Summer 25 marks the 5th year of Easyjet Holidays operating as a separate holidays division with a dedicated internal management team running the business, and the company is expanding rapidly, readying itself to challenge Jet2 Holidays for the top spot as the UK’s largest Tour Operator. However, its history begins well before this milestone date.

Initially, Easyjet Holidays was created as a quick response to the success of Jet2 Holidays, which I helped Philip Meeson, and his team launch in 2007 after presenting the opportunity of launching a Dynamic Packaging tour operation on the back of their low-cost airline to fill the gap in the market left by the effective closure of MyTravel in the North following its merger with Peterborough-based Thomas Cook in the same year.

Having served as MyTravel’s Deputy Chief Executive, I gained direct insight into the threat posed by low-cost carriers and the internet to the dominance of large, vertically integrated groups in the package holiday sector. When MyTravel encountered difficulties in 2003, I left and founded the “On Holiday Group” together with MyTravel’s Purchasing Director Bill Allen and Cosmos Sales Director Brian Young, to exploit the rapidly developing dynamic packaging market, and quickly tied up with Jet2.

However, our time as technology and bed bank partners was always limited once Meeson recognised the strategic advantages of having an in-house tour operation, and after two years, he brought in Steve Heapy and many other former Mytravel staff to run his own operation.

Ironically, this in turn led to an opportunity to provide a tour operating platform to Easyjet Holidays in partnership with Hotel Beds, who operated Easyjet Holidays between 2014 and 2017. In truth, the experience was a frustrating one, as Easyjet always saw the tour operation as a “non-core” business and just a way of boosting ancillary income. They even refused repeated pitches to allow us to sell via the trade, as they saw it as a distraction they did not need.

This all changed when Johan Lundrum moved from managing the vertically integrated tour operator TUI to becoming Easyjet Airways’ CEO. He clearly recognised the advantages of a full-scale Easyjet Holidays and recruited Garry Wilson, along with several other former TUI staff, to oversee the new operation that launched in April 2019 for Summer 2020.

However, the timing could not have been worse, with Covid-19 taking hold in March 2020, effectively destroying the Summer 2020 and 2021 seasons before a slow relaunch in 2022. Nevertheless, Easyjet Holidays’ flexible model and lack of hotel guarantees allowed it to minimise losses compared to the UK’s market leader TUI, which accumulated substantial losses and debts during this period.

COVID-19 also taught holiday makers that DIY holidays came at a substantial risk, and a massive 31% expressed a wish to switch to ATOL bonded holidays, which the new operation was perfectly positioned to provide to its Easyjet Flights audience.

The 2022 year proved the concept for the new operations with its 1.1m carryings delivering a healthy £39m profit for the group. Passengers and profits have since been on a massively positive upward spiral, culminating in 2024’s 2.4 million passengers and £190 million group contribution.

I believe that Easyjet Holidays is just beginning its UK expansion and will continue to grow at a healthy rate of 25% per year, as it currently accounts for only 5.4% of its parent airline’s seats. In contrast, Jet2 Holidays is already reaching capacity limits, using on average 66% of its parent airline’s seats, with some core beach routes exceeding 80%. Easyjet Holidays can expand quickly by selling more to its airline customer base, whilst Jet2 Holidays depends on its parent airline opening new bases and routes, which requires creating new demand. Meanwhile, Easyjet is simply shifting customers from flights alone to package holidays.

Easyjet also has a £50 profit advantage per passenger over its OTA competitors, as it can capture a large share of free brand traffic from its parent flight-only business. This can be used to reduce prices or to outbid these companies for advertising clicks, both of which suggest that Easyjet Holidays will grow more quickly.

So no matter how you see it, the future is “Orange,” and I expect that over the next 5 years Easyjet will become a market leader with 8 million passengers. So the interesting question is,” Who will bear the cost of this growth?

I expect 65% of the extra 5.6m to come from simply converting Easyjet flight customers from DIY holidays to packages, but this leaves 35% or 2m to come from increasing market share at the expense of competitors.

Ironically, Jet2 Holidays’ current significant strength in trade distribution could become a weakness, as it has been secured at a low commission rate of 6% if agents want price parity. You might easily see some of this being lost if Easyjet offered volume-related commission overrides above this.

The rejuvenated Tui holidays, now that it has paid off most of its debt mountain and also agreed on a strategic distribution deal with Ryanair, look quite secure, as it has no competitors for its Dreamliner long-haul beach product.

