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OHG reports profit after surviving ‘bed bank war’
The On Holiday Group has reported profits of £1.4m thanks to a rise in passengers and cutting costs.
The group had reported losses in the last two years during what it referred to as a ‘bed bank war’.
The group said it has been able to increase passenger volumes by 25% to 600,000 passengers and reduced overheads by 10%.
CEO Steve Endacott said overheads savings came from reviewing all cost items throughout the business.
"Volume growth has been in line with the sector growth, which has been boosted by low-cost carriers switching capacity from cities to leisure routes, for example Ryanair adding 60 flights a week to the Canaries for Winter 09/10 and Summer 2010.
"We expect continued volume growth as this trend continues," he said.
According to Endacott, the bed bank sector in the UK is now relatively mature, with smaller players being forced out of the market by competitive pricing by the bigger players.
“OHG operates within a commodity market place which has simple rules,” he explained.
“Drive the highest volume, through the lowest possible overhead using technology to drive efficiency. The barriers to entry are now substantial, as a bed bank needs to carry over 350.000 passengers to break even these days.”
OHG has also generated over 50,000 bookings from non-UK residents in the first year of its German and Spanish operations.
Further expansion into Canada, France and Italy is planned for 2011.
The group has appointed Peter Brown to its board as a non-executive director.
Brown stepped down as CEO of Monarch Airlines in February 2010 and previously held roles as group managing director of Cosmos and board level positions within First Choice and Unijet.
Brown commented: “The growth of the dynamic packaging sector in the UK has been phenomenal over the last five years and the On Holiday Group’s management has been at the forefront of this development.
“It is therefore with great pleasure that I have accepted the opportunity to help guide its growth, during this next stage of its European Expansion.”
By Bev Fearis
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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