Shaun Morton, chief executive of On the Beach Group, which acquired Classic Collection in 2018, told TTG the B2B brand could increase passenger capacity from a current 30,000 to 40,000 to more than 100,000. Classic’s Atol is currently for just over 30,000 annual passengers.
“I see no reason why the business can’t be more than twice the size it is now in the short- to medium-term,” said Morton, speaking to TTG shortly after the group posted its full-year results for the year to 30 September, which revealed Classic’s total transaction value (TTV) increased from £28 million to £40.6 million.
Classic’s revenue, meanwhile, increased by a third to £8 million, with the majority of bookings coming from repeat customers, while earnings before interest, taxes, depreciation and amortisation (Ebitda) rose to £1.7 million.
Morton insisted Classic Collection would "continue to be an important part of the business". "I expect it will deliver a meaningful amount of profit to the group," he said, albeit while stressing it would remain a minority element of the group’s business, with the group primarily focused on its direct-sell four- and five-star business.
On the Beach Group acquired Classic Collection Holidays in 2018 and split the brand into two separate strands – a full-service tour operator, retaining the Classic Collection Holidays name, and a self-service agent portal called Classic Package Holidays.
However, On the Beach began reversing this decision earlier this year and set about restructuring Classic Collection around a single trade-friendly operation. Tuesday’s trading update revealed it had discontinued the tour operator brand and rebranded Classic Package Holidays as Classic Collection.
Completed in mid-June, Classic said the merger had helped streamline operations, given agents more product choice and increased flexibility for them – including the ability to set their own commission rates.
Spearheaded by Si Morris-Green, On the Beach said the newly reconstituted B2B brand had benefited from tech and product investments at group-level, including a partnership with Ryanair, which allows the more than 3,000 agents selling Classic to package Ryanair flights.
It has also set up a dedicated contact centre team to service all bookings with Ryanair flights to ensure agents and their clients get the information they need in real time. Morton said Classic now had a "significant opportunity" to become "the go-to B2B provider of Ryanair packages".
“We started to see some good uptake [from the Ryanair deal] as around 20% of Classic Collection holidays now include a Ryanair flight,” Morton told TTG. “And I expect that to continue to increase.”
He added: “We’re investing in the supply so every time On the Beach expands its proposition, Classic Collection gets access at the same time."
