Belleair Holidays owner The Holiday Malta Company is to merge with bed bank Magic Rooms.
Subject to regulatory approval, the two businesses will combine to “bring together two highly complementary businesses which will be well-placed for further growth both in the B2B and B2C sectors”, said Holiday Malta Company joint director, James Coughlan.
Holiday Malta operates brands including Belleair, Malta Direct and Flexicruise. If approved, the merger is due to be completed by May 31.
Belleair said the brands will form part of the newly created Magic Travel Group Limited and that this will be the umbrella company for all brands within the portfolio and for other developments in the future.
Belleair has been operating for more than 40 years, initially as a Malta specialist but latterly offering a broader range of worldwide destinations. In recent years, it has also launched brands in the cruise sector.
Magic Rooms was set up in 2014 by former Thomas Cook chief executive Manny Fontenla-Novoa, who is now chairman of the bed bank. Coughlan and Holiday Malta co-director Dave Green both worked for Fontenla-Novoa at Cook.
Coughlan said joining forces with Magic Rooms would “give Belleair more ability to tap into worldwide product, which will mean more destinations, better beds and more variety” for its full-service tour operation and cruise-and-stay programme.
He also said it would provide “more options and choice for agents”.
Green added that the merger would also mean better commercial terms through increased buying power that could be passed on to agents and their customers.
He said: “We’ve found the match that we wanted to find. It’s a great mutual fit. We’ve known each other for a long time and we both have ambitious growth plans for the future.”
Coughlan added: “In terms of our strategy, we have certain growth that we’re looking at. We have a clear plan and if you said that plan was A to Z, we’re currently only at D or E with this deal. There is more to come.”
He stressed that all the current trading brands would remain initially as they are established and strong, and “will continue operating in their own right”.
Coughlan said there would be no change in terms of support for agents.
“It’s business as usual. The two businesses are completely complementary. There’s no overlap and both have a strong presence in the trade and lots of strength.”
But he said the combined group would look at its organisational structure. “Everything from IT to purchasing – we will need to review all the strategic pillars of the business moving forward,” he said.
Fontenla-Novoa said: “This merger give us access to the trade and to an established B2C business so direct to the consumer and therefore a great platform to grow. It makes a lot of sense for us.”
He said Magic Rooms was now carrying over 200,000 passengers and turning over £30 million, and would make a profit this year just two years after launching.
“We have done really well growing Magic Rooms, but we want to grow it further. Belleair has recently launched a worldwide programme so we want to provide beds for that and also for its successful cruise-and-stay programme. We can help accelerate their growth.”
Fontenla-Novoa said the business operations of the two companies would merge, as there were lots of revenue and cost synergies to be realised from a combined business.
Magic Rooms is run day-to-day by Dean Jones and Peter Redwood.