On the Beach founder and chief executive Simon Cooper is to step down within the next 12 months.
He will be succeeded by finance chief Shaun Morton.
Cooper, who founded On the Beach in 2004 and remains a “significant” shareholder, having increased his stake in August, will remain on the board as non-executive founder director.
The disclosure came as the OTA revealed a return the black in the year to September 30 with a pre-tax profit of £14.1 million against a loss of £18.4 million in the previous 12 months.
However, the profit was £20 million below the £34.5 million figure achieved in pre-pandemic 2019.
The company said average booking values rose by 31% over 2019 levels with a greater mix of long-haul, B2B and and premium beach holidays despite the emergency of the Omicron variant of Covid-19 at the start of the year and disrupted airline schedules.
The total transaction value (TTV) of holidays this summer was 19% ahead of 2019.
The company reported a record year for trade-only Classic tour operating businesses.
“As travel re-emerged from almost two years of restrictions in February, Classic Collection and Classic Package were both well-positioned to deliver growth,” Cooper said.
“Despite the slow restart post Omicron and the number of captive customers of competitors who had rolled cancelled holidays from Covid-19 disrupted periods, the combined Classic businesses delivered 45% growth in TTV verses 2019.
“In October 2022, Andy Freeth was appointed as the new CEO of Classic Collection Holidays and Classic Package Holidays. Andy has a huge amount experience in tour operating and leading B2B businesses through fast paced growth.
“Andy is an experienced CEO who is excited to be coming on board and is keen to support Classic’s ambitious future growth plans.
“With Thomas Cook exiting the market in 2019 and other tour operators focusing on direct sales, there is an opportunity to drive both number and usage of high street and independent travel agents that sell CPH holidays.
“Whilst the year was heavily disrupted, the group has continued to make progress in developing the offering and growing sales after its initial launch in 2019-20 was hampered by Covid-19. The business was able to carry more than 40,000 passengers in the year and is well set to increase this in 2023.”
Cooper described 2022 as a year of “strategic progress” for the group.
“Despite a number of well-documented headwinds faced by the entire industry, including the disruption caused by Omicron in the key booking period of January, the group reported double digit growth in group sales, returned to profitability and exited the year in a strong cash position,” he said.
“This success is largely as a result of the investments we have made in the last 12 months across our brand, technology and customer proposition.”
Cooper added: “During the year we developed a truly differentiated customer proposition, successfully positioning the brand to appeal to customers looking at five-star bookings across both short and long-haul which led to the group capturing a greater share in the premium segment of the market.
“Our industry-first, customer-focused initiatives, including our free lounge and fast-track security offers have enhanced our customer experience and set us apart from our peers.
“We are looking forward to expanding this premium offer alongside growing our long haul and B2B offerings which significantly expands our total addressable market.”
He said: “Looking ahead, the visibility of the UK outbound travel industry remains unclear given the tough macroeconomic environment.
“Whilst winter and specifically January remains a key trading period for us, we have started the new financial year with a healthy forward order book for summer 2023.
“Pleasingly, 2023 will also be the first year our industry is free from refund credit notes and vouchers which will significantly enhance our captive audience and I am confident that the investments we have made this year leave us ideally placed for the year ahead.
“As we announced today, we have commenced a leadership succession plan where I am confident that after working closely with Shaun on the strategic direction and initiatives of the group over the last few years, he is the right person to lead the business through its next phase of growth.”
Cooper said the timing of his decision to step down as chief executive was a mixture of circumstances following the Covid pandemic and feeling the time was right.
He explained: “I’m going to stay on the board of On The Beach and I’m already involved in a number of other businesses outside of the travel sector.
“It’s still some months away, we do not know how long the process will take to recruit a successor for Shaun. I have always felt I wanted to step aside some time in my fifties.
“Covid has had a significant impact in all our lives, if nothing else it’s shown us what it would be like to not have to go into an office five days a week.
“Where we find ourselves this financial year, we have never been in a stronger position, the operations have never been broader or more tangible.
“I’ve been fortunate to be able to, in effect, conduct a five-year interview with my successor and I’m in no doubt I’m handing over to a great successor. The time feels right.”
On the Beach chair Richard Pennycook said: “I am delighted that Shaun has agreed to succeed Simon as CEO of On the Beach.
“Shaun’s diligent approach to the group’s finances through the pandemic has ensured we exited Covid with a strong balance sheet and this stands us in good stead as we look to the next growth phase.
“The board and business as a whole will continue to benefit from Simon’s deep knowledge of the company he has built, the technology that drives it and the wider travel environment in his founder director role and I look forward to working with him in this capacity.”
Morton added: “The travel industry is constantly evolving and I am confident that On the Beach’s flexible model will continue to win market share while delivering excellent value for our customers.”