The integration of Ryanair flights into holiday packages contributed to a record-breaking annual financial performance for On the Beach.
The OTA’s trade brand Classic Collection returned to the black following a restructure in the year to September 30, laying the foundations for “sustainable profitable growth”.
On the Beach group adjusted pre-tax profit grew by 25% to £31 million as revenue increased by 14% year-on-year to £128.2 million based on record total transaction value (TTV) for the third consecutive year, up 15% to £1.21 billion.
Summer passenger numbers grew by 13% over 2023 with the company hailing its “transformational” partnership with Ryanair and imminent expansion into Ireland.
Chief executive Shaun Morton said: “Securing free and fair access to Europe’s largest airline increases the potential for the group to add additional source markets beyond the UK and the Republic of Ireland in the future.
“The group continues to assess strategic and commercial opportunities to expand into new markets either organically or by acquisition.”
While the B2B channel operates in an “increasingly competitive” market, “there remains a significant opportunity to become the go-to B2B provider of Ryanair packages, whilst having the ability to offer tailor-made packages for the trade,” he noted.
“Changes made in the year have resulted in a single brand trading as Classic Collection and operating using the group’s scalable technology platform,” Morton said.
“These changes have been successful in returning the channel to profitability in FY24, simplifying group reporting and laying the foundations for sustainable profitable growth in FY25 and beyond.”
The group is entering the current financial year “in better shape than ever” after the rise in profits.
“This performance was driven by a combination of initiatives, including the successful integration with Ryanair, ongoing investment in our proprietary technology platform and further enhancements to our differentiated customer proposition,” Morton said.
“The partnership has facilitated an improved customer journey for those booking Ryanair flights as part of an On the Beach package, whilst enabling increased operational efficiency and a greater focus on areas of strategic value.
“What’s more, the agreement and significant upgrades to our technology have supported a doubling of our addressable market, following the addition of city breaks to our offering alongside planned investment in Ireland.”
He described the positive momentum as continuing into the new financial year, with TTV 14% ahead of last year, “indicating that customers continue to prioritise their spending on holidays”.
Morton added: “Winter ’24 volumes are currently at record levels, up 25% year on year, as customers seek winter sun or a European city break, and we anticipate summer ’25 to be significantly ahead of last year, with bookings to date supporting this.
“Our strategy and positive booking trends, underpinned by our track record of delivery, gives us every confidence in delivering on our medium-term ambition to double TTV to £2.5 billion, achieve ebitda of £100 million and adjusted profit before tax of £85 million.”
He pointed out that the group was not limited to the schedule of a single airline and does not bear its high fixed costs.
“In 2024, there are estimated to be 48 million seats across the UK market flying to On the Beach’s existing beach destinations alone. Such healthy seat capacity provides significant headroom for further growth for On the Beach’s current UK customer base of c.2 million passengers per annum,” Morton said.
