UK Private Equity Firm now owns Boston-based Smart Destinations, UK-based Leisure Pass Group; and the New York Pass—after earlier acquiring Big Bus Tours
Does this scenario seem familiar: a European private equity firm reaches into the travel and tourism sector to expand its portfolio and, at the same time, hasten consolidation within the travel and tourism industry’s major sectors? Here’s a quick recap:
February 2016: The sprawling Swedish private equity firm, EQT Partners buys Zurich-based Kuoni (including GTA and AlliedTPro) for $1.4 billion, later spinning off its non-core products, including destination tours, events, activities and attractions tickets.
April 2016: London-based private equity group Cinven and the Canada Pension Plan Investment Board (CPPB) purchases Hotelbeds from TUI. Hotelbeds, the industry’s largest bedbank, is also a major B2B supplier of tours, events, activities and attractions tickets/passes. (The Hotelbeds group’s Transfer and Activity Bank (TAB) is the world’s leading online distributor of transfers, tours and activities. It provides both the industry and the end consumer with a consolidated range of in-destination products worldwide. The company currently offers over 19,000 transfer routes and over 12,000 activity options in more than 650 destinations.)
February 2017: Cinven and CPPB’s Hotelbeds acquires Tourico Holidays, one of the three largest bedbanks in the world (the other two: Hotelbeds and GTA)—also one of the largest B2B supplier of events, activities and attractions tickets. Hotelbeds is now the world’s largest bedbank and, arguably, the largest supplier of tours, events, activities and attractions tickets/passes.
April 2017: Cinven and CPPB’s Hotelbeds acquires GTA. The move makes Hotelbeds the world’s largest bedbank—the only bedbank with a global reach and inventory. It also makes Hotelbeds arguably the largest B2B supplier of tours, events, activities and attractions tickets/passes.
And now: Last week the London-based Exponent Private Equity acquired three leading sightseeing attraction pass companies: Boston-based Smart Destinations, parent company of Go City Card; UK-based Leisure Pass Group; and The New York Pass. All three are B2B and B2C. The combined bands will operate as subsidiaries of a newly formed parent company that will retain the Leisure Pass Group brand name and become what it declares to be “the largest tourism attraction pass provider in the world,” which will operate in more than 30 destinations across the U.S., Europe, and the Middle East, and is projected to deliver over 12 million attraction visits worldwide. (The Leisure Pass Group was founded in 1998 as Arrival Marketing, changing its name to the Leisure Pass Group in 2001. It launched the London Pass in 1999 and the New York Pass in 2002.)
As in the case of the private equity firms that acquired Kuoni and Hotelbed, Exponent did not have much of a track record in the travel and tourism industry, except for its purchase in February 2015 of Big Bus Tours. Last October, Big Bus Tours acquired Smart Destinations, parent of the Go City Card. (The pace of acquisition is so fast that the news release announcing the acquisition still referred to Hotelbeds, Tourico and GTA as separate entities (along with Viatour, that sell the new Leisure Pass).
Exponent describes itself as a private equity firm investing in UK headquartered businesses with enterprise values between £75 million ($97 million) and £350 million ($451 million). In addition to its new acquisition and Big Bus Tours, it has a portfolio of companies that are involved in: train tickets sales; financial services; counseling for graduate students; ship management; business publishing; production of whiskey, gin and vodka; a group of some 40 London theatres; and much more.
Exponent describes itself as a private equity firm investing in UK headquartered businesses with enterprise values between £75 million ($97 million) and £350 million ($451 million). In addition to its new acquisition and Big Bus Tours, it has a portfolio of companies that are involved in: train tickets sales; financial services; counseling for graduate students; ship management; business publishing; production of whiskey, gin and vodka; a group of some 40 London theatres; and much more.
Will there be further consolidation in this sector? Yes, if only due to the kinetic way in which trends develop in the travel and tourism industry build upon themselves. As consolidation has taken part in other segments of the industry (airlines, hotels, car rentals, etc.), some form of it in this new sector seemed inevitable as tour operators, especially U.S.-based receptive tour operators, began including tickets, reservations and reservation services as a part of its product.
Says the travel, tourism and hospitality group research firm, Phocuswright, in an article just published on its website—The Real Revolution in Tours & Activities—“Driven by a slew of B2B reservation system (res system) startups – we have tracked more than 30 currently operating – tour and activity operators are getting wired up. In our first supplier survey, conducted in 2011, just 14 percent of respondents globally reported using a third-party reservation system. In our most recent survey, conducted in 2016, that figure has risen to nearly half.”
