Gold Medal and Travel 2 merger ‘wouldn’t have been needed in normal world’

There would have been no need to merge Gold Medal and Travel 2 “in any normal world”, according to the brands’ chief.

But Covid had left parent company dnata Travel Europe “with few alternatives” than to bring the two businesses together, according to managing director B2B Lisa McAuley.

Speaking on a Travel Weekly webcast, McAuley said: “I myself on joining the business, and my predecessors I know, had looked at merging the brands previously. Ever since the brands were acquired, we were always asking it and we always said ‘no’.

“It didn’t make any sense and I was even quoted as saying it would be commercial suicide to do so, because the reality was, in any normal world, we wouldn’t have needed to do it.

“They were both highly profitable businesses. They had morphed into each other a little bit more, I would say, over the last few years, but in in any normal trading period, the complexity of trying to undertake something like that would have been way too disruptive to potentially have even tried it.”

But she said the pandemic had changed her view.

“The Covid impact started and it became apparent very quickly to us in March or April time that revenues were taking a significant impact and actually, we probably felt the impact earlier than most, even as far back as late January, because of the cruise market in Asia.

“So we’d seen a raft of cancellations from the beginning of February. And it was just getting bleaker and bleaker really.

“It was almost as if you just got a pause in your entire operation. And then it becomes apparent very, very quickly that you have to take cost out of the business as fast as you can. So we then revisited the potential to merge and felt that, actually, there were very few other alternatives for us.”

Asked if a major review of the operation, which started in December, had identified a merger of Gold Medal and T2 as a potential strategy, McAuley said: “PwC came in to review the entire portfolio – and that wasn’t just in the UK, it was across the entire group. And actually, there were areas of the organisation where they said, okay, we need to do a deeper dive in here. But actually, for GM and T2, they said if it’s not broken, we don’t need to fix it.”

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