Midcounties Co-op will target more online travel agency members after welcoming the retail division of On Holiday Group (OHG) to its consortium last week.
The deal will see OHG provide Midcounties shops, homeworkers and call centre with a white-label version of its Fresh Holidays selling platform.
This will provide Midcounties agents with deals negotiated by OHG. The group will also offer Midcounties members the services of its overseas hotel contracting team.
For OHG, membership of the consortium provides it with cost-effective access to Atol cover and Abta membership as well as credit card merchant deals and insurance such as supplier failure.
Steve Endacott, chief executive of OHG, which left Thomas Cook-owned Freedom Travel Group to join Midcounties, said:
“Midcounties has come up with a special OTA model. It is targeting large and medium-sized OTAs that have to be profitable but by coming together they get better terms.
“The commercial proposition from Midcounties was obviously attractive but the deciding factor was the quality of the management team and its vision for Midcounties, combined with how On Holiday Group as a whole could fit into this.
“In a market where everybody has the same hotel and flight stock, it is important to differentiate a company’s offering.
“Working closely with Midcounties to understand its customers’ requirements will allow our buying team to approach hotels for special offers specific to this channel.
“Given Midcounties’ current scale and plans to expand its consortium via online travel agents, call centres and high street agents, we believe our investment to deliver this product is justified and will greatly benefit both parties.”
Midcounties’ strong balance sheet and size are expected to be attractive to potential members, who will not have to tie up cash in bonding and will have access to the technology on offer.
A new Co-op Recommends brand has been created for OHG’s exclusive Midcounties deals, which will focus on hotels with high user-review scores.
The OHG tie-up will allow Midcounties to create its own mass-market beach holidays with access to all low-cost carriers including, it is understood, Ryanair.
Midcounties travel general manager Alistair Rowland said the tie-up with OHG will allow it to create both mass-market beach holiday product and specialist tour operations specifically suited to its members’ and agents’ customers.
“The successful retailers of the future most obviously work closely with the major tour operators to sell their ‘differentiated’ holiday product which only they can provide.
“However, outside of this players with scale must take their destiny in their own hands and work with the best in class airlines and hoteliers, whilst keeping operating cost to a minimum.
“We have set up the Midcounties Consortium to deliver exactly this to our members and incorporating the On Holiday Group into this structure provides obvious benefits.”