Acquisitions, Happy Tour’s Crisis Recipe

08.05.2011 By Tiron Mirabela

In two crisis years, Spain-held private equity firm GED, which owns Romanian travel agency Happy Tour, signed three successive deals securing the development of an integrated business on the travel market: online plane ticket sales (paravion.ro), luxury packages (Travel House) and holidays (Prestige Tours).

"We secured growth along all business lines through the acquisitions sealed by GED. Now, we are focusing on cementing operations on the Romanian market. I do not believe any further takeovers are necessary," said Javier Garcia del Valle, chief executive officer and vice-president of Happy Tour, in an interview with ZF.

With cumulated turnover of EUR43 million in the wake of the two deals concluded last year (Paravion and Travel House), Happy Tour became the largest company on a market valued at EUR500 million, and the company's business is expanding further.

"In the first six months of this year, we generated 20% higher revenue by attracting new clients. We're trying to maximize the synergies we have," said del Valle, who coordinates a 140-people team.

Last year, GED bought 80% in Travel House, a travel agency specialized in selling luxury packages for internal and international destination. In 2009, Travel House had generated EUR6 million and EUR110,000 in net income. The same year, GED bought Paravion.ro, the largest online agency selling plane tickets, set up in 2005 by Millenium Tour.

This year, the Spanish fund signed another deal, taking over Prestige Tour from businessman Mircea Valdu.

The three companies kept their names and operate independently from Happy Tour, but they come to complete Happy Tour's business.

Happy Tour CEO explained he did not look only at sales, but particularly at operating income. "We must be sure to keep costs low and generate turnover".

Happy Tour has contracts with over 1,000 companies on the Romanian market, with 100 of them each generating revenue of above EUR35,000 a year, according to del Valle. "This year, we organized 2,500 events for companies, up 30% on the year. However, price is still a key factor companies are looking at".

One of the most expensive holidays Happy Tour sold to a Romanian executive cost EUR35,000. Javier Garcia del Valle maintains there were several holiday packages topping EUR10,000.

By yearend, Happy Tour will reach 60 sales points. One of the company's objectives is to expand the national network of associated travel agencies. At present, the group works with 27 travel agencies in 24 Romanian cities.

(English version by Catalina Apostoiu)