KKR buys Travelopia for £325 million and targets Chinese outbound

European travel group TUI has sold off a batch of specialist businesses for £325 million to KKR, with the new owner immediately looking to China as a source market.

The Travelopia unit comprises 53 different brands which sends 800,000 passengers a year to 70 different destinations.

KKR’s release describes Travelopia as one of the “world’s leading specialist travel groups” and mentions products such as sailing adventures, tailor-made holidays, sports tours, school expeditions, private jet travel and polar expedition cruises.

KKR Europe director Edouard Pillot talked about “harnessing the potential from digital distribution and CRM and expanding its geographical reach, notably into China.”

And its head of services Mattia Caprioli talked about the external tailwinds driving the deal – an aging and active global population, coupled with the trend towards experiences and activities.

He also mentioned that Travelopia would draw on its experience of other investments in the sector – KKR led a $50 million round for Germany’s tours and activities booking platform GetYourGuide in 2015 while late last year it linked up with KSL to buy North America’s Apple Leisure Group for an undisclosed sum.

The deal has been announced at the same time as TUI Group issued its financials for the Oct-Dec quarter. Online continues to grow for the European vertically integrated tour operator, with 45% of its business in the quarter booked online.

This compares with 42% in the same quarter in 2015 while the proportion for the year to end-Sept16 was 43%.

The quarterly numbers are broken down by source market, with Germany – its largest by volume – continuing to be a drag on its overall online performance. Only 16% of its 1.2 million customers in Germany (and Austria) booked online, although this represents a 2% increase on the same quarter last year.

The UK, where it handled 1 million passengers in the three months, gets even stronger, with 59% of bookings coming online, 3% up in a year.

The Nordics remains its strongest online market with 75% booking online, although this division only handled 272,000 customers in the three months.

tui digital

The chart above puts the online bookings in the context of its direct distribution, which includes shops and call centres, still a big part of its business. TUI’s focus on driving bookings through its own channels rather than through third parties allows it to capture and control its transactional and payments data.

TUI’s quarterly result doesn’t offer much more detail on its digital footprint. But as the largest “traditional” travel group in Europe, TUI’s generic comments about the market are worth noting. OTAs and B2B/B2C bedbanks for example might like to note (if they haven’t seen the signs themselves) that demand from the Nordics for Egypt and Turkey is weak; UK bookings have remained “resilient” post Brexit while summer bookings for its hotels in the Canaries, Greece and Cyprus are strong.

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Martin Cowen

About the Writer :: Martin Cowen

Martin Cowen is contributing editor for tnooz and is based in the UK. Besides reporting and editing, he also oversees our sponsored content initiative and works directly with clients to produce articles and reports. For the past several years he has worked as a freelance writer, specialising in B2B distribution and technology. Before freelancing, from 2000-2008, he was launch editor for e-tid.com, the first online-only B2B daily news service for the UK travel sector.



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