So, this leaves the likely losers to be the OTAs Love Holidays and On the Beach, particularly as we see a migration from their Google PPC heartland to AI Search, where it is likely asset holders will be given preference.

This makes Love’s February 2026 IPO crucial for the business as it seeks to defend itself from the ever-expanding “Orange” machine.

The next 5 years are likely to be highly interesting.

Since the launch of “We Love Holidays” in 2012 by Alex Francis and Jonny Marsh, the company has adeptly navigated the industry, attracting a panel of industry luminaries as early-stage investors to enhance their credibility with Meridian Corporate Finance, which provided the initial £2m expansion capital.

They invested this money in developing the best “Caching” solution in the travel sector, which enabled them to take live API feeds from bed banks and build databases of prices that could be easily combined with similar flight “caches” to generate billions of holiday options.

This may seem simple, but developing algorithms to determine how often prices should be updated based on factors like time before departure, party type, or duration is complex. These algorithms are vital for minimising any price jumps customers notice when shifting from cached pricing, which might be outdated, to live prices required for booking.

Caching prices enabled Love to both speed up its results presentation and introduce innovations such as the “Month” view on hotel landing pages, where customers could see all the prices by date of arrival at the hotel, including flight costs. These allow them to choose the cheapest travel options if their dates are flexible.

However, it was not until Living Bridge bought the business for £190m in 2018 that the company had the capital needed to expand from 140 to 750 staff and implement a highly aggressive Google PPC bidding strategy that saw them reach the top spot on most travel search terms.

Like most travel businesses, Love was devastated by Covid-19 and suffered significant losses. However, its recovery from Covid has been remarkably impressive, with passenger numbers reaching 5 million and profits of £67.6m in 2024, twice that of their closest competitor, On the Beach, whom they have blown out of the water in terms of growth rate.

Few Venture Capital firms are willing to hold their investments longer than five years, and even with the disruption caused by COVID-19, Living Bridges’ exit is now long overdue. Having failed to find a trade buyer or VC investor, Love’s owners appointed Rothschild in July 2025 to facilitate an IPO that values the business at an eye-watering £1 billion in the first quarter of 2026.

In many ways, Love’s IPO timing is ideal.

Previously, there had been serious doubts about their long-term access to low-cost flight seats as Jet2 and Easyjet continued to expand their own tour operations and impose API fees of at least £24 per booking, damaging either the ability to offer competitive pricing or profits of OTAs. At the same time, Ryanair was actively hostile, trying to block access to their seats and calling OTAs like Love “Pirates” that were “Conning” customers and marking up Ryanair flights above their actual cost.

However, in January 2024, Rynair did a complete “U-turn”, with Love becoming the first Ryanair-approved package holiday provider, with access to all Ryanair flights with a Zero API fee, and it is now believed that Ryanair flights power over 50% of the holidays sold by Love.

This guaranteed seat access, combined with a large surplus of UK departing flight seats in Summer 2025, will have boosted turnover and profit substantially, and I expect record-breaking financial results for the year ended 2025.

But has Love reached the crest of their growth wave?

Investors closely analysing Love’s results will be worried by the 30% decline in the cost-efficiency of Google advertising, a key issue in most OTA board rooms. This decline is primarily attributed to the shift towards AI search engines, particularly Google’s introduction of Gemini AI answers at the top of search results.

Put simply, customers are finding their desired answers more quickly and with fewer clicks, significantly reducing the traffic available to OTAs, while the cost of these clicks has risen as OTAs compete for them.

Unlike On the Beach, Love has historically focused on driving traffic through Google or profit share deals with the social media giant “Travel Pirates,” rather than investing in above-the-line brand awareness campaigns.

Just as the advent of the internet destroyed the vertically integrated tour operators’ grip over high street distribution, the advent of AI Search could destroy Love’s stronghold over top “pay per click” (PPC) positions as the market evolves away from a PPC model, reducing its access to customers.

Many commentators argue that new AI agentic tools will enable DIY holidaymakers to bypass the OTA intermediaries and connect directly with asset owners, such as airline and hotel websites, to fulfil their holiday needs without the OTA markup, relying on credit card protection instead of ATOL cover in case anything goes wrong.

However, I believe Love could present a convincing counterargument that their “Caching” systems make them the ideal partners for AI Search engines seeking to help customers find the best prices for a holiday in Majorca, because they can offer their month view tools that show exactly this.

