Travelopia sold off
Hanover, Germany – 14 February 2017 –
TUI has agreed to sell adventure-travel unit Travelopia to private equity firm KKR for an enterprise value of 381 million euros (US$404 million) as Europe’s largest tour operator focuses on expanding its reach of mass-market hotel and cruise brands.
Trimming specialised units is part of TUI’s plan to grow its customer base in Southern Europe, Latin America and Asia by 1 million customers and add 1 billion euros to its revenue by 2022, Bloomberg reported.
Proceeds from the sale of Travelopia, which is expected to close in the second half and result in a non-cash charge of 133 million euros, will be reinvested in its mainstream vacation business.
“The TUI 2022 programme is targeted to the countries where we don’t have tour operating activities today,” chief executive officer Fritz Joussen said. “We are looking at countries where we have increasing middle classes, so strong growth, but where we have high synergies as well, so it will be markets like Spain, Italy and Portugal.”
The disposal will enable TUI to expand its hotel and cruise operations and add new destinations as travellers shun traditional holiday hot spots such as Turkey because of terrorism attacks. Countries including Bulgaria, Croatia, Cyprus and Portugal are reaping some of the fastest growth in bookings for next summer, rival Thomas Cook Plc said last week.
Travelopia, based in the UK, includes a portfolio of more than 50 specialist travel activities including sailing adventures, private jet travel and polar expedition cruises. The company has an international customer base of more than 800,000 travellers each year and serves 70 destinations worldwide. The unit has been managed independently since the merger of TUI AG and TUI Travel Plc at the end of 2014.
TUI reported that source-market programmes for next summer were 35 percent sold so far with bookings up 4 percent and revenue up 9 percent as tourists paid higher prices.