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Door open for new bed bank
On Holiday Group chief executive Steve Endacott believes the company’s failure leaves a gap in the market for a quality bed bank supplier.
But he’s adamant he will not re-enter the sector.
Endacott said last week’s VAT ruling in favour of Med Hotels means bed banks are in a much stronger position.
When asked whether the demise of OHG signified the start of the end of the dynamic packaging sector, because it means agents have fewer bed banks to book, Endacott replied: "No, this is just the end of the start of DP."
He explained: "Now that bed banks have certainty over the VAT situation they suddenly become more valuable.
"OHG would have expanded much faster if we did not have the £4.5m hole (held by HMRC in dispute of TOMS). This stopped us realising finance, buying other B2C brands as planned or merging with a big B2C.
"Now this issue has gone away these opportunities suddenly become available and companies such as Low Cost Travel Group should flourish.
"However, there is clearly a major gap left by OHG as a good quality low-priced bed bank that can be filled, but it will take time for somebody to get back up to 650k passengers.
"It can and will be done – just not by me!"
He also said the industry needs to unite in a collective voice against the Package Travel Directive reforms, which could be equally as damaging.
"At the moment the Med Hotels case makes it clear that bed banks can act as agent under Flight Plus with no TOMS VAT due, however the PTD reform again threatens this and must be fought against, or we will be back to square one by 2016."
Lisa
Lisa joined Travel Weekly nearly 25 years ago as technology reporter and then sailed around the world for a couple of years as cruise correspondent, before becoming deputy editor. Now freelance, Lisa writes for various print and web publications, edits Corporate Traveller’s client magazine, Gateway, and works on the acclaimed Remembering Wildlife series of photography books, which raise awareness of nature’s most at-risk species and helps to fund their protection.
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