Online travel group On The Beach says a surge in demand for five-star and long-haul holiday bookings has help lift its full-year sales by 16% despite a fall in demand for cheaper breaks.
The group said sales were ahead of pre-pandemic levels as people resumed travelling following the removal of global pandemic restrictions. Its sales rose by a quarter in the six months to September 30 compared to the same period last year.
Manchester-based OTB said its value three-star holiday sales took a hit amid growing cost-of-living concerns in recent months.
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During the year it invested in its brand, technology, and customer proposition, including selling premium lounges and fast-track security and improving customers’ access to a wider range of hotels.
It has seen its five-star holiday sales surge by 83% over the past year, compared to 2019, while the average booking value has risen by nearly a third in the period.
Full-year long-haul sales swelled by 257% compared to 2019 and business-to-business sales jumped by 45%.
As with many other travel companies, On The Beach has chosen to compare its latest financial results to the pre-pandemic period.
CEO Simon Cooper said the cost-of-living crisis has led to “tougher trading conditions” in recent months amid “another disrupted and unpredictable” year, particularly affecting sales of value holidays.
Sales of three-star holidays plunged by nearly a fifth over the full year compared to 2019, suggesting that households looking for lower-cost holidays have seen a greater cost-of-living squeeze than those splashing out on five-star and long-haul trips.
OTB said it expected its underling pre-tax profits for the year to be in line with market expectations, as it reaffirmed its plans to grow its market share and expand in the new year.
Simon Cooper, chief executive of On The Beach, said: “I am pleased with the group’s performance in what was another disrupted and unpredictable year.
“Both the Group’s long-haul segment and five-star holiday sales delivered substantial growth in the year and we will continue to grow these important revenue streams. I am also confident that we will take market share in the group’s core three-star holiday product in the 2023 financial year.
“Despite the tougher trading conditions at the end of the year, the strength of the group’s balance sheet ensures we are well placed to deliver further strategic progress in the 2023 financial year, and the board will continue to appraise opportunities for growth.”
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