Ideal Cruising boss predicts further consolidation

Further consolidation in the cruise retail sector has been predicted by the chairman of Ideal Cruising which was sold to the Lowcost Travel Group this morning.

Ian Books said other retailers looking to add cruise to their offering were likely to look to do a similar deal to acquire specialists in the sector.

Lowcost Travel Group took a first step into the cruise sector last year developing in-house, a website powered by Traveltek.

Brooks said: “I’m a great believer in if you are going to do something you have to do it properly and give it some focus. If other people want to come into cruise as long as they do it properly and give it that focus that will do it successfully.

“I can see further consolidation. Look at Lowcost, they wanted to get into cruise and ended up buying a cruise specialist.”

Staff at Ideal and its cruise line partners had been aware of the deal for a number of weeks as Ideal started the process of extricating itself from the Freedom Travel Group, The Co-operative Travel’s independent consortium.

Ideal now works under Lowcost’s Atol and, crucially, has access to airlines’ net fares through the group’s Iata membership.

Brooks said, although it was not the be all and end all of successful cruise retailing, the ability to offer more bespoke dynamically packaged cruise was important to achieve good margins.

“Otherwise you are just a ‘me too’ operation,” he said. “How do you differentiate the product?

“If a consumer rings up and they want to book a cruise package with a cruise line, that’s what we sell them and there is also a big market for cruise-only and ex-UK cruises.

“But there is also a market for people that are attracted to special deals that you can create. That’s where the new to cruise market is.”

Ideal was launched six years ago and Brooks has taken a more hands-on role at the Camberley-based company in recent months.

A deal to sell it to Lowcost in February 2009 fell down due to the impact of the recession and the valuation placed on the retailer. Brooks would not comment on any details of the deal, but said a more “stable” economic environment was key to reaching an agreement this time.

“In February 2009 there were still question marks over the banking system, we were in the depths of the recession and there were concerns about what the future looked like.

“Now we are in a bit more of a sure place and everyone is more confident about the future. I’m committed for at least the next 12 months to ensure a smooth handover and to make sure the business remain on track and on the growth trail Lowcost want.

“I do that willingly and with pleasure as I want to see it be successful and if I’m enjoying it maybe I’ll stay longer, why not?”

Brooks said the biggest challenge for cruise retailers is to grow the market to reach the kind of penetration in the holiday market seen in the US (10% compared to just 3% in the UK).

He said this would ensure the same retailers are not just going after the same customers offering ever bigger discounts to secure the booking.

“I think the biggest challenge for cruise lines and retailers is still, despite the reduction in average of, the perception that it’s just for old people. It’s still massively undersold.”

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