Hotelbeds Group has sold its Destination Management business unit for €110 million, allowing it to concentrate on its core bedbank business.
The buyer is TUI Group, which sold Hotelbeds Group just under two years for €1.2 billion to Cinven and Canada Pension Plan Investment Board.
Both businesses have been busy since the sale. Notably, Hotelbeds Group has bought Tourico Holidays and GTA. These brands continue to operate independently while they are integrated into the group.
Hotelbeds' Tours and Activities Bank - which aggregates and distributes tours and activities to third parties in the same way as it aggregates accommodation - is not part of Destination Management and will remain part of Hotelbeds strategic core.
TUI, meanwhile, continues to evolve from its historical vertically integrated tour operator model. It has honed in on exclusive inventory in its core markets, such as its own aircraft, its own hotels and its own cruise ships.
However, every annual general meeting seems to bring a new business focus to light. In 2017 it launched TUI 2022 - a strategy to launch the brand in new markets. "This will primarily be achieved on the basis of a digital, standardised, globally scalable software architecture as well as global expansion of the brand," it said.
This year's AGM focused attention on "destination services" as a designated strategic growth area for the business, which is where Hotelbeds' Destination Management portfolio comes in. The deal gives TUI ownership of three distinct businesses - Destination Services, Intercruises and Pacific World.
Destination Services is a B2B provider of tours, transfers and other in-destination services to tour operators and handles more than two million passengers per annum. TUI's existing "Destination Services" unit already develops and arranges around 4.5 million excursions per year. Combining the two puts TUI as one of the world's biggest players in "services at holiday destinations", a segment it claims is worth €140 billion per annum.
TUI also gets its hand on InterCruises, and has identified becoming a handling agent for cruise companies as a new area of business. So as well as having its own cruise line, TUI will provide a B2B service to its competitors. InterCruises works at 400 ports worldwide, and provides a service to "millions" of cruise passengers.
One outlier in the Hotelbeds deal is Pacific World, which is a MICE specialist, based in Singapore and which manages some 1300 events around the world every year. It sits awkwardly with TUI's leisure focus but there is some crossover with the aspirations of TUI 2022, which identified Asia as a target market.
Click here to read the Hotelbeds Group release.
Click here to read TUI release.