TRAVELSTART’S acquisition of Club Travel will launch it into the top three or four largest travel consortiums in the country, commanding market share of an estimated 20% of the retail travel trade, industry experts say. The OTA giant has signed a deal to secure a 100% stake in the Club Travel Group. Club Travel will continue to operate as a standalone company within the Travelstart portfolio with md and founder, Wally Gaynor, retaining a seat on the board. No structural changes are on the cards for either of the organisations, says Travelstart ceo, Stephan Ekbergh. The acquisition is a sign of the times, industry authorities say. “We see this in various markets around the world. When times are tough, you see consolidation. This is not unique to travel. It’s a business trend. And we expect to see more of this in times ahead,” says Morné du Preez, ceo of Tourvest Travel services. It’s good to see leisure brands consolidating and dominating in Cape Town, says Sean Hough, who heads up the travel division at Investec. The acquisition will give Travelstart a leg up with regard to volume in the market and that it will be beneficial for Club Travel to take on a travel
and techology partner to help future-proof its business, he says. “It makes perfect sense,” says one industry expert who prefers to remain anonymous. “Travelstart currently operates in a highly commoditised space. It’s very difficult to keep achieving growth when 99% of your business is selling cheap flights with low margins.”
The acquisition gives Travelstart a foothold in the corporate travel space where Club Travel already has a strong presence. Travelstart has been trying to break into the market, with the launch of Travelstart.Biz in 2017, which was discontinued, and then Travelstart for Business earlier this year. The deal is expected to boost Travelstart’s offering by adding complementary corporate and franchise divisions “to create a formidable full-service African travel group,” says Stephan. “Our company cultures have a lot in common. Like us, Club Travel has always been a bit of a maverick in the industry
and we both have a long history of supplying discounted travel offerings. Travelstart is strong in the consumer segment and we want to bring consumerisation to the corporate and government sectors where Club Travel is an emerging star,” says Stephan. While the deal is still subject to approval by the Competition Commission and no operational strategies have been put in place, the aim is for Travelstart to purchase 100% of the shares for the Club Travel Group. Thebe Tourism will then reinvest in Club Travel Corporate as the majority shareholder with Travelstart holding 46% of this division’s shares. This means that Club Travel Corporate will retain its BBBEE Level One status and TravelLinck will retain its BBBEE Level Two status. The rest of the Club Travel Group will need to have its BBBEE status rerated. Kananelo Makhetha will continue as the ceo of Club Travel Corporate. A response from the Competition Commission is expected within 60 working days. What are the benefits to Club Travel franchisees and ITCs? They will be able to make more money and save time with access to new techology, says Wally. “In order to compete, agencies are spending a fortune to become technology companies specialising in selling travel.
