A second purchase of a traditional tour operator by an OTA could follow in the wake of On The Beach’s acquisition of Classic Collection.
Speaking at Abta’s Travel Matters conference last week, Martin Alcock, director at the Travel Trade Consultancy, said he believed another online travel agency is looking to expand its distribution to the trade in a similar way.
“One large OTA is shopping for another Classic [Collection], to create a similar model,” he said, adding that On The Beach’s “intuitive system” was already impressing agent partners.
In an overview of the industry’s outlook in 2019, Alcock also said negative press surrounding Thomas Cook’s recent financial struggles was unfairly impacting other travel companies’ ability to borrow money.
“Companies have said, ‘we can’t get that through the credit committee because Thomas Cook is in the news’,” he explained.
“But their business models might be totally different to Thomas Cook,” he argued.
Alcock admitted “high streets have changed, probably forever” with banks, casual dining restaurants and fashion retailers worst affected by recent closures, but said high street travel retailers who offer an experience do have a future.
“Vape shops and bakeries have replaced those banks and high street fashion stores,” he said. “The transactional stuff has moved online, but the high street still has a place in providing an experience.”
Alcock predicted that further consolidation is to take place in the European aviation market, claiming similar evolution in the UK’s car manufacturing and grocery industries suggest consolidation is not yet complete.
Elsewhere, discussing easyJet’s ramping up of its tour operation, Alcock explained if the airline converts 25% of its 20 million passengers to easyJet Holidays, which is due to launch later this year, it would become the UK’s largest tour operator.