A leading analysts is urging tour operators to adopt a more constructive approach to the acquisitions market.
In its latest survey research company Plimsoll named 268 companies ripe for acquisition in the 1000-strong tour operators market.
Publishing senior acquisition analyst David Pattison said previously the market has been dominated by operators snapping up distressed rivals who can be bought for a bargain-basement price.
However, instead Pattison is urging operators to consider the wider strategic implications of any deals and said they should start focusing on high-performing companies whose acquisition will drive their own businesses forward.
He said: “In doing so, you take a strong adversary to your own company out of the market immediately and it will be instantly generating profitability.”
While he would not name any of the companies which would be positive acquisitions, he said many are still independently run or owned and have carved out their own niches in either the destinations or the activities they offer.
Pattison said Thomas Cook’s £21.8 million acquisition of hotels4u.com earlier this year was a good example of a positive deal, adding: “Thomas Cook to a degree is supporting this strategy, they’ve been looking outside of the mainstream and that comes in many different guises.”
He added there are currently 481 operators listed in the report who are in a strong position to make acquisitions and this is largely thanks to companies saving up money when it has been available.
While Pattison believes the trade should focus on the best-performing companies to buy, he admitted that acquisitions of any failing companies do help the market overall.
He added: “This may sound harsh, but if the industry is to develop and evolve then there will need to be acquisitions.”