Independent accommodation specialist youtravel.com more than doubled its UK sales turnover in its second year, and is on track to make a significant profit in its third year. In its second year, to October 2008, the company saw UK turnover soar from £32 million to £70 million and a substantial improvement in EBITDA following losses in its first year of operation when incurring start-up costs. Passenger numbers also doubled to 500,000 in year two.
Group managing director Graham Nichols said: “Youtravel.com reached break-even in only its second year of operation excluding some small one-off costs. This is an impressive feat for a start-up in this industry and particularly in the economic environment of the last 12 months.
“We have now reached scale and have excellent market share in the UK while maintaining our independence and service commitment to our UK customers. Our aim is now to achieve the same in our international markets. This means that we are able to diversify our business and spread the risk which is an important factor in today’s climate.”
Barclays Ventures is the major shareholder in youtravel.com and has been since its launch in October 2006.
Dimitrios Tzililis, Barclays Ventures’ portfolio director said: “We have been impressed with the company and how it has navigated the market, which has presented challenges for the entire travel industry.
“Barclays Ventures has worked with youtravel.com since its inception and we continue to be wholly supportive of the business.
“We work closely with the board in shaping the future strategy of the business, and we have been impressed by the encouraging signs of booking levels returning to, and overtaking, those of last year from May onwards.
“We have recently appointed Niels Andersen as the new chairman of youtravel.com and together with the whole management team, we are excited by the progress made and the future potential in this scale-able and now profitable business.”
Nichols added: “For us, the focus as we end our third year and enter our fourth is to concentrate more on profit rather than such rapid growth in the UK.
“We are, however, expecting to pursue aggressive expansion programmes in our international markets which have higher margins and huge potential. We are on-track to make significant profit in our third year ending October 2009 thanks to a more streamlined operation, exclusive product and a buoyant late-booking market this summer.”
Sales in June were up 18 per cent on the same month in 2008 and July figures look to be very similar. Youtravel.com saw a series of record sales days in July, reaching more than 30 per cent revenue increases compared with the same point last year.
Nichols attributed this success to support from the business’ partners in response to the overall youtravel.com proposition.
He said: “More than 95% of youtravel.com’s business is transacted through the trade and this shows no sign of changing. The travel trade is our lifeblood, there’s no way we would be where we are now without the strong trade partnerships we have.”