More choice, lower prices as tour operator joins forces with Signature Vacations

Consumers should expect more choice and possibly even lower prices in the vacation industry as two of Canada’s major tour operators merge.

TORONTO — Consumers should expect more choice and possibly even lower prices in the vacation industry as two of Canada’s major tour operators merge.

Sunwing Vacations announced Tuesday that it will merge with struggling tour operator Signature Vacations and its SellOffVacations retail division under a strategic alliance with U.K.-based TUI Travel PLC. Precise finance details of the deal were not disclosed.

The move will create a larger company that is better protected from the vagaries of an industry that has taken successive beatings from high fuel prices, the economic downturn and concerns about the H1N1 flu virus.

Sunwing chief operating officer Stephen Hunter said the merger will solidify the company’s position as the number-two tour operator in Canada and will provide travellers with more choice.

“It’s a good combination between Sunwing Vacations and Signature, because Signature is quite heavily focused on Mexico in particular and the Dominican Republic, whereas Sunwing was focused more so on Cuba as well as some other Caribbean destinations,” Hunter said.

“So for our customers they’ll have more choice and more frequency of flights as well to all of the destinations.”

The head of a travel industry association said the merger will strengthen Sunwing’s position in the tour operator market, a move that will likely improve competition in the industry and lower prices as a result.

“I think it makes them a strong player in this market, so that means we continue to have good competition, which will help consumers get the best opportunities and the best pricing that they possibly can,” said David McCaig, president of the Association of Canadian Travel Agencies.

The two merging businesses have fared very differently during the recession. Over the last five years, the Toronto-based Hunter family’s Sunwing Travel Group has seen revenues increase more than 20-fold from $30 million to $660 million and has maintained underlying profitability.

Meanwhile, First Choice Canada, of which Signature Vacations is a division, lost $20 million in the first half of the current financial year.

Airline analyst Jacques Kavafian of Research Capital described the merger as an “amazing move” for Sunwing.

“The problem with Signature Vacations is it’s always been badly managed,” Kavafian said.

“It’s probably the weakest link in the business in Canada, and now Sunwing can do phenomenally well with Signature because they’re getting ($240 million) of revenue and they can almost instantly turn that into a profitable business.”

Hunter said Sunwing plans to keep the Signature brand, despite its problems.

“I think the Signature brand has a lot of value,” he said. “It’s a brand that’s been around a long time, and I think with some of the things that we’ve got planned for it, we’ll be able to make it a strong brand again.”

Just Posted

Bystanders help Innisfail Mountie make arrest

A 35-year-old Ottawa man is facing a number of charges including resisting arrest

More supports for homeless needed for Red Deer

Provincial funding recently announced for Lethbridge

Second Central Alberta born jaguar dies

Mia’s brother Magnum dead at Discovery Wildlife Park

High profile individual delays UCP vote for Red Deer-South

Nomination vote to be held early in 2019

Police back mandatory alcohol screening

New legislation taking effect on Dec. 18 allows alcohol testing of all drivers legally stopped

Orlando SC acquires Canadian Tesho Akindele in trade with FC Dallas for cash

ORLANDO, Fla. — Canadian forward Tesho Akindele was traded to Orlando City… Continue reading

Koskinen notches third shutout, McDavid gets winner as Oilers blank Flames 1-0

EDMONTON — The Edmonton Oilers appear to have shored up their defence… Continue reading

Beyonce performs at pre-wedding party in India

Beyonce brought her star power to a pre-wedding party for the daughter… Continue reading

Kirk Douglas celebrates 102nd birthday

LOS ANGELES — Actor Kirk Douglas got to celebrate his 102nd birthday… Continue reading

Ellen Page steps up attack on Nova Scotia pulp mill’s effluent pipeline

HALIFAX — Hollywood actor Ellen Page is doubling down on her criticism… Continue reading

Pence aide out of running to be Trump’s next chief of staff

WASHINGTON — President Donald Trump’s top pick to replace chief of staff… Continue reading

Swath of South faces wintry mess: Snow, sleet, freezing rain

CHARLOTTE, N.C. — A massive storm brought snow, sleet, and freezing rain… Continue reading

‘I killed my best friend’: Opioids’ fatal grip on mayor, pal

MOUNT CARBON, Pa. — Janel Firestone found her son — the 24-year-old,… Continue reading

Most Read