Online holidays operator sees green shoots of recovery as pandemic restrictions ease
Consumer confidence is returning to the travel industry, Manchester-based online holidays group On The Beach said today.
In a trading update ahead of its annual general meeting, it said, after 18 months of COVID-affected trading, On the Beach experienced green shoots of recovery at the start of the current financial year.
Group sales for October 2021 exceeded the comparative month in 2019, carrying forward the positive momentum from September 2021, driven by the easing of international travel restrictions and the success of the group’s free COVID test promotion.
Sales since the start of the financial year, including the period affected by Omicron, are down two per cent versus 2019 (up 389% vs FY21), however, over the last four weeks group sales are up 50% against 2019.
The group’s cash position as at February 23, 2022, was £19m, which reflects significant investment in funding low deposit schemes and offline marketing. This figure excludes £61m of customer prepayments held in trust. The group also has an undrawn £75m credit facility.
Planned short haul airline capacity to On the Beach destinations for summer 2022 has recently surpassed capacity for summer 2019.
As a result, the group also expects to see a substantial lates market, with competitive prices for both flight and hotel inventory supporting the ongoing recovery.
Early bookings for summer 2022 have been stronger into higher value, more premium hotels, particularly for destinations in the Eastern Mediterranean and the actions taken during the pandemic have positioned On the Beach well to take share of these early bookings.
Despite ongoing restrictions for some destinations, the group’s long haul offering continues to make good progress. Long haul sales in the year to date are up 349% versus 2019 and now account for nine per cent of group sales, compared with two per cent in 2019.
The Group’s B2B businesses, Classic Collection and Classic Package Holidays, traded well prior to Omicron and, despite the lack of B2B footfall throughout December 2021 and January 2022, total B2B sales in the year to date are up 35% on 2019.
Chief executive, Simon Cooper, said: “After what has been a very difficult time for the travel industry, it has been incredibly pleasing to see consumer confidence and demand return in line with the loosening of travel restrictions in the UK and our destinations.
“The group’s proactive actions taken throughout the pandemic have led to increased group sales in the higher value 4 and 5 star hotels, particularly for holidays to the Eastern Mediterranean.
“Our sales patterns continue to evolve to our core destinations and, while we are seeing shorter lead times for these holidays, we are hopeful that the increasing consumer confidence will result in a strong lates market in those regions.”
He added: “Our customer-first attitude and proposition has also been reflected in our record Trust Pilot score of 4.5, further supporting our decision to refund our customers throughout the pandemic promptly and in advance of receiving funds from airlines.
“While we are mindful of the ongoing inflationary pressures impacting our core consumer base, we look to the future with renewed confidence and believe On the Beach is favourably positioned to continue to gain market share as demand for beach holidays further normalises.”
