The new owner of The River Cruise Line and Diamond Rail brands has outlined plans to grow sales through the trade following the collapse of parent company Diamond Holidays.
Arena Travel bought two of the group’s brands, its database, reservation system, website and URL address after Diamond Holidays went into administration last week with more than 7,000 forward bookings, accounting for around over 16,000 passengers.
A third brand, Diamond Holidays, which offered coach breaks, also failed but was not bought and remains up for sale along with other intellectual property rights and tickets for events such as the Chelsea Flower Show.
All staff have been made redundant. The offices and staff are not part of the purchase and are being dealt with by administrator Antony Batty.
Arena Travel had been looking to invest in Diamond Holidays prior to its collapse, and considered rescuing it as a going concern, but said the risk was too high.
Investor and director Ian Brooks said buying the cruise and rail brands was an opportunity to double passenger numbers across the expanded business.
He aid: “The Diamond brands already sell well through the trade and we will maintain that and look to grow it. We will also look to sell elements of the Arena portfolio through the trade now.”
Arena currently operates four main programmes, tours for people who like to play bridge, crafting holidays, battlefield tours in association with the Royal British Legion and music tours.
Brooks said he thought the bridge and crafting holidays had the most potential to be sold by agents.
Speaking exclusively to Travel Weekly, Brooks explained that Arena had been in discussions with Diamond having been presented with an investment opportunity in the business.
But he said: “It very quickly changed from an investment conversation to an insolvency situation.
“We looked to see if we could rescue the business as a going concern but there wasn’t enough time to do the due diligence and we didn’t want to take on all the debts and liabilities. It was too high a risk.”
Brooks explained that the only option was to take on the assets, which include the database, access to Diamond’s reservations system, its website and its URL address.
He added that Arena was taking on only the assets relating to the river cruise and rail holidays, because they complemented its existing programmes and customer base.
“The coach business fits less well into what Arena does, which is high margin niche holidays for the more discerning customer,” Brooks added.
He confirmed that the some 40-50 staff working from Diamond’s offices in Market Harborough were “not part of the purchase” and were “being consulted with by the liquidator”.
Brooks explained that Arena’s general manager Steve Goodenough had been brought into Arena from Mosaic Holidays but prior to that, he had been sales and marketing director at Diamond for four years. He left Diamond in 2015.
Brooks said: “Steve is a great guy and obviously knows the Diamond river and rail business really well.”
Brooks said the Arena business had doubled in size to 2,000 passengers since he had invested just over four years ago.
And he said he thought the addition of the Diamond programmes could help it double again to 4,000 passengers.
The first task was to try and retain as many of the company’s customers as possible, according to Brooks, who sent letters to all customers booked to travel over the weekend.
In them, he explained that Arena was taking over the Diamond business and they should claim their money back from Abta or their credit card provider (and in a small number of cases the CAA), then could rebook their river cruise or rail holiday with Arena.
The first departure was due this Friday (March 24), Brooks confirmed, but said he was confident that many of the customers would rebook through Arena.
“My understanding is that there is a high repeat rate on our river cruises especially. They like our specific ships, and Arena is the only company able to offer them,” he said.
Commenting on the trade plans, Brooks said: “The acquisition of Diamond will give is the opportunity to start working with the trade. Our products are not for your average travel agent, but these customers tend to spend a lot of money – and we will pay good commission to any agents making a sale.”
He added: “We know we have to be more proactive with the trade if we want them to know, trust and book with us, and that we are going to have to start going to the agent conferences and put out incentives into the market. We will do all that.”
The Arena plans were revealed as it emerged Diamond Holidays’ £1.7 million bond with Abta is insufficient to cover the bookings.
But Abta, responsible for the lion’s share of bookings as there is no flight element, is referring claimants who booked by credit card back to card providers.
A spokesman added: “If everyone had paid by cheque they would still get their money back. Even if the bond wasn’t sufficient, we have secondary funds.”
The CAA expects 603 claims following the collapse. No clients were abroad at the time.
Alan Bowen, of AGB Associates, suggested Abta rethinks its 10% bonding requirement for tour operators selling product that does not need an Atol.
He said: “There is no obvious reason why claims should be so high at this time of year.”
He added that Abta directing customers to credit card companies was no different to the CAA’s approach.
Arena Travel hopes to rebook as many existing customers as possible, but companies including Saga, Cosmos Tours, Great Rail Journeys and Emerald Waterways are also offering discounts to snap up bookings.
Arena operates four main programmes: First for Bridge – tours for bridge players; Stitchtopia – craft-themed holidays; plus battlefield and music tours.