The summer of 2021 is anticipated as the beginning of the recovery of tourism. And the big companies in the industry, in the heat of this reactivation, are beginning to move. An example of this is the case of Viajes El Corte Inglés and Logitravel, which announced this Wednesday the agreement for their merger. With this operation, they create a travel giant with more than 500 points of sale in the world, which will be the leader in the sector in Spain and with which they will try to compete with large multinationals such as TUI. According to 2019 data, between both divisions they exceeded 3,500 million euros in revenue and had more than 5,000 employees. The operation is still subject to approval by the National Commission of Markets and Competition (CNMC).
This is one more step in the unstoppable process of consolidation of the sector, which has accelerated with the pandemic, so that the travel industry is no longer so atomized in Spain. The company was born without debt and with a solid financial position. And according to market sources, the distribution of control of the group will remain with 75% for El Corte Inglés, while Logitravel will keep the rest, although the final figure is not yet closed. “The resulting company will improve the customer experience in all areas: vacation travel, corporate travel, as well as the organization of events, incentives and conferences,” says El Corte Inglés in a statement.
As financial and legal advisors for the operation, El Corte Inglés has counted on Deloitte, Banco Santander Investment Banking and Cuatrecasas, while EY and Baker & McKenzie have participated on behalf of Logitravel. Jorge Schoenenberger will be the CEO of the new company, a person with more than 25 years of experience in the sector. The name of the resulting company after the merger is still unknown.
“It will be a benchmark in certain products, such as Disney or cruises, and it will have a strong presence in Spain, Portugal, France, Germany and Latin America. This is the starting point of a company that is created with great ambition and with a roadmap in which new alliances are contemplated that could be added to the project ”, El Corte Inglés advances in the note.
With the merger, both El Corte Ingles and Logitravel intend to develop new businesses and a greater internationalization of the business, above what each firm already had separately. In addition, they want to promote new destinations in Latin America, southern Europe and the Mediterranean.
If the sales muscle of both travel divisions is added, the company will surpass the new Ávoris in turnover (it was born after the merger between Globalia and Barceló). It has more points of sale (1,500) and a staff (more than 6,000 employees), but has lower revenues (it reaches about 2,700 million euros).
The union will also help them to face with greater guarantees the competition of online travel agencies, an actor that has given a radical turn to the sector in the last two decades. The processes and offers of these websites have put pressure on the competition, since by offering several services together (flights, hotels, apartments, excursions and rental cars) they get better prices. In fact, while firms such as Booking, Expedia and Hotels.com have become popular in recent years, being the first hiring channel for hotel chains, thousands of physical offices of traditional travel agencies have been closing.
Now, in addition, as tourism sees the light at the end of the tunnel, more and more companies are positioning themselves to take advantage of the recovery. In fact, this is not the first operation in the sector. Nor is it that of one of its two actors, Logitravel, which is part of the tour operator Soltour Travel Partners – a union of Soltour, Grupo Piñero and Smytravel, of Logitravel – which recently began its journey. Separately, they added a turnover of about 300 million euros before the pandemic, a figure that they intend to raise together to 500 million in 2023 or 2024, as explained to EL PAÍS a few weeks ago by its CEO, Tomeu Bennasar.