AIRTOURS has strengthened its loss-making western Europe division with the acquisition of Dutch operator BV Reisbureau Marysol for an undisclosed sum.
The deal comes just days after Airtours acquired land in the Canary Islands and a 65% controlling interest in the Blue Bay Resorts hotel chain for a combined value of £21m.
Finance director Tim Byrne said the deals prove Airtours has not altered its strategy to build in Europe.
“Because we have bid for First Choice does not mean we will neglect other opportunities in Europe,” he said.
Byrne declined to reveal how much it paid for Marysol, which carried 81,000 passengers in 1998 and broke even, although it is believed to have been around £5m.
The acquisition will push Airtours’ West European Leisure Group carryings to almost 1mpassengers.
Byrne said volumes were now at a level where Airtours can begin making money from the division. “With low volumes it is hard to make money. We made a loss in West Europe Leisure Group in 1998 and the City is expecting us to make a loss this year as well,” he said. “But we are now reaching a level where profit isattainable.”
Increased volumes give greater buying power, he added.
Further acquisitions are expected in western Europe, a traditionally fragmented market. Byrne added WELG bookings are up 39% for winter 1998/99 and 29% for summer 1999.
Meanwhile, Airtours has taken steps to solve the capacity squeeze in the Canary Islands by buying land at Las Meloneras in Gran Canaria and La Caleta in Tenerife. It intends to build two 500-room hotels.
Byrne said the acquisition was fuelled by a need to secure more capacity.
“There is a real lack of hotel accommodation in the Canary Islands. It is desperate,” he said. “The need becomes even greater the more tour operators we acquire.”
About 100 of the rooms will be used for Airtours’ timeshare operation, added Byrne.
The 65% interest in Blue Bay Resorts – which operates six hotels in Mexico and the Caribbean – will also hand Airtours extra capacity and enable it to take control of its product in resort.
The hotels have a combined total of 1,500 rooms. Airtours currently owns 26 hotels.