On the Beach Group (LSE:OTB) has increased its licensed passenger capacity by 7% for the coming year, signalling continued growth ahead of the peak summer season, according to Deutsche Bank.
The capacity update comes via the UK’s ATOL system, which sets the maximum number of package holiday customers a company can serve over a 12-month period. While it does not reflect precise booking numbers, it is widely used as an indicator of forward demand and business intent.
On the Beach lifted its ATOL allowance to 2.7 million passengers, up 7.3% year on year.
That compares with growth of around 3% across the wider market, Deutsche pointed out, meaning the group is expanding at more than twice the industry rate.
The company now accounts for around 8% of total ATOL capacity, while rival Love Holidays increased its allowance by 10.3% to 5.5 million passengers, equivalent to roughly 16% of the market. Reports earlier this year suggested Loveholidays had been aiming for a London IPO in March.
Noting that recent ATOL data shows larger operators continuing to gain share, while smaller competitors shrink, Deutsche Bank kept a 'buy' rating on On the Beach, with a price target of 345p compared to the last close at 173.4p.