The major online t. o. On the Beach has decided to suspend the operation of the travel agency Classic Collection and is focusing on B2C activities. The announcement was made today (September 24) just before the year-end close, ahead of the final results on December 2.
This decision is a strategic choice that will allow the dynamic development of the On the Beach brand, as it will focus on consumers and their vacation packages, which will generate more revenue. However, On the Beach reported that bookings for the summer of 2025 were 12% higher than last year. Winter bookings are also up 12%, while organized holidays for the summer of 2026 are delayed.
Announcements
According to today’s announcement, B2C activity continues to grow much faster than the package tour market. More specifically:
- Third consecutive year of record growth:
- Total transaction value (TTV) £1.23 billion, an 11% increase from last year.
- Summer 2025 bookings increased by 12% compared to 2024, significantly higher than the package holiday market.
- The expansion of the product continued at a rapid pace: 155 cities available.
- Establishing a presence in the Republic of Ireland with a net investment of £2 million.
- Significant increase in operating efficiency, with an expected EBITDA margin of approximately 34% (FY24: 31.7%), accompanied by improved customer satisfaction metrics, including a record Net Promoter Score (+17% to ~55).
- Winter 2025 bookings remain strong, 12% higher than last year’s record.
- Summer 2026 bookings reflect the market trend for bookings closer to the departure date.
- Adjusted pre-tax profit (PBT) for FY25, on a continuing basis (excluding B2B), is expected to be between £34.5 million and £35.5 million.
Discontinuation of non-core B2B activities
- The Board of Directors made the strategic decision to begin a smooth cessation of the B2B activity with the Classic Collection brand, which showed a small loss within the year, in order to focus on the B2C activity with the On the Beach brand, which has higher growth prospects.
- The B2B segment will be presented as a discontinued operation in the final results.
Successful refinancing with a new £120 million facility
- OTB ends the year debt-free and with a strong cash position of approximately £90 million.
- The Company completed a refinancing with Lloyds, NatWest, and HSBC, entering into a new four-year £120 million credit facility with an optional accordion increase of an additional £30 million.
- This new agreement replaces the previous one that expired in 2027, providing significant additional balance sheet flexibility with improved pricing.
- The agreement reflects OTB’s strong track record and confirms the banks’ keen interest in supporting the Company’s medium-term ambitions.
New £25 million repurchase of own shares
According to the capital allocation policy, the Board of Directors has decided that there is sufficient excess cash to proceed with a share buyback program of up to £25 million, in addition to the £30 million already returned to shareholders through buybacks and dividends within FY25.
Shaun Morton, Chief Executive of On the Beach, commented: “I am pleased to report another year of significant growth with record TTV of £1.23bn, representing a 11% increase on FY24. Our core B2C business has again outperformed the market, underpinned by the Group’s asset light, cash generative model and balance sheet strength. The team has had a busy year, with 155 Cities now on our website and a presence developed in the Republic of Ireland. Both exciting workstreams have landed well with our customers and we look forward to expanding the offer in FY26. It remains clear that customers are still prioritising their holidays with our Winter 25 bookings up 12% and we are confident that Summer 26 will continue to build, notwithstanding the later booking patterns. The Board and management team remain focused on delivering the Group’s medium-term ambition of TTV of £2.5bn, EBITDA of £100m and Adjusted PBT of £85m and I look forward to updating further at our final results in December.”
Sadness in the industry
Travel agents and former employees of Classic Collection expressed sadness and disappointment following the announcement that parent company On the Beach is to close the well-known tour operator.
Classic was founded in 1988 and built its reputation offering holidays in Europe, North Africa, Bermuda, and the Caribbean.
In August 2018, it was sold to On the Beach for £20 million in a deal brokered by CEO Nick Mandey.
In a message to its commercial partners, the company stated: “We would like to sincerely thank you for your continued support and cooperation. We truly appreciate the relationships we have built together and understand that this announcement may cause disappointment and uncertainty. We assure you that we remain committed to taking care of you, your customers, and any existing agreements.”
On the Beach
On the Beach Group plc is one of the UK’s largest online holiday specialists, with significant growth prospects. Its innovative technology, low operating costs and strong customer value proposition are creating a structural challenge for traditional tour operators and online travel agencies as it continues to disrupt online retail sales of beach holidays. Its business model is customer-centric, light on fixed assets, profitable, and highly cash-generative.
