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17 Aug 2018

BY Jennifer Morris

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TRFBLI

Do agents need more online convenience in this sector?

The last time I speculated in this column about the reasons behind a surprising travel acquisition I landed myself in an awkward spot of bother with the buyer.

 

Derek Jones Opinion
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Kuoni chief Derek Jones gives his take on On the Beach's acquisition of Classic Collection

It was my good friend John Hays who’d just bought Bath Travel, and I’d suggested the two brands were not a natural fit. In my defence I did go on to say that if anyone could make it work it would be him – and on that count he has gone on to prove me right. I think John has forgiven me.

 

Looking back at that deal now it’s clear why the Hays approach to retailing applied to a geographically complementary store network has been a real success story. Hindsight is all well and good, but John had the foresight to see the opportunity and to invest in high street expansion when most others were moving in the opposite direction.

 

I was reminded of this when I woke up to the news yesterday that On The Beach had acquired Classic Collection. My first reaction was that this must have been the result of a late night drinking game that had somehow got out of hand. If not that, then someone, somewhere had a cunning plan and I needed to work out what it was.

 

In recent years, On The Beach has grown to become one of the UK’s leading online retailers of beach holidays – one of the big success stories in the travel industry. In its own words it’s “grown from humble beginnings in 2004 as a start-up business in a terraced house in Macclesfield to a 2015 listing on the London Stock Exchange and over a million customers”.

 

For Classic Collection, the story is quite different. Established in 1980, it has built a stable B2B business by delivering personal service. As the operator itself puts it: “With detailed knowledge of our hotels and resorts, our reservations team can book interconnecting, family-style, specially adapted, and ultra-luxury rooms and suites; whilst our free concierge service is available to help create a bespoke holiday, completely unique to you”.

 

These are the ying and yang of travel selling. One is online, the other is offline; one is B2C, the other is B2B; one says ’tomayto’, the other says ’tomarto’.

 

So this isn’t a straightforward synergy (sorry, hate that word) opportunity – there must be something else going on here.

 

The success of Jet2 (and in particular its Indulgent Escapes brand) may well have been the key driver behind this move. The clue, I think, lies in the planned launch of an online agent booking portal – Classic Online – blending the bespoke, luxury heritage of Classic Collection with the efficient, online search and book functionality of On The Beach. So, in the short term, travel agents will hold the key to the success of this venture.

 

Do agents need more online convenience in this sector, or do they need more bespoke offline expertise? I’m not sure.

 

As with Hays and Bath Travel, only time will tell. But right now, On The Beach is offering a week in Majorca for two people in October, for £344.

 

At Classic Collection, they spell it ’Mallorca’.

 

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