Holiday firm Hays Travel has acquired the lucrative customer base of respected Newcastle firm as part of growth plans triggered by the economic pick-up.
The firm, established by chairman John Hays 34 years ago, has bought the staff, bookings and customer base of £2.5m turnover Jesmond Travel in Newcastle, in a deal completed for an undisclosed sum – and there more acquisitions to come.
The deal comes after the Sunderland-headquartered business, which operates 101 retail outlets and five call centres, announced gross value of sales of £557.7m for the year ended October 2013, up from £526.7m, and a drop in operating profit from £986,656 to £171,710.
During the period the firm also acquired Bath Travel, a retail travel agency based in the south of England, for £7.6m, which doubled its portfolio of retail outlets.
Mr Hays said: “We’ve completed a deal to take on the seven members of staff, forward bookings and the customer list for Jesmond Travel, rather than acquiring the company itself.
“It’s really exciting for us. It has a great customer base and we will change it to be under the Hays Travel name.
“It already does good volumes of business in both corporate and leisure. We’re really optimistic about this venture.
“Last year we acquired Bath Travel and that integration has gone very well. In a very short space of time we brought 300 new people onto the Hays Travel systems, so I’m very proud of our technology systems.
“And we are growing, very rapidly. We have got a lot of ongoing projects.
“We have just acquired Jesmond Travel and there are more acquisitions in the pipeline – we are growth mode in terms of retail.”
Having grown to become the country’s biggest independent travel agency Mr Hays is proud of its impartial heritage, but believes that the business must “control its own destiny”, hence the creation of its own tour products which were launched in 2012 under brands including Hays Faraway and Hays Cruise.
The tour operating part of the business has since expanded its range of products – and will soon be bolstered by Channel Islands additions once brochures are finalised – but Mr Hays is keen to remain as independent as possible.
He said: “This year we are looking at gross value of sales reaching £700m and the signs are that we need to control our own destiny as much as possible and for that strategic reason we decided to start our own tour operations.
“The plan was to have 25% of what we sold to be in-house products and it went very well. We achieved 27% of sales in that area.
“This year we set the target of 30% and we’re on for 32%, but we don’t want it to get much bigger than that.
“We are very pleased with that strategy, to have our own distribution as well as supply third party distributions.
“Our history and legacy is as an independent travel agency and part of our success is because people value independent advice.
“I’m a huge admirer of the big players like TUI and Thomsons, they have great products, but people who go into a Thomsons agency will be offered Thomsons products.”
The introduction of exotic locations to the list of sunny destinations has been driven by families’ desire to travel further afield, where money stretches further.
The expansion of flight routes at Newcastle International Airport has helped to drive this in terms of North East revenues.
Mr Hays said: “Historically we have sold holidays to Spain, Portugal, the Canaries and Balearics but increasingly we are doing more long haul holidays, to places including Cambodia, Malaysia and Vietnam.
When I started the business 34 years ago it was a big deal to travel on holiday to Spain but people’s aspirations and their vision has continued to expand – places like Cambodia are the new Spain.”
“The Emirates’ flight out of Newcastle is really important to the North East as a springboard to those locations further to the east and the south.”
After acquiring Bath Travel and Jesmond Travel, and recently taking on 100 new apprentices, the firm has a headcount of 1,000 across the UK, but Mr Hays said it remains important for the business to maintain its strong roots in the North East.
He added: “What makes me really quite proud is that we have got close to 400 people ay our head office in Sunderland, and North East employment is very important to me, and all of our back office operations are carried out in Sunderland.”