FIRST Choice is looking to take greater control of its bed stock after warning that consolidation and planning restrictions will squeeze capacity.
Group chief executive Peter Long said partnerships with hoteliers, particularly in the western Mediterranean, are being sought.
In the Balearics, hotel development has been restricted leading to a further squeeze on beds. Long said acquisitions of hotels were possible but not a preference. “We do not have the skill factor,” he added.
Meanwhile, First Choice is reviewing its Signature operation in Canada after poor trading conditions led to a £7.3m loss compared to a £2.2m profit in 1998.
Overall pre-tax profits slipped £3m to £46.9m, with £6m spent on the failed merger with Kuoni partly responsible.
Long blamed overcapacity in Canada for the poor performance. The operator has cut seat-only capacity and reduced its cost base and commission to claw back the losses.
Despite tough trading conditions, UK and Ireland profits rose 49% to £70.2m on margins of 5.6%.
Long said European companies are being identified for acquisition and alliances to expand its geographical spread.