Emirates Group-owned dnata plans to acquire the British travel agency Stella Travel Services as it expands its global reach.
The Dubai-based travel operator will buy the entire issued share capital of Stella Travel, which includes its TravelBag, Travel2, Sunmaster, Global Travel Group and Triton Rooms brands,
They operate across long-haul travel, holiday packages, online and call centre business segments among others.
Last year, the UAE was Stella Travel’s most popular destination, according to dnata.
The deal, which is awaiting merger control clearance, is the latest such purchase by the company as it seeks to channel more international tourists through Dubai.
In February, dnata acquired Gold Medal Travel Group from the British global travel services operator Thomas Cook for £45 million (Dh269.88m) as the British company looked to pare its losses.
In 2012, dnata signed a joint venture with Travel Counsellors, which designs holiday packages, and acquired the major UK online travel agent Travel Republic in 2011 for an undisclosed sum. In 2008, it bought a 20 per cent stake in Hogg Robinson Group, which is an association of business travel companies, for £30m, as well as 49 per cent in Mind Pearl, a contact centre operator.
Wholly owned by the Investment Corporation of Dubai, dnata has about 200 retail outlets globally and says it handles 2.9 million bookings and 2 million airline tickets annually.
Such mergers and acquisitions by dnata are expected to drive the tourism sector in Dubai as it enables the company to provide end-to-end services such as ticketing to hotel bookings.
“In terms of further mergers, it’s likely that dnata and other Dubai-based firms will continue to look for small but significant piecemeal deals like this that almost instantly add value because such specialist firms already have a big and established customer pool,” said Saj Ahmad, the chief analyst at StrategicAero Research.com.
The global travel booking industry is consolidating as people increasingly use websites to book flights, hotels and hire cars. Last year, the online portal Expedia acquired the German hotel search website Trivago, and in the previous year another US travel portal, Priceline, purchased Kayak. Expedia paid €434m (Dh2.06 billion) for a majority stake in Trivago. Priceline bought price comparison website Kayak in a $1.8bn deal.
In May, Saudi Arabia’s Al Tayyar Group acquired the British travel company CTM for £13.5m. Four months earlier, it bought Elegant Resorts, a luxury tour provider, from Thomas Cook for £14.3m.
India, one of the fast-growing outbound travel markets, is also experiencing a shake-up in its travel sector. In February, Makemytrip.com, an online travel portal that gives access to hotel bookings, tickets and holiday packages, bought the Dutch company EasyToBook.com, which provides bookings in North America and Europe among others, for $5m. In 2012, it bought a majority stake in the Thai travel company ITC Group for $3.2m.
Stella Travel made a profit of £1.33m in the fiscal year ending June 2013, the most up-to-date figures available from the UK’s Companies House. That was an improvement on the £722,000 it made a year earlier as it sold more holiday packages to Dubai and the Middle East. It had 375 employees at the time.
ssahoo@thenational.ae
Follow The National's Business section on Twitter
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Company Profile
Company name: Cargoz
Date started: January 2022
Founders: Premlal Pullisserry and Lijo Antony
Based: Dubai
Number of staff: 30
Investment stage: Seed
MATCH DETAILS
Barcelona 0
Slavia Prague 0
WHAT IS THE LICENSING PROCESS FOR VARA?
Vara will cater to three categories of companies in Dubai (except the DIFC):
Category A: Minimum viable product (MVP) applicants that are currently in the process of securing an MVP licence: This is a three-stage process starting with [1] a provisional permit, graduating to [2] preparatory licence and concluding with [3] operational licence. Applicants that are already in the MVP process will be advised by Vara to either continue within the MVP framework or be transitioned to the full market product licensing process.
Category B: Existing legacy virtual asset service providers prior to February 7, 2023, which are required to come under Vara supervision. All operating service proviers in Dubai (excluding the DIFC) fall under Vara’s supervision.
Category C: New applicants seeking a Vara licence or existing applicants adding new activities. All applicants that do not fall under Category A or B can begin the application process through their current or prospective commercial licensor — the DET or Free Zone Authority — or directly through Vara in the instance that they have yet to determine the commercial operating zone in Dubai.
Company Profile
Name: HyveGeo
Started: 2023
Founders: Abdulaziz bin Redha, Dr Samsurin Welch, Eva Morales and Dr Harjit Singh
Based: Cambridge and Dubai
Number of employees: 8
Industry: Sustainability & Environment
Funding: $200,000 plus undisclosed grant
Investors: Venture capital and government
A Cat, A Man, and Two Women
Junichiro Tamizaki
Translated by Paul McCarthy
Daunt Books
How to register as a donor
1) Organ donors can register on the Hayat app, run by the Ministry of Health and Prevention
2) There are about 11,000 patients in the country in need of organ transplants
3) People must be over 21. Emiratis and residents can register.
4) The campaign uses the hashtag #donate_hope
A Long Way Home by Peter Carey
Faber & Faber
Stamp duty timeline
December 2014: Former UK chancellor of the Exchequer George Osborne reforms stamp duty land tax (SDLT), replacing the slab system with a blended rate scheme, with the top rate increasing to 12 per cent from 10 per cent:
Up to £125,000 – 0%; £125,000 to £250,000 – 2%; £250,000 to £925,000 – 5%; £925,000 to £1.5m: 10%; More than £1.5m – 12%
April 2016: New 3% surcharge applied to any buy-to-let properties or additional homes purchased.
July 2020: Chancellor Rishi Sunak unveils SDLT holiday, with no tax to pay on the first £500,000, with buyers saving up to £15,000.
March 2021: Mr Sunak extends the SDLT holiday at his March 3 budget until the end of June.
April 2021: 2% SDLT surcharge added to property transactions made by overseas buyers.
June 2021: SDLT holiday on transactions up to £500,000 expires on June 30.
July 2021: Tax break on transactions between £125,000 to £250,000 starts on July 1 and runs until September 30.
