On Holiday Group has announced year on year volume growth of 42% for 2008.
The company has posted accounts for 2007 showing its bed bank business making a profit of £336,000 on a hotel turnover of £45.7m and gross commissions of £7.4m.
OHG is expecting the accommodation only market to grow next year by 45% despite the collapse of the XL group and the removal of Freedom Flights.
Chief executive Steve Endacott said: “Historically it has taken 18 months for the flight capacity to be replaced post a major collapse, however the appetite of low cost carriers to expand into leisure routes is much greater now that the credit crunch is impacting impulse buy city routes.
“This in turn will be boosted by seat brokers bringing in aircraft with heavily discounted leases and potentially lower fuel prices than 128 dollars a barrel which is the price major operators appear to have hedged at”.
Endacott also said that the major operators are more likely to try to control the dynamic packaging sector by acquisition than trying to compete head on.
“The major operators have a average overhead of £23.50 per passenger while bed banks are much more efficient with an over head of £6.25 and can trade at lower margins and lower prices. These numbers may have changed a bit with the consolidation of the majors however; the basic premise remains that agents can dynamically package to produce cheaper prices, unless they are starved of both beds and seats. I can see the logic for the major operators further consolidating the bed bank market.”