It is simply too early to predict exactly how AI search will affect Love and other UK OTAs, but I must admit that my doubts mean I will not be investing at a £1 billion valuation, as I believe Love may already have reached the peak of their valuation.

However, this is only my guess. What’s your view?

This week’s holiday on an 8-cabin Gullet in Turkey reminded me why small boat cruising is my favourite out of the various catamarans, river cruises, or large ocean cruising we have done as a family over the last 20 years.

Although not as sleek looking as the mega cabin cruises that surround us in the harbour, the Gullet offers faultless practicality with reasonably sized air-conditioned en-suite cabins, along with plenty of sunbathing space for the 13 holidaymakers on board.

I appreciate the plentiful outdoor space on the Gullet because it allows you to find a quiet spot to read or join other members of the two-family group for a few wines or beers as the sun sets and we enter port. This, combined with flexibility around departure and arrival times, as well as the option for full-scale changes to the pre-planned tour itinerary to provide more partying time for the youngsters in Fethiye, makes the product a winner for me.

However, it’s always worth remembering that 80% of the enjoyment of a holiday stems from the people you’re with and the friendliness of the staff hosting you. We could not have had a more welcoming or helpful crew, where nothing was too much trouble, than our Turkish crew this week on the S.Nur Taylan.

The crews of almost all the cruise ships I have travelled on have been excellent, but a 2:1 crew ratio on a small boat means you get to know everybody by name and much more closely.

I developed a love for the tranquillity of sailing boats over power boats many years ago. However, I still frustrate my sailing mates with my refusal to show any interest in sailing beyond being a “ballast weight” who reads his book as we sail along and has zero interest in gaining the navigational skills or sailing qualifications that would allow me to buy my own boat. Not that I ever would as why buy what you can rent? In my mind, holiday assets are just weights that stop you from travelling to many other destinations.

Although I enjoyed our trips on twin-hulled catamarans around Greece, Turkey, and Croatia, the space is much more confined, and with just one Captain as crew, you’re far more susceptible to a disaster. Ours occurred in Ibiza when Waska, the captain, was such a contentious character that we ended up leaving a day early because he had upset the kids so much that they no longer wanted to stay on board with him.

Getting my group of five kids aged 18 to 29 to go on holiday with me now requires inviting partners and an expensive trip they can’t afford themselves. Like most kids, they expect the bank of mum and dad to cover the entire cost throughout the holiday as compensation for their company, but to be fair, it’s worth every penny as quality time with your kids is hard to come by when three of them live 5 hours away.

The youngsters particularly enjoyed last year’s cruise from Rome around the Greek Islands on Royal Caribbean’s latest mega-ships, Odyssey of the Seas, which can hold 4,200 adults. Undeterred by the large crowds on board, the kids loved the wide range of food and entertainment available from evening theatre shows, gourmet restaurants, bars, and multiple visits to the casino and nightclubs.

I, however, struggled and felt more like a “battery-fed chicken”, squeezed onto a sun lounger next to strangers and forced to get up at 6 am to join a queue for disembarkation tickets to ensure you could visit some of the popular destinations requiring tendering. Although I understand the benefits of the Mega Cruise lines, I have not found one yet that suits me, and I prefer the more “Butlins” like Airtours Cruise ships of old, as they were small enough for me to cope with. And did I even mention that the Royal Caribbean WIFI “Pirate Robbery” at £890 for the combined families’ various laptops, iPads and phones? It’s amazing the grips that stick in your mind post what was a fabulous multi-generational holiday to be fair.

We have only ever experienced one River Cruise so far, even though TV adverts for Viking Cruises have constantly tempted me. This was secured through a bid from my lovely wife Ruth at last year’s ITT conference with the fabulous Arose River Cruising brand.

However, once again, we failed to think it through properly, and a winter river cruise is an entirely different beast from their summer counterparts, as the cold weather effectively traps you below decks in spaces designed for only half their winter capacity. Add to this the fact that we were the only native English speakers on board, and it’s not surprising that things did not quite meet my high expectations.

The experience has not put me off, however, as these multi-city floating “coach tours” offer the freedom to get off each day and enjoy breathtaking views as you cruise at a slow pace down Europe’s beautiful waterways.

But small boat cruising remains my favourite, and we have just booked our third Croatian Cruise next year with 34 other travel sector buddies who, like me, love this particular brand of Cruising.

Each Cruise version has its pros and cons, but they all have one thing in common. They are in a healthy and expanding sector of the UK Travel Industry. Viva le Cruise!