With international travel having come to a standstill since the onset of COVID-19, it’s been tough sledding for the tourism industry, but participants are finding help amongst their fellow brethren with Helloworld Travel (ASX: HLO) acquiring cruise wholesaling specialist, CruiseCo.
Acquired for an undisclosed amount, cruise tourism has been decimated by the pandemic with the sector copping a reputational onslaught amid horror passenger stories from cruise liners that were responsible for the initial infection to many countries.
Whether holiday makers will want to return to cruises in the post-COVID world is still unknown, but considering it is unlikely travelers will want to sail the seas until a vaccine is available, Helloworld has no immediate plans for their acquisition, flagging 2022 as the year to relaunch the cruises industry.
“Given the recent demand for some 2022 specials in the market, the positive news around both the development of a vaccine and rapid testing capabilities, we are confident that demand for cruising will come back strongly from 2022 and we look forward to working with our cruise partners and agencies to capture that demand,” said Helloworld Executive Director, Cinzia Burnes.
Turning over more than $70 million annually in holiday packages prior to the onset of COVID-19, CruiseCo will complement Helloworld’s existing cruise wholesale business – Seven Oceans Cruising, which itself turned over $110m in total transaction value before the pandemic.
Also announced alongside their acquisition of CruiseCo which will be funded from cash reserves, Helloworld has renewed its partnership with Qantas (ASX: QAN) with a new three-year agreement to sell Qantas flights and products until 2023.
“This agreement helps cement our long-standing relationship with Helloworld Travel as their number one airline supplier in Australia,” said Qantas Executive Manager, Global Sales & Distribution, Igor Kwiatkowski.
“We are pleased to be working together to focus on opportunities that benefit our businesses – including joint marketing and sales activities – as the travel industry starts to recover.”
HLO shares responded well to news of the CruiseCo acquisition to close at $2.80, a 4% rise on their previous $2.69 close but still well short of the $4.50 range HLO shares were trading at before the onset of COVID-19.
Alfred Chan is an Analyst at Emerald Financial, specialising in ASX-listed small cap companies.
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