Mid-sized UK online agent and trade accommodation supplier Alpharooms has been sold to Teletext Holidays parent Truly Group.
The Sheffield-based firm is an Abta member and specialises in selling hotel rooms, but according to the CAA website does have an Atol licence covering 2,500 passengers for the quarter to December 2016 for flight plus hotel sales.
How much Truly paid for Alpharooms was not disclosed. In a statement Alpharooms said it carries 850,000 passengers annually and the brand will continue to operate separately in the Truly Group.
Truly Travel’s commercial director, Peter Panteli, said: “This is a very exciting deal, which overnight more than doubles the group’s hotel buying power.
“There is little overlap between the businesses, with Teletext focused on the call to book market and Alpharooms in the online sector, giving us confidence that the expansion of both brands moving forward will come at the expense of our competitors.”
Jacky Bedlow, chief executive of Alpharooms, added: “Alpharooms is a well known brand in both the UK & Ireland and has been trading successfully online for over 15 years.
“We are now set for further expansion on the back of this transaction and the increased financial strength the combined group offers. This is “Truly” a deal where two plus two can make five very quickly.”
Teletext managing director Wayne Perks said: “This is a fantastic deal for our fulfilment partner and for the Teletext Holidays business, as it helps us to offer our customers a far wider range of products and services at even more competitive prices.”
According to accounts lodged with Companies House for the year to September 30 2015, parent Alpharooms Accommodation Ltd saw profitability dip, EBITDA falling from £858,000 in 2014 to £570,000.
The firm saw a fall in Total Transaction Values from just under £100 million to £87.76 million, however turnover (retained commission) actually grew from £10.7 million to £12.32 million.
The accounts state: “The directors consider the results to be satisfactory given the exceptional nature of some of the factors the group during the period and the general economic climate in which the group has and continues to operate.”
The accounts also reveal the firm continues to be in dispute with Her Majesty’s Revenue and Customers over a VAT bill which is likely to be decided by a tax tribunal.
This relates to an HMRC crackdown on bed banks it claimed were failing to pay VAT under the Tour Operators Margin Scheme (Toms).
Although the tax office lost a long-running dispute with former Lastminute.com and Thomas Cook bed bank Medhotels, tax assessments remain outstanding on a number similar firms.
Apharooms says it “acted prudently” and had recognised the VAT liability and a corresponding corporation tax rebate in its accounts.
Sources told Travel Weekly a combination of the VAT liability, understood to be worth as much as £6 million, and a downturn in trading this year have hit Alpharooms. Sources said as a result Truly had picked up the online agent “for a song”.
Talks to sell the business became critical last month as a deadline to renew Alpharooms’ Atol loomed on September 30. It is understood the CAA allowed an extension to complete the deal as it did with Monarch Airlines.
Alpharooms’ sales are 85% bed only and the rest packages, which will complement Teletext Holidays’ mainly package offering.
In April Alpharooms launched a trade arm, Betabeds, led by head of sales and operations, Emma Lelliott, who joined Alpharooms in August from Thomas Cook-owned Medhotels.
This came after another former Medhotels boss, Bedlow, was brought in as chief commercial officer after a short stint at rival bed bank YouTravel.
Bedlow replaced Jamie Shuker who quit after five years to explore other opportunities. She is listed on Companies House as one of two Alpharooms directors, the other being Jason Fry.
There was no indication about the future of Betbeds but the volume of trading through the brand is understood be low.
In 2008 Alpharooms was named as one of the UK’s fastest growing firms in the Real Business/LDC Hot 100 league table.
Problems with the Betabeds website over the weekend prompted trade rumours online about the firm’s financial situation, but the issues were blamed on a technical hitch.