Travel technology developer Atcore is actively seeking further acquisitions as it looks to create a group of software providers for the travel industry.
The firm, which supplies its Atcom reservation system to the likes of Tui and Thomas Cook, brought Tiger Bay into the group last December to focus on mid-sized operators.
Atcore, formerly known as Anite Travel, was the subject of a £45 million management buy-out backed by Lloyds Development Capital from former parent Anite in May 2014.
Dave Cruikshank, Atcore chief executive, said under private equity ownership the firm now has the freedom to “choose its own path”.
“We have the ambition, the willingness and financial wherewithal to make further acquisitions,” he said.
“We are seeing a really nice rate of growth, so we can be quite fussy. We either want the product in the market that’s growing the fastest or the market leader.”
Cruikshank said Atcore will look at “adjacent sectors” in travel in which Atcore currently does not have a presence and also overseas markets like the US and APAC.
Currently 35% of Atcor’s revenues come from outside the UK and says it is seeing single digit revenue growth and double digit profit growth.
Since the mergers of the Big Four vertically integrated operators in the UK, Atcore has re-engineered its technology to move on from its old legacy platform.
Cruikshank said although Atcore lost two of its biggest customers in that consolidation – First Choice and MyTravel – it was probably the best thing that could have happened.
It has since won business back from both Cook and Tui following a post-merger period in which they brought technology in-house.
Cruikshank said Atcom has evolved from its heritage as a vertically integrated reservation platform to embrace a more flexible approach with more third party connectivity.
“Dynamic packaging has become indistinguishable from regular packaging,” he said.
“Look at booking volumes and you’ll see packages are growing faster than FIT [Fully Inclusive Tours].
“For an OTA like On The Beach, more than half of their hotels are now directly contracted. If you don’t have unique content you are just a ubiquitous marketplace competing on price.
“This is a very difficult business to be in if don’t have a unique selling point. What is very interesting is how this changes yield management to not just on price but inventory.
“If you are a tour operator and you know a destination is going to sell out you hold back your own inventory and sell someone else’s.
“The consumer does not care if it is tour operator product or DP, they just want a fast, flexible, intuitive booking interface. That’s a big mid and back office challenge.
“The big issue with DP is accuracy of pricing and availability information. It also creates a mass of search load.
“Big operators want to fill the gaps in their programmes with lower volume destinations and get higher share of consumer wallet by fulfilling more of their holidays like city breaks.”