TUI AG, Europe’s largest tour operator, is apparently moving ahead with the sale of its Palma-based online hotel booking business Hotelbeds Group, which could fetch about one billion euros.
The Hanover-based company is understood to be working with Deutsche Bank and Bank of America to prepare a disposal, but the negotiations are being kept very private.
No final decision has been made on the sale, which may kick off early next year, and Hotelbeds is likely to attract bids from private equity firms and travel companies.
CEO Friedrich Joussen said in May that he will focus the company on hotels and cruise ships while cutting back online activities in an effort to drive annual operating profit growth by an average 10 per cent a year up to 2018.
At the time, the company said it would hold on to Hotelbeds in the near-term and "evaluate options" for the business. TUI runs Hotelbeds as an independent company.
Now it appears that TUI feels that, in order to maintain its position as a major global player in the travel industry, it needs to expand its fleet of planes, its number of cruise ships, its coaches for road transport while also investing in the very latest technology. This requires funds and the money for the restructuring of the company for the future is apparently going to come from the sale of Hotelbeds.
Hotelbeds offers rooms to online and traditional travel agencies and airlines with a database of beds at more than 72,000 hotels worldwide, plus transfers and tours.
First Choice Holidays started Hotelbeds in 2001, and it merged with TUI AG’s travel unit to form TUI Travel in 2007.
Some 1500 people now work at Hotelbeds, which is located near Palma airport, and it is understood that the sale does not pose a threat to any jobs.