First Choice Holidays to acquire LateRooms |
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Published
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Wed, 27 Dec 2006 11:00
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LONDON: U.K. travel and tour operator First Choice Holidays Plc has agreed to buy online hotel booking site LateRooms Ltd. for 108 million pounds.
The deal involves an additional 12 million-pound payment depending on LateRooms' performance over the next three years.
Peter long, chief executive officer of First Choice, said there is considerable opportunity to increase LateRooms' profitability as it operates with a distinct business model catering to a niche market segment.
Operating since 1999, Manchester-based LateRooms offers online bookings for nearly 13,000 hotels worldwide. Its website allows hotels to list their rates and update them on the basis of room availability thereby avoiding empty rooms.
The firm has a 12 per cent market share in the U.K. and expects to post an operating profit of 6.2 million pounds in 2006. Its founders Steve and Paul Walsh had made a profit of 17 million pounds when they sold the firm to a private equity firm in 2004.
First Choice had earlier acquired tour operators, including YMT Vacations, to expand in long-haul luxury and activity vacations.
It is planning to sell its package tour business and talks with MyTravel and Thomas Cook are said to be progressing. It intends to focus on adventure trips and mountain treks and increase its destinations covering more than 200 countries.
The company's profit for the year ended 31 October stood at 72 million pounds, which is an increase of 2.7 per cent over the previous year. Its sales rose 11 per cent to 2.7 billion pounds.
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