17 October 2008

Youtravel forecasts move into profit in third year

Bedbank Youtravel.com expects to move into Ã¢â¬ÅâœsubstantialÃ¢â¬~ profit in 2009 after breaking even this year.

Youtravel will have booked more than 500,000 customers in the period, an increase of 81% on its first year. Turnover almost doubled to 112 million euros.

The accommodation specialist is targeting a 25% increase in turnover in 2009, its third year of trading.

The majority of this growth will come from expansion into new product areas and a substantial increase in its international sales, according to group managing director Graham Nichols.

He was giving an update as the company nears the end of its second year of trading at the end of the month.

Company bosses also believe there will be more consolidation in the sector amid speculation about possible takeovers involving other bedbanks.

Nichols said: Ã¢â¬ÅâœWe are now firmly established as one of the major players in the sector and are confident of growing passenger numbers and turnover significantly in 2009, our third year of trading.Ã¢â¬~

International sales, from non-UK interests, already account for 10% of turnover.

Ã¢â¬ÅâœKey international markets for us include Ireland, Germany, Italy and Greece and we believe that substantial growth is yet to be realised from these markets as well as others, which are as yet untapped for youtravel.com,Ã¢â¬~ said Nicols.

Yet the company believes there is still growth to be seen from the UK market.

Nicols said: Ã¢â¬ÅâœWeÃ¢â¬â¢re still seeing momentum from key UK accounts, some of which weÃ¢â¬â¢ve not had a full 12 months of trading with yet. Year-to-date the UK turnover is up by 95% and bookings up by 81% highlighting that ours is a business model with continued growth in a busy marketplace.Ã¢â¬~

Following the demise of XL Leisure Group, the trade predicts that consumers will shy away from the dynamic packaging arena, preferring to book package holidays with high street agents.

UK sales and marketing director Paul Riches said: Ã¢â¬ÅâœYoutravel.com products are sold through some of the biggest travel names on the high streets of the UK. More than 95% of our business is transacted through the trade and so I am confident that we are well-placed to ride out this trend.

Ã¢â¬ÅâœOur winter bookings have more than doubled compared to this time last year Ã¢â¬' with around 30% of total estimated winter sales already booked.Ã¢â¬~

Winter bookings are expected to account for 27% of overall 2008/09 revenues.

Riches added: Ã¢â¬ÅâœAlthough the whole market has seen a slow-down in the wake of the XL collapse we are pleased to see that winter bookings are showing signs of recovery over the past few weeks and are currently at expected levels.

Ã¢â¬ÅâœThis is due to a number of factors, one being new capacity coming back into the market and also a slight improvement in consumer confidence.Ã¢â¬~

by Phil Davies