Company Chooses Citigroup to find a buyer for specialist holidays division Travelopia: According to published reports in both the European travel trade and business news media, Europe’s largest travel company, Tui, has selected Citigroup to start the sale of specialist holiday collection, Travelopia, in a deal that could be worth as much as €500-€600 million ($561-673 million). Travelopia is the division of the company that comprises more 50 brands offering specialist luxury, adventure and education holidays.
The action is the latest in a progression of moves that have taken place since December 2014 when Hannover, Germany-based Tui Travel merged with its parent company, Tui AG, into a single entity. At the time, the company said it would sell off its non-core units as part of a strategic direction aimed at strengthening its business performance.
Since then, the company launched the process of all of its national brands, as well as the popular UK companies of Thomson and First Choice, in to a single Tui brand. And earlier this month, Tui announced the completion of the sale of Hotelbeds, the global bedbank, for €1.19 billion ($2.12 billion) to the London-based private equity firm Cinven Capital Management and the Canada Pension Plan Investment Board.
Tui announced earlier this year that it planned to start marketing Travelopia in the autumn and the unit’s chief executive Will Waggott was quoted by Travel Weekly UK last week as saying he hoped to close a deal in early 2017. The unit has annual revenue of €1.5 billion and earnings before interest, tax and amortization [EIBTDA] of €48 million.
After the announcement earlier this year about the planned divestiture of the Travelopia units, one former Tui official criticized the company for the way it has handled the move. Dermot Blastland, former managing director of TUI Travel UK and Ireland—he left the group in 2010—chided the company for changing direction by divesting the specialist units.
“For over 15 years Peter (Long, former joint CEO who left the company early this year) has talked of the need for differentiation, he wanted TUI to offer a range of products to suit all markets, for every age group, and it’s interesting to see how quickly TUI has changed strategy since he’s gone,” said Blastland, adding, “TUI doesn’t understand the specialist brands because