The Helloworld Travel Ltd (ASX: HLO) share price is climbing higher today. This comes after the company released news about an acquisition of CruiseCo and renewed partnership with Qantas Airways Limited (ASX: QAN). At the time of writing, the Helloworld share price is up 5.2% to $2.83.
Acquisition of CruiseCo
Helloworld advised it has entered into an agreement to acquire cruise wholesale company, CruiseCo.
Founded 20 years ago, CruiseCo is a specialist cruise package wholesaler led by Kevin Dale, Phil Hoffman, and Steve Lloyd. The company has over 250-member travel agencies with access to more than 50 global cruise lines. Prior to COVID-19, the company had an annualised total transaction value (TTV) of $70 million throughout Australia.
The acquisition will align with Helloworld's strategy of expanding its cruise offerings in Australia and New Zealand. Furthermore, the takeover will compliment Helloworld's existing cruise wholesale business, Seven Oceans Cruising. The latter recorded an annual TTV of around $110 million before COVID-19 hit the tourism market.
The acquisition will be funded from the company's cash reserves and the purchase is not considered material.
Commenting on the acquisition, Helloworld executive director Cinzia Burnes said:
These two businesses, when combined, provide Helloworld Travel with a comprehensive range of cruise options for our retail agencies in Australia and New Zealand.
Given the recent demand for some 2022 specials in the market, the positive news around both the development of a vaccine and rapid testing capabilities, we are confident that demand for cruising will come back strongly from 2022 and we look forward to working with our cruise partners and agencies to capture that demand.
Renewed Qantas partnership
The Helloworld share price is also reacting to news today that Helloworld has renewed its partnership with Qantas.
The new commercial agreement will promote and sell the national carrier's fares and products until 2023. The multi-year deal is said to provide confidence to Helloworld in the recovery of the ailing sector.
Helloworld CEO and managing director Andrew Burnes welcomed the deal, saying:
We have had a longstanding partnership with Qantas and the continuation of that was an important component in securing our position as their leading travel agency partner and ensures our owned businesses and agency networks can continue to sell Qantas with confidence.
Qantas global sales and distribution executive manager Igor Kwiatkowski said the agreement helped cement a long-standing relationship with Helloworld Travel "as their number one airline supplier in Australia".
Despite the devastating impact of COVID-19 on the industry, we're starting to see really positive momentum from the trade as domestic travel restrictions start to ease.
We are pleased to be working together to focus on opportunities that benefit our businesses – including joint marketing and sales activities – as the travel industry starts to recover.
Helloworld share price summary
The Helloworld share price has been soaring since the start of November. Its shares reached from a low of $1.67 to now $2.79, representing a gain of 67% in just 3 weeks. However, the Helloworld share price is still down on a high of $5.03 in January before the onset of COVID-19. The company fell to an all-time low of 67 cents in March.
