‘Unprecedented opportunity’ awaits holiday group after Covid-19 crisis
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Holiday group On the Beach slumped to a £47m loss after the summer season was badly hit by Covid-19 cancellations and fewer bookings.
However Simon Cooper, the chief executive of the Manchester-based business, said it is “well placed to capitalise on the inevitable structural changes in the market post Covid-19”.
The group believes “there is an unprecedented opportunity to significantly increase market share over the medium to long term as demand returns”.
The timing of that return remains uncertain. Holiday bookings typically peak in January for travel from March to September, but On the Beach said booking volumes and the timing of the peak “will be significantly influenced by the evolution of the COVID-19 pandemic and UK and European Government policy in response to it”.
Bookings in October and November were “significantly below normal levels”, with the four-week UK ban on leisure travel a key factor in that period.
The travel industry had already faced challenges before the pandemic, with the collapse of Thomas Cook in September 2019 and airline Flybe in March.
Cooper said: “There is no doubt that 2020 has significantly impacted the entire global travel industry and that the effects of the pandemic will have lasting impacts on the way the industry conducts business for many years to come.
“The flexibility and asset light nature of our business model together with our recently strengthened balance sheet and the actions we have taken since the middle of March means we are well placed to capitalise on the inevitable structural changes in the market post Covid-19.”
On the Beach raised £65m in May through a share placing and had £51m in cash at the end of November, along with a £75m credit facility which is undrawn. The group’s monthly cash burn would be around £2m if it received no revenue.