On The Beach remains cautious as sales start to climb
Holiday group On The Beach has entered the premium travel market as sales started climbing to pre-pandemic levels following the lifting of travel restrictions.
The group’s revenues for the half year to 31 March 2022 increased to £52.9m, up from £4.4m for the same period last year following the widespread relaxation of restrictions for travel from the UK to most European holiday destinations in January 2022.
Revenue as agent of £39.7m was £5.3m lower than 2019 levels because of subdued consumer demand until restrictions were fully lifted, however the Manchester-headquartered group managed to reduce loss before tax by £14.6m to £7m.
On The Beach said group booked sales in September and October 2021 exceeded H1 19 levels.
However, the Omicron variant heavily impacted sales in November and December 2021 and early January 2022.
Following the gradual easing of travel restrictions in the UK and in key destinations throughout January 2022, group sales have returned to H1 19 levels mid-January.
As at 31 March 2022 the Group had cash of £16.8m, an undrawn credit facility of £75m and customer prepayments held in a ring-fenced trust account of £99m (31 March 2019, net debt of £1m and Trust account cash of £57m.
As a result of actions taken during the pandemic, the Group “has successfully targeted the premium end of its addressable market,” which has recovered more quickly than the value end.
Looking ahead, the group said it “continues to remain cautious” regarding the consumer environment.
It added that visibility of the near term outlook for the UK outbound travel industry is limited and “it is currently unclear to what extent the cost of living crisis will impact bookings.”
Simon Cooper, Chief Executive of On the Beach Group, said: “Throughout the pandemic, we continued with our strategy of investing in our brand, technology and customer proposition. Our deliberate focus on capturing share in the Premium, Long Haul and B2B segments, including accessing previously unavailable premium hotel stock, has resulted in us taking market share in this area.
“Whilst we have entered the second half with resilient sales, visibility of the near-term outlook for the UK outbound travel industry remains limited.
“Customers are typically booking holidays with shorter lead times and we believe we are yet to see the full impact of the escalating costs of living on bookings.
“Despite this, we remain confident that we have taken the right actions throughout the pandemic and we will continue to support our customers and staff as a priority. Our investments in brand and proposition will ensure profitable trading into the second half and has left us in a strong position to continue growing market share.”
