B2B sales soar for On the Beach Group

Prior to the emergence of Omicron, On the Beach said group sales – measured by total transactional value before cancellations – in September and October exceeded 2019 levels, and returned to 2019 levels on 13 January following the "heavy impact" of the variant and subsequent government travel restrictions on sales in November, December and early January.

In the four weeks to 23 February, meanwhile, the group said sales were up 50% on 2019 levels as more restrictions – in the UK and overseas – were lifted.

"After 18 months of Covid affected trading, On the Beach experienced green shoots of recovery at the start of the current financial year," said the group in its trading update. "Group sales for October 2021 exceeded the comparative month in FY19, carrying forward the positive momentum from September 2021, driven by the easing of international travel restrictions and the success of the group’s free Covid test promotion."

The group said the emergence of Omicron "led to a substantial reduction in consumer confidence, search traffic and booking volumes" which lasted throughout December and continued into early January but has since strengthened "significantly".

"After what has been a very difficult time for the travel industry, it has been incredibly pleasing to see consumer confidence and demand return in line with the loosening of travel restrictions in the UK and our destinations," said On the Beach chief executive Simon Cooper.

Lead times for mainstream destinations in the Canaries, Balearics and Algarve have shorted versus 2019, while early bookings for summer 2022 are typically of higher value, with holidaymakers opting for more "premium" hotels – particularly in the eastern Mediterranean.

On the Beach said while its core focus remains to continuing building its share of two, three and "value" four-star holidays, investments in its proposition had allowed it to make further inroads into more premium markets.

"Since the start of the financial year, 30% of hotel sales are in hotels that are new to the group or on improved terms," said the group, adding it was now selling a greater proportion of premium hotels and was capitalising on a "shift in booking mix into higher value destinations".

Planned summer 2022 short-haul capacity to destinations sold by On the Beach, the group said, has now surpassed what it was for summer 2019. "As a result, the group expects a substantial lates market, with competitive prices for both flight and hotel inventory supporting the ongoing recovery."

"The group’s proactive actions taken throughout the pandemic have led to increased group sales in the higher value four and five-star hotels, particularly for holidays to the eastern Mediterranean," Cooper continued.

"Our sales patterns continue to evolve to our core destinations and while we are seeing shorter lead times for these holidays, we are hopeful that the increasing consumer confidence will result in a strong lates market in those regions.

As of 23 February, the group had £19 million banked. This excludes £61 million in deposits held in trust. It also has access to a £75 million credit facility, which is currently undrawn.

Cooper added the business remained mindful of the impact of inflation and a potential cost of living crisis on the spending potential of its core consumer base, but looked to the future with "renewed confidence".