Travel companies look overseas

HOGG Robinson, the travel company, revealed on Friday that it is buying 51 per cent of its Canadian partner, The Rider Travel Corp. This comes hard on the heels of Airtours' purchase last week of a holding in the German package tour operator Frosch Touristik.

Both acquisitions highlight the race between UK travel companies for a bigger share of the international market. German companies, such as TUI, have long expanded across frontiers, but only now are UK operators catching up.

Airtours and Thomson Travel Group already account for about 65 per cent of Scandinavian package tour sales. Manchester-based Airtours' 29 per cent stake in Frosch, and option to buy the remainder, now puts it ahead of its newly listed rival in Europe's largest economy. UK companies "have realised they can't stay in their own markets, and can apply their skills elsewhere," said Nigel Hicks, an analyst at Credit Suisse First Boston.

Europe's travel industry is growing at a rate of about 4 per cent a year, with some parts, like the cruise industry, growing considerably faster. Still, the UK is a mature market where earnings can suddenly slump when companies are forced to sell off excess capacity cheaply.

William Barney, a director in KPMG's consultancy division, said: "The UK market can sometimes find itself overbought and ... the availability of capital makes [overseas] acquisitions possible."

Airtours, the largest tour operator, operates in the UK, France, Scandinavia, Belgium, Holland, Canada, the United States, and Italy. Market leader, Thomson Travel, trades from Ireland and Scandinavia, where in February it acquired package tour operator Fritidsresor. "Medium-term, we'll be looking at acquisition in the UK, Benelux, and Switzerland - and at UK self-catering holidays," said Paul Brett, Thomson Travel chief executive.

British companies could well take a bigger slice of the European pie because the largest are "vertically integrated", owning or controlling travel agents and charter airlines as well as tour operators. The top five, which also include First Choice, Thomas Cook Ltd, and Carlson Leisure Group (UK) Ltd, the British subsidiary of US-based Carlson Companies, account for more than 70 per cent of package holidays, according to market research group Mintel.

Tough price competition in Germany and other European markets is weighing on smaller companies and forcing consolidation, highlighted by the recent merger of Deutsche Lufthansa's charter airline with Karstadt's package tour unit to create C&N Touristic. "We expect consolidation, greater cross border co- operation and vertical integration," said Renata Drinkwater, a partner in the hospitality and leisure unit of Ernst & Young.

UK companies are not the only ones vying for European dominance. Switzerland's largest travel company, Kuoni Reisen AG, for instance, is thought to be looking at further opportunities in Germany after its purchase of Euro- Lloyd Reisebuero travel agency from C&N. And operators like C&N and TUI will almost certainly expand outside Germany or forge partnerships to boost earnings at home.

But British horizons extend beyond Europe. Airtours is tipped to expand in the US, and this week First Choice acquired the tour operating unit of Royal Aviation in Canada for pounds 1m.

The North American market is more problematic than Europe, however, tending to be dominated by scheduled airlines with shorter breaks. Analysts don't rule out mergers and acquisitions between UK companies.

"In the UK the market has been fairly steady," said Bruce Jones, an analyst at Merrill Lynch. "But there must be questions about what will happen to Thomas Cook and whether Carlson will keep Inspirations."

News
peopleHowards' Way actress, and former mistress of Jeffrey Archer, was 60
Sport
Romelu Lukaku puts pen to paper
sport
News
Robyn Lawley
people
Arts and Entertainment
Unhappy days: Resistance spy turned Nobel prize winner Samuel Beckett
books
PROMOTED VIDEO
News
people
Life and Style
Troy Baker and Ashley Johnson voice the show’s heroes
gamingOnce stilted and melodramatic, Hollywood is giving acting in video games a makeover
News
i100
Life and Style
Phones will be able to monitor your health, from blood pressure to heart rate, and even book a doctor’s appointment for you
techCould our smartphones soon be diagnosing diseases via Health Kit and Google Fit?
News
people
Extras
indybest
Travel
Ryan taming: the Celtic Tiger carrier has been trying to improve its image
travelRyanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Usain Bolt confirms he will run in both the heats and the finals of the men's relay at the Commonwealth Games
commonwealth games
Life and Style
Slim pickings: Spanx premium denim collection
fashionBillionaire founder of Spanx launches range of jeans that offers 'thigh-trimming construction'
News
Sabina Altynbekova has said she wants to be famous for playing volleyball, not her looks
people
News
i100
Life and Style
tech'World's first man-made leaves' could use photosynthesis to help astronauts breathe
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior Investment Accounting Change Manager

£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

BA/PM,EMIR/Dodd-Frank,London,£450-650P/D

£450 - £650 per day + competitive: Orgtel: My client, a leading bank, is curre...

Senior Analyst - ALM Data - Banking - Halifax

£350 - £400 per day + competitive: Orgtel: Senior Analyst, ALM Data, Halifax, ...

Java developer - Banking - London - Up to £600/day

£500 - £600 per day: Orgtel: Java developer - Banking - London - Up to £600/d...

Day In a Page

Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices
Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

Could smartphones soon be diagnosing diseases?

Health Kit and Google Fit have been described as "the beginning of a health revolution"
Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

Can we learn to love Ryanair again?

Four recent travellers give their verdicts on the carrier's improved customer service
Billionaire founder of Spanx launches range of jeans that offers

Spanx launches range of jeans

The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
10 best over-ear headphones

Aural pleasure: 10 best over-ear headphones

Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

Commonwealth Games

David Millar ready to serve up gold for his beloved Scotland in the end
UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

UCI Mountain Bike World Cup

Downhill all the way to the top for the Atherton siblings
Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star