TUI Travels set to enter alliance with Sunwing Vacations

Canada’s Sunwing Vacations and British TUI travels are reportedly set to enter a strategic alliance announced last week.

The alliance will absorb Sunwing Vacations’ struggling rival Signature Vacations. The new deal will see Signature Vacations being absorbed along with its retail division SellOffVacations, and an additional input of $101 million.

Sunwing Vacations has confirmed that it will retain the Signature Vacations brand, even after the merger. Signature Vacations has had a bleak few months recently, with its parent company, First Choice Canada losing between $20 million in the first half of this fiscal year alone.

Sunwing Vacations on the other hand, has performed remarkably well in the face of the global recession and the concurrent drop in worldwide travel numbers. Owned and operated by the Toronto-based Hunter family, the company has seen its revenues skyrocket over the last five years: from $30 million to $660 million.

The alliance between TUI travels and Sunwing Vacations is aimed at creating a larger company, better suited to weather the ups and downs in the travel industry.

The new deal will see Sunwing Vacations maintain control of the new company, in partnership with TUI Travels- owner of Signature Vacations. TUI Travels will also provide the $101 million injection, and will receive a 49% ownership in the Sunwing Travel Group, which comes with a 25% voting interest. Details financials were not disclosed, but it is expected that the merger will lead to more choice and possibly cheaper prices for the consumer.