Ripe for
consolidation I
WebBeds’ Nigel Horne
t has been a busy time in the wholesale sector in the past year or so, with some major deals cementing the hold of the big two players in the market, one that also boasts a thriving number of independent brands and recent entrants. Two giants, Palma-based Hotelbeds and Australia’s Webjet, head this sector. Below them are a host of other major players in a league ripe for consolidation – one that is attracting interest from outside investors as well as within. Proof of this came in 2016, when market leader Hotelbeds was acquired from Tui Group for €1.2 billion by private equity firm Cinven and the Canada Pension Plan Investment Board. The deal provided funds for acquisitions, with Tourico Holidays bought in June 2017 and GTA, its accommodation, transfers, tours and activities arm, in October last year. Hotelbeds now boasts annual sales of 47
million room nights, claiming to be the global leading bedbank and number one cruise handler worldwide. Hotelbeds is “more than five times our size”, according to Nigel Horne, chief executive, Europe, of Webjet’s
B2B brand WebBeds. This
admission comes despite Webjet’s
66 wtm insights autumn 2018
Travel wholesaling is a sector that often falls under the radar, but that’s changing fast, says Gary Noakes
£200 million purchase of JacTravel in September 2017, which added an aggregated 170,000 hotels plus another 17,000 directly contracted. The pivotal deal cemented WebBeds into the second place B2B slot globally, but there is still clear water between the two giants. “Unless there is some major acquisition, we don’t see us getting close any time soon, but equally there is a gap between us and number three. We intend to make that gap bigger,” says Horne.
It is unclear which company can lay claim to the third-place spot as many are private companies that do not publish figures, but meanwhile, Webjet is keen to grow its B2B business in an expanding market: “The wholesale sector I think will grow because specialism is increasing in the industry,” he says. He cites WebBeds’ deal with Thomas Cook, which will see it contract all non-branded Cook properties in 2019. “ A few years ago, no one would have said a vertically integrated tour operator would have done that. There are other examples – we have smaller-scale deals with Eurostar and Trailfinders. We will see people focus on distribution and come to us for procurement.”
Market giants Others are in agreement that the sector
is growing and a target for consolidation. Travco UK remains family-owned despite a £200 million turnover and sales of more than two million room nights in 2016. Samuel Remy, global sales manager, says the market is not without difficulties despite this success: “We have two big conglomerates in the game – we are fighting against monsters.” He predicts “some minor mergers in the next few years’, but adds: “Travco won’t be part of it. We are pretty much
wtm.com
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