On The Beach sees sales hot up after Arab Spring chill
HOLIDAY company On The Beach is confident of bouncing back this year after sales were hit by the Middle East uprisings in early 2011.
Simon Cooper, chief executive of the web-based holiday brand, told TheBusinessDesk.com that the Manchester-based company had seen the Arab Spring hit sales by around 13% last year.
He said: “We were heavily exposed to Egypt and the Red Sea and bookings and sales just fell away from the end of January last year, and like many others in the travel sector such as Thomas Cook, we suffered as many of our costs were fixed.
“We are a lot less reliant on one geographical location now, and sales in January are up 46% year-on-year, which is clearly encouraging.”
He said hotel prices in Spain had fallen by around 40% in the last three years and was currently the top destination for holiday makers, with the Canary Islands, Balearics and Costa Blanca all very popular.
Newly filed accounts for the year to the end of September 2011 show sharp falls in gross revenues and commission and a consequential increase in bottom-line losses.
Gross revenues fell 13% from £158m to £136.8m and gross commission from £20.6m to £17.9m. Operating profits before goodwill fell from £4.3m to £1.2m, and after goodwill and interest payments of £4m, the company made a bottom-line loss of £5.2m against £1.6m in 2010.
Mr Cooper said while consumer confidence was still fragile and holidaymakers are booking later for this summer, there had been a good level of bookings for the Royal Jubilee bank holiday period in May.
On The Beach is 51% owned by buyout firm ISIS Equity Partners with the balance held by management. Its balance sheet shows long term borrowing, mostly comprising of loan notes, of £35.7m.
Mr Cooper said ISIS understood the tough external environment and recognised the progress the business was making at an operational level after improvements in the IT systems to boost conversion rates through the website.
“We have paid down a lot of bank debt since 2010 and remain cash generative,” he added.
