Portfolio Management

Travel Class

Aberdeen managed VCTs invested in Travel Class in March 2005 when we backed the management buy-out of the business. Travel Class is a specialist tour-operator that provides residential activity courses and ski trips for schools and other organizations.

The business was established in 1994 and offers two main products. Junior Choice Adventure provides residential multi-activity courses for 8-14 year olds. Activities range from climbing, abseiling and fencing to watersports such as canoeing and surfing. The second product is Ski Class which provides all aspects of a group’s ski trip, including transport, full board accommodation, lift pass, ski instruction, ski hire and insurance. Both products have exceptionally high quality thresholds and are delivered at competitive prices leading to superb customer loyalty and repeat booking rates.

We were attracted to Travel Class by the quality of the management team, high margins, the level of repeat bookings and strong market dynamics. We also identified two particularly attractive features: firstly, consolidation was underway in the sector, with several competitors changing hands as the market leaders jostled for position and, secondly, major tour operators were actively seeking to expand into higher margin activities. We were condiment that this would offer excellent exit potential for our clients’ investment.

The sale process was launched in later 2005, just months after the original deal, and we were able to secure a price for the business which fully reflected its growth potential. First Choice Plc, one of the UK’s leading tour operators, responded quickly and delivered the deal in four days of hectic legal negotiations. Just fifteen months after the initial investment we were able to generate a very healthy return for our clients of 2.6x the original investment of £1.25 million.