being agent-only is it will not be accessible to the general public.” Cooper said On the Beach would assess further possible acquisitions if they are “value enhancing and fit with our strategy”. “Clearly
we would not look at doing things in parallel, but if
something came across my desk that looks exciting, I will look at it to see whether it’s a goer or not,” he said.
Simon Cooper: ‘One of the benefits of [Classic Online] being agent-only
is it will not be accessible to the general public’
23 August 2018
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