Travel industry deals, for which have advised on Management Due Diligence, are currently enjoying a hot spell and the £73m secondary buyout of online business On The Beach was the fourth private equity transaction in the sector on which we have advised in under 18 months.

We acted for Inflexion on this occasion and, since June 2012, have advised Growth Capital Partners on its investment in online ski and cruise agent Iglu, ECI Partners on its acquisition of a majority stake in premium rail travel company Amber Travel, and Palatine Private Equity on its backing for a management buyout of holiday price comparison business Icelolly.

It’s not often that we see such a flurry of deal activity in one sector in such a relatively short period.

Online travel businesses with strong growth potential are proving increasingly attractive to investors, and we expect more deals in the sector in the coming months and Management Due Diligence work.

With consumers still feeling the pinch, the popularity of booking over the internet has never been greater, mainly due to the savings available.

Many travel management websites have access to discounted rates which are not necessarily available to travel agents, while the automated booking process also helps to keep down costs.

Online booking is more time-efficient for the consumer and busy people don’t always have the time to go into a travel agency. Booking on the internet from the comfort of their home or workplace is much easier, while the ability to do so via mobile devices makes it even more so.

In the not-too-distant past we acted on transactions involving LateRooms, ATPI and Griffin Travel and, together with the recent deals, we have greatly developed our understanding of the market and thereby our ability to deliver greater value to our PE clients.

Ensuring the travel companies in which PE houses are investing have the right calibre of management to take the business to the next level is a key part of the service we offer – we call it our human capital planning. We look at whether the business already has someone with the focus and skills to deliver, or whether the team needs to be strengthened.

For example, it may be critical that these travel businesses have an internationally-focused sales director, if such a role will be strategically important in helping them fulfil their growth potential.

Britain has been ahead of the curve in the online travel sector, and businesses are now looking to replicate their domestic success in emerging markets such as Germany, elsewhere in Europe and in the Far East.

Some businesses want people on the ground overseas to expand organically, while others are seeking acquisitions.

The demands made in these businesses of the role of marketing director is another important consideration. Nowadays, companies must make use of sophisticated customer analysis and other dynamic complex data, and they increasingly need to be agile in terms of their marketing, so it’s vital to ensure the right person is at the helm.

Other key roles include those responsible for managing relationships with suppliers. Product development is absolutely crucial for online travel businesses, and good relationships with suppliers enable them to put together attractive packages for consumers.

Many travel businesses endured tough times in the wake of 9/11, the ash cloud crisis and the recession, but those which have remained fleet of foot have continued to be successful and now offer a great opportunity for their management teams to realise the value to shareholders they have built.

At the same time, while there is inevitably some inherent risk, there are demonstrable returns for private equity houses looking to invest in a sector with lots of potential.

The Quinn Partnership is the UK’s leading provider of Management Due Diligence and has been named ‘Management Due Diligence Firm of the Year’ for the past 5 years, working closely with Private Equity. For more information call 0161 924 2280.